Investment Water Speculation
Beginning January 1, 2023, the state engineer will be empowered to investigate allegations of investment water speculation. Should a complaint indicate that a purchaser holds a minimum percentage of shares in a mutual ditch company, there will be a rebuttable presumption that such speculation is occurring. In cases of violation, the state engineer can impose fines up to $10,000, significantly impacting how agricultural water rights are transacted and ensuring greater oversight of water usage.
Senate Bill 29, known as the Investment Water Speculation Act, seeks to regulate the buying and selling of agricultural water rights represented by shares in mutual ditch companies in Colorado. The bill specifically prohibits purchasers from engaging in what is termed 'investment water speculation,' defined as buying water rights with the intent to profit from a subsequent increase in value or through nonuse payments. This legislation aims to prevent the manipulation of agricultural water rights markets and ensure that water resources are utilized for beneficial purposes rather than speculative profits.
The bill has sparked discussions regarding its implications for local water management. Proponents argue that it protects water resources from speculative practices that could derail the accessibility and affordability of water for agricultural purposes. Conversely, opponents express concerns that the regulations might burden legitimate transactions and limit the rights of individuals and companies involved in the market, thereby potentially stifering agricultural business transactions. Overall, the bill represents a significant shift in how water rights are governed in Colorado, prioritizing conservation and responsible use over speculative investments.