AGO 85-14.

• Case Date: September 10, 1985
• Court: Colorado

Colorado Attorney General Opinions 1985. AGO 85-14. September 10, 1985Department of Law Attorney General Opinion FORMAL OPINION of DUANE WOODARD Attorney General Opinion No. 85-14 AG Alpha No. NR WE AGAON Jeris A. Danielson State Engineer Division of Water Resources 1313 Sherman Street, Rm. 818 Denver, CO 80203 RE: Application of House bill 1070, sec. 6 (May 23, 1985) (to be codified at section 37-81-104, C.R.S.)Dear Dr. Danielson: This opinion letter is in response to your letter of July 24, 1985, in which you inquired about the application of House bill 1070, section 6, which amends article 81 of title 37, Colorado Revised Statutes to add a new section 37-81-104 that authorizes a fee of $50 per acre-foot to be assessed and collected by the state engineer on water exported from Colorado. QUESTION PRESENTED AND CONCLUSION Your request for an attorney general's opinion presents the question: To what exports of water does the following statutory provision apply? To effectuate the purposes of this article, the general assembly hereby authorizes a fee of fifty dollars per acre-foot to be assessed and collected by the state engineer on water diverted, carried, stored, or transported in this state for beneficial use outside this state measured at the point of release from storage or at the point of diversion. House bill 1070, sec. 6 (May 23, 1985) (to be codified at section 37-81-104(1), C.R.S.) (hereinafter cited as section 37-81-104(1)). My conclusion is that the above fee cannot be assessed on any water exported from Colorado because: (1) Colorado is not entitled to impose a fee on any export that is authorized by an interstate compact or judicial decree or is credited as a delivery by Colorado to another state pursuant to a compact or decree; and (2) in any event, such an export fee violates the Commerce Clause, art. I, sec. 8, cl. 3 of the United States Constitution. ANALYSIS Can Colorado impose a fee on water exports that are authorized by an interstate compact or judicial decree or are credited as deliveries by Colorado to another state pursuant to a compact or decree? Colorado is bound by nine interstate compacts (fn1) and two United States Supreme Court decrees (fn2) that equitably apportion the waters of interstate streams. "Equitable apportionment is the doctrine of federal common law" developed by the United States Supreme Court in Kansas v. Colorado, 206 U.S. 46 (1907), and succeeding cases, "that governs disputes between States concerning their rights to use the water of an interstate stream." Colorado v. New Mexico, 459 U.S. 176, 183 (1982) (hereinafter cited as Colorado v. New Mexico I). The doctrine is based on equality of right among states. It does not require that the waters of an interstate stream be divided equally among the states through which it flows, but that the states be treated as equals, whose competing interests must be reconciled, taking into consideration the laws of the states and all other relevant facts. See, e.g., Connecticut v. Massachusetts, 282 U.S. 660, 670-671 (1931). The apportionment is truly equitable, based on an individualized weighing of the equities in the particular case. See, e.g., Colorado v. New Mexico I, 459 U.S. 176; Kansas v. Colorado, 206 U.S. 46. In Kansas v. Colorado, Colorado argued that, as the upper state, it was entitled to use all the waters of the Arkansas River flowing within its boundaries, regardless of injury to Kansas. The Supreme Court rejected that argument. Colorado made the same contention in Wyoming v. Colorado, 259 U.S. 419 (1922), and, again, the court rejected it, saying, "The river, throughout its course in both states, is but a single stream wherein each State has an interest which should be respected by the other." Id. at 466. More recently, in Colorado v. New Mexico I, 459 U.S. at 181 n. 8, and Colorado v. New Mexico, 104 S. Ct. 2433, 2442 (1984) (hereinafter cited as Colorado v. New Mexico II), the United States Supreme Court stated that the "mere fact" that a river originates in a state does not automatically entitle a state to a share of the water. In Colorado v. New Mexico II, in which the Court held that Colorado was not entitled to an equitable apportionment of the waters of the Vermejo River for its proposed future uses, the Court stated that "the equitable apportionment of appropriated rights should turn on the benefits, harms, and efficiencies of competing uses, and ... the source of the Vermejo River's waters should be essentially irrelevant to the adjudication of these sovereigns' competing claims." 104 S. Ct. at 2442. It is clear from the above cases that Colorado is not entitled to assert a superior claim to all the waters of an interstate stream that flow through the state simply because the waters originate in Colorado and Colorado can physically cut off the flow to downstream states. It follows from this that, under federal common law, Colorado has no right to charge another state, or its water users, a fee for the delivery of that state's equitable share of water. Therefore, no fee can be charged for any water delivered to another state pursuant to a court decree equitably apportioning the waters of an interstate stream. The same result obtains for water delivered to another state pursuant to an interstate compact. Interstate compacts are agreements between states, ratified by Congress, that allocate the waters of interstate streams. Such compacts are intended to make an equitable apportionment by consent, rather than litigation. See, e.g., the Colorado River Compact, section 37-61-101, art. I, C.R.S. (1973); the Arkansas River Compact, section 37-69-101, art. I, C.R.S. (1973). Since interstate compacts purport to equitably divide the waters of interstate streams, it would be inconsistent with the underlying common law doctrine, as well as a probable violation of the compact, for...