CO HB1038

Creates a "flex use" system allowing irrigation water right holders to apply water to any beneficial use without pre-designating the specific end use, provided they implement fallowing, regulated deficit irrigation, reduced consumptive use cropping, or other alternatives to permanent dry-up of irrigated lands.

Defines "flex consumptive use" as the fully consumptive portion of irrigation water rights quantified through water court change-in-use decrees or state engineer-approved substitute water supply plans entered or approved on or after June 1, 2015.

Limits flex use change-in-use decrees to a maximum of 10 per water division and requires that no more than 50% of flex consumptive use be delivered over any 10-year period for non-irrigation purposes, or the decree is automatically nullified.

Permits the State Engineer to approve up to 10 substitute water supply plans for flex use per water division annually, with similar restrictions on non-irrigation deliveries.

Requires the Colorado Division of Water Resources to review and report annually to the Water Resources Review Committee on flex use utilization through October 1, 2025, with all flex use provisions repealing on July 1, 2026.