(1) Short title. The short title of this section is the "Colorado Water Rights Protection Act".

(2) Legislative declaration. (a) The general assembly recognizes that:

(I) Water rights appropriated under section 6 of article XVI of the Colorado constitution are usufructuary property rights to use water and are protected under amendment V of the United States constitution and section 15 of article II of the Colorado constitution;

(II) The primary economic value of a water right stems from its priority date and the amount of water that it allows the owner of the water right to divert and place to beneficial use within the priority system and in accordance with terms of the water right decree;

(III) The right to sell a water right is an essential element of the water right; and

(IV) A water right is a usufructuary property right that may exist separate and apart from any interest in land.

(b) The general assembly further recognizes that:

(I) The history between the federal government and the states in the reclamation of the arid lands of the western states is both long and involved. Throughout that history, congress has maintained a purposeful and continued deference to state water law.

(II) Pursuant to 43 U.S.C. sec. 666, commonly known as the "McCarran Amendment", congress waived the sovereign immunity of the United States for lawsuits in state courts regarding the adjudication or administration of water rights; and

(III) In Colorado, water rights are established by making an appropriation and are confirmed by state water courts.

(c) Therefore, pursuant to federal and Colorado law, the general assembly determines and declares that:

(I) The United States forest service and the bureau of land management are subject to the jurisdiction of Colorado water courts for their water right claims in Colorado; and

(II) Nothing in this subsection (2) prevents the federal government from:

(A) Participating in water court proceedings in Colorado; or

(B) Seeking terms and conditions in water court to protect its water rights.

(3) Limitation on actions. (a) The state engineer and the division engineers shall not enforce or administer efforts by the United States forest service or bureau of land management that:

(I) Require full or partial transfer of title to water rights to the United States forest service or bureau of land management;

(II) Restrict the use or alienability of the water right as a condition to a right-of-way, special use permit, or other authorization by the United States forest service or bureau of land management to use federally owned lands; or

(III) Require a third party supplying water to a United States forest service or bureau of land management special use permittee to supply the water for a set period of time or in a set amount.

(b) Nothing in this subsection (3) impacts the state engineer's or a division engineer's authority to enforce and administer the terms and conditions of a water court decree or other judicial decree.

(4) This section does not grant, confirm, deny, or impact any legal authority of the federal government to impose bypass flow requirements in connection with a special use permit or other authorization.

(5) This section does not grant, expand, contract, or limit the legal authority of any state or local government related to permitting or regulatory actions in connection with land use or other permitting approvals or authorizations.