House Bill 1041 (CRS § 24-65.1-101 et seq.), also known as the Areas and Activities of State Interest Act, was enacted in 1974 and allows counties and municipalities to regulate a wide variety of areas and development activities, including new or major extensions of water projects. The purpose of 1041 Regulations is to mitigate the environmental and socio economic impacts of a designated matter of state interest.

In accordance with statutory requirements, local governments adopt permit procedures and regulations which are tailored to protecting the resources and interests of their communities. Development may only proceed if in line with the 1041 regulations. After designating a matter of state interest in a public hearing, no development in a designated area, and no designated activity can proceed without a local government permit.

Typically, a 1041 permit application for a water project calls for adequate information to assess the impacts of and determine if the water project will satisfy the criteria in the regulations. The regulations address such concerns as impacts to wildlife, local government service delivery, land use, and the environment. However, 1041 does not give local governments the power to prohibit water projects. It simply allows local governments to require that a project complies with local regulations before construction is able to start. If an applicant fails to prove that the project satisfies the regulations, then the permit may be denied or conditioned. Only one permit for a water project has ever been denied by a local government. See QQ History page for more information on transmountain diversions and 1041 permitting (or describe in our work below).

QQ project, 2016: Local 1041 permit criteria and application, as compared to other federal and state permits and application materials.

In 2016, QQ developed a spreadsheet that compares federal and state permitting of water-related projects to example elements of 1041 permits. The document demonstrates that, while 1041 application materials generally do not require burdensome additional information from a permittee, a local government is able to examine additional information about the social, land use, and environmental impacts of a project in determining whether a project meets 1041 regulations.