Sunday, July 19, 2020

Rocky Ford Irr. Co. v Kents Lake Reservoir Co. (amended)

In July 2019, the Utah Supreme Court issued a decision in the case of Rocky Ford Irrigation Company v. Kents Lake Reservoir Company. Following that decision, both parties filed Petitions for Rehearing, which the Court granted. After additional briefing from the parties (and the Utah State Engineer) and additional oral arguments, the Court withdrew its prior decision and issued a new decision. This case focuses on the issues of water efficiency savings, impairment of others' water rights, and obligations to measure water diversions.

Rocky Ford and Kents Lake are two irrigation companies on the Beaver River system. Both irrigation companies have various direct flow water rights and storage water rights with varying priority dates. In 1931, the Fifth District Court issued the Beaver River Decree, which divided the Beaver River system into an upper portion and a lower portion. Upper water users were allowed to divert water prior to lower water users, despite later priority dates, in part because the lower water users benefitted from return flows from the upper water users' flood irrigation. The Decree also required that all points of diversion be equipped with measuring devices.

In the 1930s and 1940s, Kents Lake filed two applications (a change application and an application to appropriate) with the State Engineer to construct Three Miles Reservoir in the upper portion of the Beaver River system. Rocky Ford protested the applications, but the State Engineer ultimately approved the applications. In 1953, Rocky Ford and Kents Lake entered into an agreement in which Rocky Ford agreed not to protest future change applications associated with Three Mile Reservoir, and Kents Lake agreed not to oppose Rocky Ford's expansion of its reservoir located in the lower portion of the Beaver River system. Kents Lake later filed a change application, and Rocky Ford did not protest it. Kents Lake later certificated this change application with the State Engineer.

Beginning in the 1970s, Beaver River water users began converting from flood irrigation to sprinkler irrigation. Rocky Ford alleged that it was being harmed due to the reduced return flows from upper water users and due to Kents Lake storing the "saved" water from the efficiency gains in its reservoir. In 2010, Rocky Ford filed a lawsuit against Kents Lake seeking damages, declaratory relief, injunctive relief, and rescission of the 1953 Agreement, based on allegations of water right interference, conversion of water rights, and negligence. Rocky Ford asserted that its water rights had been injured by the actions of Kents Lake, including the storage change application and the failure to measure water diversions. In one decision, the district court concluded that Rocky Ford had effectively waived some of its claims based on prior rights due to the 1953 Agreement. Following this decision, Rocky Ford stipulated to dismiss its damage claims. The remaining claims went forward to trial, and the district court ruled in favor of Kents Lake. The district court also awarded attorney fees to Kents Lake. Rocky Ford then appealed the case to the Utah Supreme Court. The Utah Supreme Court focused its decision on answering five questions, which are discussed below.

1. Did the district court err in denying Rocky Ford's motion for summary judgment?

The Court determined that there was a legitimate dispute about which of Rocky Ford's water rights were subject to the 1953 Agreement, and that the district court therefore erred in granting summary judgment on its interpretation of the 1953 Agreement.

The Court confirmed the principle that a "change maintains its original priority only so long as it does not harm preexisting rights." Thus, the Court determined that Kents Lake's changed storage rights maintained their original priority date of 1890 only if Kents Lake's changed water storage did not injure Rocky Ford's preexisting water rights.

The Court then explored the issue of impairment vs. interference. This was a central issue of dispute in the case. Rocky Ford asserted that impairment and interference meant the same thing, whereas Kents Lake asserted that the two terms have different meanings and contexts. The Court agreed with Kents Lake, and clarified the distinction between the two terms (while also noting that some of the Court's prior decisions were causes for the confusion due to the Court using the two terms interchangeably). The Court clarified that impairment claims are statutory claims made with the State Engineer during the application approval process. If a water user thinks their prior rights will be injured by a new application, the water user asserts impairment by filing a protest in the application proceedings (and, if necessary, by seeking judicial review of the State Engineer's decision). The standard of review is that the State Engineer should approve the application if there is "reason to believe" that the application will not impair existing water rights. Interference claims, on the other hand, are common law claims that are brought after an application has been approved and actual injury has been inflicted on prior rights. When interference claims are brought to a court, the opponent of the change must show, by a preponderance of the evidence, that the change has interfered with its water rights. The Court also clarified that a water user may bring an interference claim even if they did not file a protest and assert impairment during the application process. The Court concluded that Rocky Ford had waived its impairment claim when it failed to protest Kents Lake's change application, and that Rocky Ford had waived its interference claim when it dismissed its damage claim prior to trial.

2. Did the district court err in refusing to declare that Kents Lake could not store its efficiency gains?

The district court had concluded that Rocky Ford had failed to establish that any injury to its water rights was caused by Kents Lake's storage changes, rather than by intervening causes -- such as the impact of groundwater pumping or the conversion to sprinkler irrigation by water users other than Kents Lake. Based on the record of the district court, the Court affirmed the district court's decision.

3. Did the district court err in refusing to declare that Kents Lake must measure its water usage?

The Court next examined Kents Lake's obligations to measure its water diversions. Kents Lake asserted--and the district court had agreed--that even though Kents Lake did not measure all of its diversions, it was compliant because it did all measuring required by the State Engineer. But the Court noted that both Utah law (Utah Code section 73-5-4) and the Beaver River Decree require Kents Lake to measure all of its diversions. Thus, the Court reversed the district court on this point.

4. Did the district court err in refusing to rescind the 1953 Agreement?

Rocky Ford had asserted that the 1953 Agreement should be rescinded because Kents Lake had breached material provisions of the agreement. The Court determined that the alleged breaches were not material terms to the agreement, and therefore concluded that the district court had correctly refused to rescind the 1953 Agreement.

5. Did the district court err in awarding attorney fees to Kents Lake?

The Court finished its opinion by determining that the district court had not provided sufficient detail to support its conclusion to award attorney fees against Rocky Ford based on bad faith. Accordingly, the Court reversed this determination.


To read the full opinion, click here.

Sunday, July 12, 2020

Black Diamond Financial LLC v. Big Cottonwood Pine Tree Water Co.

The Utah Court of Appeals recently issued its decision in the case of Black Diamond Financial LLC v. Big Cottonwood Pine Tree Water Company. The case focused on a water company's liability for a share transfer that was in violation of its Bylaws.

Big Cottonwood Pine Tree Water Company serves water to a cabin subdivision in Big Cottonwood Canyon in Salt Lake County. The Company's Bylaws provide that each lot owner was a member of the Company and was entitled to one Company water share that was only transferable with the lot. The Bylaws provided that the shares could not be transferred to other lots and could not be transferred separate from the lot. But as a matter of practice, the Company did not ensure that share transfers were performed according to these Bylaws.

Steven Rollins owned Lot 25 in the subdivision and owned one share that was associated with his lot. He was in a relationship with Vicki Kincaid, who loaned him money to remodel the property. When Rollins was unable to repay Kincaid, he agreed to transfer his water share to Kincaid as repayment. Both parties were unaware that the Bylaws prohibited the share transfer separate from the lot. Kincaid took the endorsed share to the Company, who issued a new share certificate to Kincaid. Later, Rollins' lender foreclosed on the lot. The lender found out that the lot had no water service because Kincaid owned the water share. Black Diamond Financial LLC purchased the lot from the lender at a discounted price due to the lack of water service. Black Diamond thought it would be able to resolve the water service issue, but was unable to reach an agreeable price to purchase the share from Kincaid or find water service in some other way. Black Diamond then filed suit against Kincaid and the Company.

Kincaid moved for summary judgment and asserted that she was a protected purchaser of the share under the Utah Uniform Commercial Code. Black Diamond and the Company also filed motions for summary judgment on breach of contract issues. The district court concluded that Kincaid was a protected purchaser, and was therefore entitled to retain the share. The district court also concluded that the Company was in breach due to its failure to follow the share transfer provision in its Bylaws. (Utah courts have long held that the Articles and Bylaws of a water company form a contract or agreement between the company and its shareholders.) But the district court determined that Black Diamond was not damaged by the breach because Black Diamond purchased the lot at a discounted price because of the water share issue. The district court required the Company to pay $1.00 in nominal damages to Black Diamond. Black Diamond then appealed to the Utah Court of Appeals.

The Court of Appeals first analyzed if Kincaid was a protected purchaser of the water share under the UCC. The Court reviewed the elements of a protected purchaser in Utah Code section 70A-8-3, and concluded that Kincaid met all of these elements. The Court therefore upheld the determination that Kincaid was entitled to retain ownership of the share.

The Court next examined Black Diamond's assertion that it was entitled to more than just nominal damages. The Court determined that even though the Company had breached its obligations under the Bylaws, Black Diamond was not injured by the breach because Black Diamond had purchased the lot at a discounted price due to the fact (and with full knowledge) that the lot lacked water service due to Kincaid's ownership of the water share. The Court noted that Black Diamond would receive a windfall if it was able to purchase the property at a discount and get damages based on property devaluation due to the lack of a water share. Based on these determinations, the Court of Appeals upheld the district court's decision.

It is important to note that the Court clarified that the result could have been very different if Black Diamond had acquired the lot without knowledge of the share issue. In such a circumstance, the Company would have been required to pay damages to Black Diamond due to the Company's failure to follow the share transfer provisions contained in its Bylaws. Water companies should, therefore, take heed to follow the share transfer provisions in its Articles and Bylaws (or, alternatively, amend its Articles and Bylaws to conform the share transfer provisions to match the Company's actual share transfer practices). Failure to do so could result in significant liability and monetary damage claims for the Company.

To read the full text of the opinion, click here.

Tuesday, June 23, 2020

Change Application Tracker

Each year, hundreds of change applications are filed with the Utah Division of Water Rights. It generally takes a couple of months for a change application to go through the approval process -- and it can take even longer if protests are filed or if the Division elects to hold a hearing on the change application. Previously, the Division gave very little information about where a change application was at in the approval process. An applicant didn't know if their change application was in the final stages of review and only a few days away from a decision being issued, or if the Division was holding the change application due to some issue discovered during the review process.

Yesterday, the Division unveiled its new Change Application Tracker Tool, which provides a complete list of all unapproved change applications and includes information about where each change application is at in the approval process. The tool also provides information about whether a hearing has been requested or held; a "percent complete" column to give an indication of how far along in the process the change application is; and a comments section regarding issues that the Division has identified, additional information that the Division has requested from the applicant, and other notes about the change application.

This tool provides greater transparency in the process and will be a huge benefit to all water right owners that have pending change applications.

To access the Change Application Tracker Tool, click here.

Wednesday, June 3, 2020

Salt Lake City v. Haik

The Utah Supreme Court recently issued its decision in the case of Salt Lake City v. Haik. This case is another chapter in a long-running dispute regarding access to water service in Albion Basin in Little Cottonwood Canyon.

For years, Mark Haik and the Pearl Raty Trust, and others have sought to get water service from Salt Lake City so they can develop their lots in the Albion Basin. In 2014, Salt Lake City brought a water right quiet title action against Mr. Haik, the Raty Trust, who responded with various counterclaims. One counterclaim asserted that Salt Lake City was required to provide water service to the lots under Article XI, Section 6 of the Utah Constitution. Mr. Haik's counterclaim was dismissed based on res judicata because he had already litigated (and lost) the same claim in federal court, but the Raty Trust was allowed to pursue her counterclaim. The Raty Trust asserted that although the Albion Basin is not within Salt Lake City's municipal boundaries, it is within the City's approved water service area, and that the City was, therefore, obligated to serve water to the Trust's lot. The district court disagreed and dismissed the counterclaim. The case was appealed to the Utah Court of Appeals, who affirmed the district court. The Trust then appealed to the Utah Supreme Court.

The Utah Supreme Court began its analysis by reviewing the language of Article XI, Section 6, which provides that all of the "waterworks, water rights and sources of water supply now owned or hereafter to be acquired by any municipal corporation, shall be preserved, maintained and operated by it for supplying its inhabitants with water at reasonable charges." The Trust asserted that because its property was within the City's water service area, the Trust was an "inhabitant" of the City and that the City was, therefore, constitutionally required to provide water service to the Trust's property. The Court disagreed, and determined that the Trust did not meet the plain-language definition of an "inhabitant" of Salt Lake City. Further, the Court held that it was not persuaded that those who ratified the Utah Constitution understood the word "inhabitant" to encompass any person who owned property within a city's approved water service area. The Court therefore affirmed the dismissal of the Trust's counterclaim.

To read the full opinion, click here.

Monday, May 18, 2020

Personnel Changes at Utah Division of Water Rights

In November 2019, Kent Jones retired as the State Engineer. Teresa Wilhelmsen, who was previously serving as Assistant State Engineer for Applications and Records, was appointed the new State Engineer in March 2020. Boyd Clayton, who has served as Deputy State Engineer, is retiring in a few weeks. These changes have necessitated several more personnel changes within the Division of Water Rights.
  • James Greer, who previously served as the Assistant State Engineer for Technical Services, has been appointed as the Deputy State Engineer.
  • Blake Bingham, who previously served as the Assistant State Engineer for Adjudication, has been appointed as the Assistant State Engineer for Applications and Records.
  • Michael Drake, who previously served as the Regional Engineer for the Weber River/Western Region, has been appointed as the Assistant State Engineer for Adjudication.
  • Jim Reese, who previously worked in Technical Services, has been appointed as the Assistant State Engineer for Technical Services.
The Division has not yet selected a new Regional Engineer for the Weber River/Wester Region.

Saturday, March 7, 2020

New State Engineer

On March 2, 2020, Teresa Wilhelmsen was sworn in as the State Engineer for the State of Utah. Teresa has worked for the Division of Water Rights for the past 23 years, and previously served as the Assistant State Engineer for Applications and Records. Teresa replaces Kent Jones, who retired as State Engineer in November 2019.

To view the video of the swearing in ceremony, click here.

Wednesday, March 4, 2020

2020 Legislature: Additional Water Bills

Since the beginning of the 2020 legislative session, there have been several more water-related bills that have been proposed. These bills are summarized below.

HB 245  – Dogs in Watershed Areas
Rep. Cheryl K. Acton
House Bill 245 provides that counties, cities, districts, and State agencies cannot prohibit individuals from transporting dogs in watershed areas if the dog remains at all times in the passenger compartment of the vehicle. The bill also exempts service dogs, search and rescue dogs, and law enforcement dogs.

HB 278 (1st Substitute) – Jordan River Amendments
Rep. Cheryl K. Acton
House Bill 278 amends the statute regarding Jordan River improvement projects to allow the Division of Forestry, Fire, and State Lands to work in conjunction with the Utah Department of Transportation to (1) provide access from highways to trails along the Jordan River, and (2) install signs, barriers, and fences where a highway crosses the Jordan River.

 HB 328 (1st Substitute) – Division of Water Resources Study Update
Rep. Joel Ferry
House Bill 328 requires the Division of Water Resources to (1) update a 2002 study to explore the feasibility of diverting Green River water into the Wasatch Front through the Bear River or the Weber River, and (2) study reasonable alternative methods to divert Green River water into the Wasatch Front. The Division must present the update to the Natural Resources, Agriculture, and Environment Interim Committee by November 2020 and present the second study by November 2021 to the Committee.

HB 331 – Water Infrastructure Safety and Maintenance
Rep. Kim F. Coleman
House Bill 331 requires large water providers to report information about their water infrastructure to the Division of Water Resources and the Natural Resources, Agriculture, and Environment Interim Committee every five years beginning in 2022. Large water providers include cities of the first and second class, as well as water conservancy districts that serve more than 100,000 individuals. The report must include information about the age of water infrastructure, an ongoing repair and replacement plan, and underground water infrastructure that is older than its recommended age.

HCR 22 – Protection, Development, and Beneficial Use of Colorado River Water
Rep. Bradley G. Last
House Concurrent Resolution 22 encourages the State of Utah to expeditiously develop Utah’s portion of the Colorado River Compact. The Resolution also encourages the State to coordinate with the federal government and the other Colorado River basin states to timely implement of the Drought Control Plans and complete the re-consultation on the Colorado River Interim Guidelines.

HCR 23 – Balanced Approach to the Release of Water from Flaming Gorge
Rep. Scott H. Chew
House Concurrent Resolution 23 supports the creation of a new management plan, with input from Green River stakeholders, regarding releases of water from Flaming Gorge Dam that is in the best interest of the stakeholders and endangered fish.

HCR 24 – Quagga Mussels
Rep. Logan Wilde
House Concurrent Resolution 24 urges the continued cooperation by the federal government (particularly the National Park Service) to prevent the spread of the invasive quagga mussels, including allocation of additional funds and staff time to improve the inspection and decontamination processes for all watercraft leaving Lake Powell.

SB 84 – Public Entity Water Users Amendments
Sen. Jacob L. Anderegg
Senate Bill 84 requires each public entity (counties, cities, towns, and metro townships) to develop a plan to meter all water used for buildings, structures, and land owned by the public entity. The bill also requires each public entity to adopt a conservation plan, and to submit the plans to the Division of Water Resources by November 2020. A public entity cannot receive State money for water development if the public entity fails to comply with these requirements.

SB 144 – Water Related Process Amendments
Sen. Ralph Okerlund
Senate Bill 144 modifies several Utah water statutes in light of the recent Utah Supreme Court decision in Rocky Ford Irr. Co. v. Kents Lake Reservoir Co. First, the bill clarifies that judicial review of a State Engineer decision on an application can only be obtained by the applicant or someone who filed a timely protest on the application. Second, the bill clarifies that the filing of a Proof is a request for agency action (as defined in the Utah Administrative Procedures Act) only between the applicant and the State Engineer. Third, the bill clarifies that the State Engineer’s issuance of a Certificate does not constitute a determination by the State Engineer as to whether the appropriation or change has or may impact another water right, and that the State Engineer is not required to deliver a copy of the Certificate to any person other than the water right owner. Finally, the bill clarifies that a person is not required to file a protest or participate in a judicial review of a State Engineer decision as a prerequisite to filing a judicial action for relief based on interference with a water right.

Monday, January 27, 2020

2020 Legislative Preview

The 2020 Session of the Utah Legislature looks to be a very busy session for the water community. There are a lot of water bills that are being proposed, which are summarized below.

HB 28 - Legislative Water Development Commission Sunset Amendments
(Rep. Keven J. Stratton)
When the Utah Legislature originally created the State Water Development Commission, it provided a sunset date of January 1, 2021 at which point the State Water Development Commission would expire. House Bill 28 extends the sunset date until January 1, 2031. Additionally, HB 28 changes the name of the State Water Development Commission to the Legislative Water Development Commission. It also requires that the Legislative Management Commission may only appoint nonvoting members appointed to the Legislative Water Development Commission who are first recommended by the co-chairs of the Commission.

HB 39 - Agricultural Water Optimization Task Force Amendments
(Rep. Casey Snider)
House Bill 39 modifies the voting membership of the Agricultural Water Optimization Task Force by adding three individuals whose primary source of income derives from the production of agricultural commodities. The bill also provides that the Task Force should recommend legislation regarding the issues within the Task Force's responsibility, and makes minor changes to language about task force members receiving per diem and travel expenses in accordance with current statutes and rules.

HB 40 - Water Loss Accounting Act
(Rep. Melissa G. Ballard)
House Bill 40 would enact the Water Loss Accounting Act that creates a technical advisory committee which provides technical assistance to certain water systems that are required to prepare and submit annual water loss accounting reports. The water systems that would be subject to this Act are "public water systems that serve a population of more than 3,300 individuals." The water losses that are to be accounted for and reported annually include: water lost through leaks, breaks, overflows, etc.; water lost through the unauthorized use of water; and water lost through metering inaccuracies and data handling errors. The first annual reports would be in 2022. The bill proposes a one-time appropriation of $900,000 for technical assistance and to train the covered water systems and $450,000 to develop a validation program for the water loss audits. It also proposes one-time appropriations for data integration ($150,000) and ongoing expenses of the Division of Water Resources to administer this program ($300,000).

HB 41 - State Water Policy Amendments
(Rep. Kevin Stratton)
House Bill 41 outlines water polices for Utah. The bill includes three overarching polices. The first states that Utah will pursue "adequate, reliable, affordable, sustainable, and clean water resources, recognizing that Utah is the second most arid state in the nation and as such, there is, and will continue to be, a need to ensure Utah's finite water resources are used beneficially."
The second policy states that Utah will promote 23 goals, including among others: (1) water conservation, efficiency, and the optimal use of water resources; (2) water resource development and the creation of water infrastructure to meet demands and promote economic development; (3) compliance with state statutes regarding the Lake Powell Pipeline and Bear River development; (4) timely replacement of aging and inefficient infrastructure; (5) optimal use of agriculture water; (6) water quality in rivers and lakes; (7) water pricing and funding mechanisms; (8) respect for water rights; (9) standards for accurate water use measurement, tracking, enforcement and reporting; (10) water education efforts; (11) the study and implementation of mechanisms to increase water use flexibility, including water banking and split-season uses; (12) science-based evaluation of watersheds, increased reservoir capacity, and aquifer storage and recovery; (13) the study and development of strategies to address declining water levels and ways to protect water quality and quantity at the Great Salt Lake; (14) regulations and practices to maintain sufficient stream flows and lake levels; (15) equitable access to safe, affordable, and reliable drinking water; and (16) regulations and practices to encourage the effective treatment and use of wastewater; and (17) control of invasive species that threaten or degrade water resources.
The third policy states that Utah supports the "timely and appropriate" negotiated settlement of federally reserved water rights claims for Native American trust lands and other federal reservations, but opposes future federal reservations that result in unquantified federal reservations of water.
Under the bill, State agencies would be "encouraged" to conduct activities consistent with the above policies and other policies that the Legislature may establish. The Natural Resources, Agriculture, and Environmental Interim Committee would also review the state policy each year to recommend priority balancing and other changes to the Legislature.

HB 88 - School and Child Care Center Water Testing
(Rep. Stephen G. Handy)
House Bill 88 provides water quality testing of all water taps at schools and childcare centers by 2022. The testing is targeted at understanding and reducing lead levels in water consumed by children. All taps must be tested by June 1, 2022, and at least once every five years thereafter. If a test result reveals lead levels above 10 parts per billion, the school or childcare center must take steps to either stop using the tap or reduce the lead levels below 10 parts per billion. The records related to the tests and the remediation steps must be kept for five years and must be made available to the public at no charge.

HB 94 - Water Applications Amendments
(Rep. Timothy D. Hawkes)
House Bill 94 makes one addition to Utah Code section 73-3-5.6 regarding applications for a small amount of water. This statute was amended last year under HB 355 to provide that in areas with ongoing general adjudications, reinstatements of small applications that had lapsed were to be evaluated as part of the adjudication process. HB 94 provides the State Engineer with the discretion to issue a certificate before evaluating the claim as part of the general adjudication.

HB 95 - General Adjudication Water Amendments
(Rep. Timothy D. Hawkes)
House Bill 95 is a "clean up" bill proposed by the state engineer that would amend the General Adjudication statutes to: (1) better define what is required in a written objection to a proposed determination or an addendum thereto; (2) prohibit the filing of water user claims after the final summons stage of the General Adjudication is completed; and (3) make several minor technical corrections to the language in the existing statutes.

HB 96 - Water Forfeiture Amendments
(Rep. Timothy D. Hawkes)
House Bill 96 is another "clean up" bill proposed by the state engineer that would amend the water forfeiture statute, Utah Code section 73-1-4, to: (1) require that a lease be in writing and have an specific termination date before it qualifies as an exception to the forfeiture provisions; (2) limit the time to seven years that an exception to the forfeiture provisions apply where use of a reservoir is limited due to safety, regulatory, or engineering restrictions; (3) allow the state engineer to establish rules regarding the evidence that is to be submitted by a public water supplier in order to qualify for an exemption to the forfeiture provisions when holding water for the reasonable future water needs of the public; and (4) make several minor technical corrections to the language in the existing forfeiture statute.

HB 105 - Water Facilities Amendments
(Rep. Logan Wilde)
House Bill 105 would expand the existing protections provided to owners and operators of water facilities and to water apportionment officials. These protections are proposed to be separated into three separate scenarios, including where a person: (1) maliciously interferes with, damages, destroys, or removes a water facility; (2) intentionally or knowingly makes an unauthorized connection to water facility; and (3) unlawfully interferes with a water apportionment official in his or her authorized duties. There is a different standard of conduct required for each of these three scenarios. Presently, the "unlawfully interferes" standard applies to both the first and third scenario and the code does not address the second scenario. The definition of water facility is expanded to include all water facilities "used for the diversion, transportation, distribution, measurement, collection, or storage of water, stormwater, wastewater, or sewage." The bill would apply this same expanded definition to the statute governing obstructing or changing water facilities, whereas the law currently applies only to obstructing or changing water canals and/or water courses.

HB 130 - Water Use Amendments
(Rep. Timothy D. Hawkes)
House Bill 130 would modify Section 73-3-3 of the Utah Code to expressly authorize split-season and fixed-time change applications. In particular, the bill would allow holders of a perfected water right to "split" their right by allowing others to use or lease their rights for a portion of the applicable periods of use. These split-season change applications could be approved for a period of up to ten years. Similarly, for fixed time change applications, water right holders could request a change in how, where, and when they use their water right for a period of up to ten years. With a few limited exceptions, Utah law currently requires most change applications be temporary changes that cannot exceed one year or permanent changes. The bill is intended to provide greater flexibility on how water rights are used to encourage water sharing among multiple uses to help address growing water demands. Notably, the Governor's 2017 Water Strategy also identifies split season leases as a possible tool for addressing competing water demands.

HB 156 - Water Amendments and Education Entities
(Rep. Stephen G. Handy)
House Bill 156 modifies the list of public entities for purposes of categorizing public water suppliers under Utah's water nonuse statute, Utah Code section 73-1-4. Institutions of higher education that are part of the state system of higher education are added to the list of public entities. The purpose of the bill is therefore to allow the University of Utah, Utah State University, and other state institutions of higher education to qualify as public water suppliers. The bill also makes other minor wording edits to the nonuse statute.

HB 166 - Watershed Councils
(Rep. Timothy D. Hawkes)
House Bill 166 would enact the Watershed Councils Act in response to  a recommendation in Section 9.9 of the 2017 Recommended State Water Strategy report generated by the Governor's Water Strategy Advisory Team.  The new Act would divide the state into 12 different watersheds or drainage basins and would create a state watersheds council with defined membership.  The Act would also allow creation of local watershed council on a voluntary basis.  The primary purpose of these councils is to provide a forum for discussions on water policy and water resource issues.  These councils would be open to the public and would be subject to the Open and Public Meetings Act as well as the Government Records Access and Management Act.

HB 168 - Public Water Supplier Relocation Amendments
(Rep. Timothy D. Hawkes)
House Bill 168 amends provisions related to reimbursement of costs by UDOT for relocation of water facilities. Currently, UDOT is required to pay 100% of relocation costs for utilities owned by political subdivisions of the state, including cities, towns, and districts. Otherwise, UDOT is only required to pay 50% of the relocation costs. This bill would add public water suppliers to the list of entities that receive 100% relocation costs from UDOT.

HJR 3 - Proposal to Amend the Utah Constitution - Water Resources of Municipalities
(Rep. Keven J. Stratton)
House Joint Resolution 3 furthers the effort began last session to amend Utah's constitutional prohibition of alienating water rights and waterworks by Utah municipalities. Article XI, Section 6 forbids Utah's cities and towns to "directly or indirectly, lease, sell, alien, or dispose of any waterworks, water rights, or sources of supply." This provision has often been considered an anachronism from long ago. It also required municipalities to be creative, only selling "surplus" water and exchange rather than sell water rights or water shares, or form a district, not subject to this prohibition, to hold water rights. A likely unintended consequence of this ban is that the Town of Alta, that receives all drinking water under a contract with Salt Lake City, only has surplus water that could be cut off, with thirty days' notice, if no longer surplus to Salt Lake City.
In place of the absolute prohibition, new language will continue to ban the outright sale, lease, or alienation, but will allow water right exchanges and the designation of service areas outside of the municipal limits and preserve and maintain those water rights and sources of supply to serve those within the entire service area. It will also recognize the long-utilized practice of exchanging water rights and sources by municipalities. In other words, not much will change.
If passed, this proposed constitutional amendment will next be submitted to the voters of Utah.

SB 26 - Water Banking Amendments
(Sen. Jani Iwamoto)
Senate Bill 26 creates a water banking program in Utah. A water bank is a market tool that facilitates the voluntary, temporary transfer of water rights from one use to another. Most other western states have some form of banking, and the bill would further a number of recommendations in the Governor's 2017 Recommended Strategy, which identified water banking as a possible tool to support agriculture while also providing water for urban and environmental needs in the face of Utah's growing population. The bill also responds to S.J.R. 1, which the Legislature passed during the 2019 General Session to request water banking legislation to consider during the 2020 session.
Working since 2017, a diverse group of over 70 stakeholders representing agriculture, public water suppliers, conservation groups, and other interests developed the legislation by meeting with stakeholders across Utah and reviewing water banking programs in other western states. Based on its outreach efforts, the group determined that in order to be successful in Utah, water banks must be voluntary, temporary, and local. To support these goals, the bill would create the framework for a 10-year pilot program that would authorize water right holders to create and manage water banks for their local areas. Ideally, this would allow water banks to be specifically tailored to their regions' unique conditions and needs. During the pilot period the banking program would be monitored, evaluated, and modified as needed. The Board of Water Resources would oversee the creation and operation of water banks while the State Engineer would regulate water rights deposited in a bank.
The banking program is intended to build upon and utilize existing Utah law as much as possible. For instance, to deposit a water right into a bank, a right holder would file a change application pursuant to the current process. Similarly, Section 73-3-3.5 of the Utah Code would require shareholders seeking to deposit a water right into a bank to first obtain approval from their water company. The State Engineer's Office has also indicated that it would only approve the consumptive portion of a water right for use within a water bank and that it would impose conditions where necessary to govern the right's use within a bank to avoid impacts to other users. Once the State Engineer approves a water right for use within a bank, the right would be available for others to use for a variety of uses, including water quality and environmental purposes.

SB 51 - Secondary Water Requirements
(Sen. Jacob L. Anderegg)
Senate Bill 51 is a continuation from the 2019 legislative session regarding secondary water metering. The bill requires all water suppliers that provide pressurized secondary water in first and second class counties to meter water use by December 31, 2040. Each water supplier must develop and submit a strategy to comply with the metering requirement by March 31, 2021. If the meters provide real-time data, the water supplier must make the data available to the users in an open-source format upon request. Water suppliers must also provide monthly information to each user, including the user's secondary water use in relation to other users in the area and suggestions for conserving water. With respect to funding, the bill establishes the Secondary Water Metering Restricted Account, which will be funded through legislative appropriations and will be used by the Division of Water Resources to give up to $10 million per year in grants to water suppliers to install the meters. The bill provides that no more than 25% of the funding can come from a loan from the Division of Water Resources, that no more than 50% of the funding can come from a grant through the Secondary Water Metering Restricted Account, and that at least 25% must come from the water supplier through some other funding mechanism.

SB 52 - Agricultural Water Use Amendments
(Sen. Jacob L. Anderegg)
Senate Bill 52 would require the Utah Division of Water Rights to compile and provide a report about agricultural use of water to the Natural Resources, Agriculture, and Environmental Interim Committee and the Economic Development Workforce Services Interim Committee by November 1, 2020. The report must include the following:
  • the total amount of water used for agricultural use in the State of Utah;
  • how the water used for agricultural use is distributed, including how much water is used by flood irrigation, drip irrigation, through pressurized systems, or any other irrigation method;
  • the amount of water used for agricultural use that is metered;
  • the amount of water used for agricultural use that is owned by different ownership types, including special service districts, municipalities, or private entities;
  • explanations of regional issues that impact metering of agricultural use of water; and
  • any other relevant information about metering agricultural use of water.

SB 63 - Recreational Activities Related to Public Waters
(Sen. Scott D. Sandall)
In 2010, the Utah Legislature passed HB141, which is now referred to as the Public Waters Access Act. The Public Waters Access Act provides, among other things, how recreationists may access and use the public waters in the State of Utah. SB63 seeks to amend the Public Waters Access Act to provide greater protections for private property owners along a 40 mile section of the Weber River between Holiday Park and Echo Reservoir that is considered navigable waters.
Regarding the described 40 mile section of the Weber River navigable waters, SB63 would prohibit a person who does not own the adjacent property from the following:
  • Destroying, materially damaging, removing, or altering real or personal property;
  • Altering or obstructing water flows;
  • Constructing or maintaining a structure on the bed of the river;
  • Traveling on the water by horseback, motor vehicle, off-highway vehicle, or non-motorized vehicle; and
  • Hunting
SB63 would also prohibit an individual recreating on the Weber River navigable waters from littering, destroying, or defacing public or private property, and harassing livestock or property owners. SB63 would further allow a private property owner to place a fence or other obstruction across a Weber River navigable waters as long as the fence or other obstruction is not intended to block access for recreational activity. In turn, SB63 prohibits any person from harassing an individual recreating on the Weber River navigable waters.
More broadly, SB63 would impose a class B misdemeanor on anyone trespassing on private property along any public water in the State of Utah and also impose fines, which increase with each recurring offense.