On May 4, 2026, the Colorado Supreme Court held in Northern Integrated Supply Project Water Activity Enterprise v. VIMA Partners, LLC, 2026 CO 29, that a water activity enterprise—a special purpose business entity formed under sections 37-45.1-101 to -107, C.R.S. (2025) to carry out water projects—may condemn private property when exercising its parent water conservancy district’s legal authority in relation to “water activities,” which by statute includes infrastructure related to the distribution of wholesale or retail water.
Background
The case arose from the Northern Integrated Supply Project Water Activity Enterprise’s condemnation petition seeking permanent and temporary construction easements over land owned by VIMA Partners, LLC. NISP Enterprise stated that it needed the easements to survey, build, and maintain water delivery pipelines and related infrastructure for the Northern Integrated Supply Project, a regional water supply and distribution project intended to provide 40,000 acre-feet annually of new water supply to fifteen municipalities and water districts within Northern Water’s boundaries. VIMA moved for judgment on the pleadings, arguing that no statute cited by NISP Enterprise gave it the power of eminent domain. The district court denied that motion, and VIMA then sought relief under C.A.R. 21.
The Court’s Analysis
The Supreme Court began by acknowledging that eminent domain statutes are construed narrowly, ambiguities are resolved in favor of the landowner, and condemnation authority cannot be implied from doubtful or vague statutory language. But those principles did not help VIMA because the Court concluded that the governing statutes expressly supplied the necessary authority.
To reach this conclusion, the Court looked at the plain language of Colorado’s statutes to answer two questions: who is allowed to condemn property under section 37-45-118(1)(c), and what they are allowed to condemn property for.
The Court answered the first question by reading two statutes together. The first, section 37-45-118(1)(c), allows a “water conservancy district board” to take private property when needed to carry out its powers under the Water Conservancy Act. The second, section 37-45.1-103(4), provides that the governing body of a “water activity enterprise” “may exercise the district’s legal authority relating to water activities.” While not a “water conservancy district board,” the Court held that NISP Enterprise could nevertheless condemn property under section 37-45-118(1)(c) because it had the same legal authority to condemn as its parent district, Northern Water Conservancy District, as long as the condemnation is tied to “water activities.”
The Court answered the second question by looking at the plain and unambiguous language of section 37-45.1-102(3). That section 37-45.1-102(3) defines “water activity” to include “the diversion, storage, carriage, delivery, distribution, collection, treatment, use, reuse, augmentation, exchange, or discharge of water,” as well as wholesale or retail water, wastewater, or stormwater services and the acquisition of water or water rights. Because NISP Enterprise sought easements for pipelines and related infrastructure for a water delivery and distribution project, the Court concluded that the work was directly related to the acquisition, carriage, delivery, and distribution of water.
Finally, the Court also noted that section 38-1-202(1)(f)(XXX) separately identifies a water activity enterprise as an entity that may exercise the eminent domain authority of the district that owns it in relation to a water activity.
While the Court acknowledged VIMA’s emphasis on Colorado’s strict-construction canon: because eminent domain is disfavored, courts should not stretch statutory language to find condemnation power, the Court was ultimately unwilling to construe the statutes so strictly so as to ignore the plain language of Colorado’s Water Conservancy Act. It distinguished cases where parties tried to locate condemnation power in other vague or broad statutory language that never actually mentioned eminent domain or identified who could exercise it or for what purpose. Here, the Court held that the statutes clearly did both: section 37-45-118(1)(c) names eminent domain expressly, and section 37-45.1-103(4) authorizes water activity enterprises to exercise their parent district’s legal authority for water activities. Strict construction, the Court emphasized, does not permit courts to ignore what the legislature actually wrote.
Consistency with Prior Eminent Domian Caselaw
The decision fits squarely within a line of reasoning the Court established two decades ago in Department of Transportation v. Stapleton, 97 P.3d 938 (Colo. 2004), a case the Court expressly cited in rejecting VIMA’s narrow-construction argument. In Stapleton, a landowner argued that CDOT could not condemn her property near State Highway 82 for a parking and transit facility because that was not literally a “highway.” 97 P.3d at 941. The Court disagreed. It held that “state highway purposes” were broad enough to encompass a transit facility that was an integral component of a broader highway improvement project. Id. at 941, 945. The Court acknowledged the narrow-construction rule but applied what amounts to a common-sense test: read the grant of authority in light of the statutory scheme as a whole and ask whether the proposed taking has a functional relationship to the entity’s authorized public purpose. Id.
That same framework drove the result in NISP Enterprise. VIMA urged the Court to treat “water activities” as an exhaustive checklist and to exclude pipelines because the word “pipeline” appeared only in a separate statutory definition. The Court refused to read the statute that rigidly, holding instead that “relating to water activities” covers actions functionally connected with water delivery and distribution, which is exactly the purpose that NISP Enterprise’s proposed water delivery pipelines would serve.
The through-line from Stapleton to NISP Enterprise is clear: strict construction of eminent domain statutes is still required, but it does not defeat condemnation authority where the plain language of the statute identifies the power, identifies the entity or source of delegated authority, and the proposed taking bears a direct, practical relationship to the public function the legislature authorized.
Practical Implications
This decision matters beyond the parties involved. Water activity enterprises have become the vehicle for pursuing water projects across Colorado, largely because they allow districts to operate outside TABOR’s taxing, revenue, and spending limitations. The General Assembly created them for precisely that purpose: to let water conservancy districts, water conservation districts, and other governmental entities keep building water infrastructure without running afoul of TABOR’s fiscal constraints. Until now, there was no Colorado appellate authority squarely addressing whether those enterprises could exercise eminent domain. Now there is, and the answer is yes, provided the taking relates to water activities. For project sponsors, the takeaway is practical: tie every proposed taking to the condemning entity’s statutory powers, and document clearly how the property interest sought relates to the authorized public activity.