Thursday, April 30, 2009

2009 Amendments to Utah Water Rights Laws

(I recently wrote this article for the Utah Water Users Association newsletter.)

The majority of the bills passed during the 2009 session of the Utah Legislature will take effect on May 12, 2009. Included in this list are several important bills relating to water rights. This article examines three water rights bills that were passed during the 2009 legislative session: House Bill 18, House Bill 85, and House Bill 389. All three of these bills were sponsored by Representative Patrick Painter, a friend and ally to the water community who continues to work to improve water rights law and administration.

House Bill 18
HB 18 is entitled “Water Rights Applications and Records.” The bill revises the law on the proof process for applications to appropriate and change applications. Importantly, the bill provides that if a public water supplier is holding an approved application to meet the reasonable future water requirements of the public, it is deemed to be reasonable and due diligence in completing the appropriation or change. This essentially entitles the public water supplier to an extension of time to complete the appropriation or change.

HB 18 also amends the law on requests for segregation. Currently, the law gives the State Engineer discretion to approve or deny a segregation request. Under HB 18, if a water rights owner requests that a water right be segregated into two or more parts, the State Engineer is required to segregate. The bill also provides that applications to appropriate and change applications may be segregated, and that after the State Engineer segregates an application, each segregated part becomes a separate application on the State Engineer’s records. These changes will allow an applicant who has not completed the entire appropriation or change to segregate off the portion that has been completed and prove up that portion. The uncompleted portion becomes a separate application, and the applicant can file for an extension on that portion and prove it up in the future.

Finally, HB 18 permits a water right owner to consolidate water rights. Currently, the law allows water rights to be segregated, but there is nothing in the law that allows the water rights to be rejoined into a single water right. This provision of HB 18 permits the State Engineer to consolidate two or more water rights if the water rights are from the same source, have the same priority, and are sufficiently similar in definition.

House Bill 85

HB 85 is entitled “Mutual Benefit Corporation – Judicial Liens.” The bill protects mutual water companies in lawsuits when cash damages are assessed against them in the form of a judicial lien. Under the bill, if a judicial lien is recorded against a mutual water company’s water rights, water conveyance facilities, or other assets that are necessary to distribute water to the company’s members, a court must wait 180 days before executing the lien or forcing the sale of the assets. This 180-day period allows the mutual water company to make other arrangements to pay the judgment, such as by doing a special assessment or getting financing by using the assets as collateral. Allowing the mutual water company to pay the judgment without losing its water rights and other assets protects the company’s members, whose livelihoods may depend on receiving water from the company.

House Bill 389
HB 389 is entitled “Applications for a Small Amount of Water.” The bill changes the proof requirements for applications to appropriate and change applications for a small amount of water. A “small amount of water” is defined as the amount of water necessary to meet the requirements of one residence, ¼ acre of irrigable land, and ten stock units. Rather than submitting a traditional proof prepared by an engineer, an applicant is permitted to submit an affidavit as proof. The affidavit must declare that a residence has been constructed and is occupied and must specify the amount of land being irrigated and the number of livestock being watered. If the affidavit is filed before the date on which proof is due, the State Engineer will issue a certificate.

If proof or an affidavit is not filed within the time limit set by the State Engineer, the application lapses. However, an applicant may request reinstatement of the application by demonstrating that a residence was constructed and occupied within the original time limit and that the water has been beneficially used. If the applicant meets this burden, the State Engineer will issue a certificate, although the priority date becomes the date the request for reinstatement was filed.

All three bills unanimously passed both the House and the Senate, were signed by Governor Huntsman, and will become effective on May 12, 2009.

A special thanks goes out to Representative Painter for sponsoring these bills and for his continuing efforts to work with the water community to develop and improve Utah water law.

Loss of Preference for Drinking Water

In 1880, the Utah Territorial Legislature enacted a law that established a preference for drinking water and other domestic uses over any other type of use in the event of a serious water shortage. This preference has been an exception to the priority date rule--which provides that earlier water rights have priority over later rights--for almost 130 years. The preference is currently codified in section 73-3-21 of the Utah Code. Most prior appropriation states have a similar statute that grants a preference for domestic use in times of scarcity. Indeed, of the 17 western water law states, only Oklahoma does not have a preference statute.

During the 2009 legislative session, the Utah Legislature, at the prompting of the State Engineer’s office and with the support of the Farm Bureau, repealed this preference through House Bill 241. However, as a result of the heated debate over the issue, the Legislature delayed the effective date of the repeal until May 11, 2010, in order to allow the Legislature to again consider the matter in its session next January.

Most of the oldest water rights in Utah, and therefore those with the highest priority, are irrigation rights. Accordingly, without the drinking water preference exception, in times of scarcity, those high priority irrigation rights will have to be fully satisfied before junior priority drinking water rights receive any water. This is obviously a concern to cities, towns, and other public water suppliers because it places plants over people when there is a critical shortage.

During the next few months, the water law attorneys at Smith Hartvigsen, PLLC will be involved in the discussions regarding the drinking water preference statute. If you have any input on the matter, we would love to hear from you.

To read House Bill 241, click here.

Tuesday, April 28, 2009

New Fee Schedule for Utah Division of Water Rights

Effective July 1, 2009, the Utah Division of Water Rights will have a new fee schedule. The following is a summary of some of the more important fee changes.

The cost of filing for most applications will double. This includes fees for:

--Permanent change applications
--Temporary change applications
--Applications to appropriate
--Exchange applications
--Extensions of time to submit proof

The cost for filing a diligence claim will also double. Additionally, the diligence claim investigation fee will increase from $200 to $500.

The fee for filing a report of conveyance will increase from $25 to $40.

Currently, the Division does not charge a fee for stream alteration permits. However, the Division will charge $2,000 for commercial entities, $500 for governmental entities, and $100 for non-commercial entities.

Perhaps the biggest change is that the Division will now charge a fee for protests. Currently, protestants may file their protests for free. However, beginning July 1, it will cost $15 to file a protest with the Division. It will be interesting to see if this new fee will have an effect on the number of protests filed.

So if you are planning to file anything with the Division of Water Rights in the near future, you may want to try to file before July 1 so that you can pay the current, cheaper fee.

To view a full comparison of the current fees and the fees effective July 1, click here.

Friday, April 24, 2009

What Is a General Adjudication?

Under Utah law, the State Engineer may initiate an action in state court in order to analyze and settle all competing claims to the use of water in an area. This action is called a General Adjudication. After a General Adjudication has been initiated, the State Engineer notifies all known water users of the adjudication and provides public notice of the adjudication. Each person claiming a right to use water in the area must file a Water User’s Claim with the State Engineer. In the Claim, the water user states, among other things, the flow of water used, the point where the water is diverted, the place where the water is used, and what the water is used for. The State Engineer also prepares a hydrographic survey of the area. When the survey is complete and all of the Claims have been evaluated, the State Engineer prepares a Proposed Determination. The Proposed Determination is the State Engineer’s recommendation to the court of the status and quantification of water rights in the area. A copy of the Proposed Determination is mailed to each claimant. If a claimant is dissatisfied with the Proposed Determination, the claimant has ninety days to file an objection with the court. After all objections have been resolved and, if necessary, modifications made to the Proposed Determination, the court enters a Decree that establishes all of the water rights for the area.

To read the statutes regarding general adjudications, click here.

Monday, April 20, 2009

HB 187: The Aftermath of Conatser v. Johnson

In an attempt to limit the broad public access granted in the Conatser v. Johnson opinion, Representative Ben Ferry (R-Corinne) introduced HB 187, entitled “Recreational Use of Public Waters,” during the 2009 legislative session. Under the bill, the public would be allowed to engage in recreational activities in rivers that cross private property only if the rivers are designated “public waters.” The bill contained an initial list of “public waters,” which included sections of the Bear River, Little Bear River, Logan River, Price River, Jordan River, Duchesne River, Strawberry River, Sevier River, Weber River, Provo River, Ogden River, White River, and Blacksmith Fork River. This initial list of public waters would be amenable to change. For this reason, the bill sought to establish the Recreational Access Board (“the Board”) within the Department of Natural Resources. The Board would provide recommendations to the Legislature regarding segments of rivers that should be added to the list of “public waters.” The Board would also provide recommendations to the Legislature regarding segments of rivers that should be removed from the list. Ultimately, however, the Legislature would have the final say on the list of public waters that would be open to recreation.

The bill received a favorable recommendation from the House Natural Resources, Agriculture, and Environment Committee. The House amended the bill several times, resulting in several substitute bills. Ultimately, the bill was defeated in the House by a vote of 34-41. The bill was reconsidered, but was again defeated by a vote of 31-43.

Although HB 187 was defeated, there is already discussion regarding a bill to be introduced in the 2010 legislative session that will seek to strike a balance between the broad public access granted in Conatser and the private property rights of landowners whose property abuts rivers and streams. At this time, the details of the bill are unknown, and it is unclear if the bill will be a modified version of HB 187 or if the bill will present an entirely different scheme.

To read the full text of the bill, as originally introduced, click here.

Conatser v. Johnson

In July 2008, the Utah Supreme Court issued the its opinion in the case of Conatser v. Johnson. In Conatser, the Utah Supreme Court was asked to determine whether members of the public who are using a stream for recreational purposes, such as fishing or floating, have the right to touch the privately owned beds beneath the water. The Court noted that because the waters of the state belong to the public, the public has an easement to utilize the waters for recreational purposes. The Court then determined that touching the bed is “reasonably necessary” in order for the public to effectively enjoy the easement and that such touching does not cause unnecessary injury to the owner of the bed. The Court placed limitations on the public’s right, including (1) the public may engage only in lawful recreational activities, (2) the recreational activities must utilize the water, (3) the public must act reasonably in touching the bed, and (4) the public may not cause unnecessary injury to the owner of the bed. The effect of the ruling is that members of the public may enter a stream at a public access point and follow the stream through private land to float, hunt, fish, swim, or do any other recreational activity that utilizes the water without committing trespass.

The Court’s opinion left several questions unanswered. First, it is unknown whether the members of the public must actually be in the water in order to not be trespassing or whether the members of the public can use the bed up to the ordinary high-water mark (or some other point). Second, it is yet to be determined how the Court’s ruling can be reconciled with rules regarding fencing. For example, how does a rancher fence across a small stream in order to keep his cattle on his land without “fencing out” members of the public wishing to use the stream for recreational purposes? These questions, along with others, will have to be determined in future cases or by legislation.

To read the full opinion, click here.

Saturday, April 18, 2009

What Is a "Diligence Right" or "Diligence Claim"?

According to the Utah Division of Water Rights website, a diligence claim is “a claim to the use of surface water where the use was initiated prior to 1903.” In 1903, statutory administrative procedures to appropriate water were first established. Accordingly, after 1903, the exclusive method of obtaining a new surface water right is through filing an application to appropriate with the State Engineer and ultimately obtaining a certificate of beneficial use by “proving up” the water right. Prior to 1903, the method for obtaining the right to use water was to simply put the water to beneficial use. These water rights are known as diligence rights and require beneficial use prior to 1903. In order to memorialize a diligence right, a written diligence claim must be filed with the State Engineer. The State Engineer’s acceptance of a diligence claim cannot be considered an adjudication of the claim’s validity. Any person injured by a diversion pursuant to a diligence claim may file an action in district court to determine the validity of the claim. In such an action, the claimant has the burden of proof as to the validity of the diligence claim.

To read the statute regarding diligence claims, click here.

Friday, April 17, 2009

Otter Creek Reservoir Co. v. New Escalante Irrigation Co.

On March 3, 2009, the Utah Supreme Court issued its opinion in the case of Otter Creek Reservoir Company v. New Escalante Irrigation Company. The case involves adverse use of water. Prior to 1939, water rights in Utah could be obtained by seven years of adverse use. In 1939, the Utah legislature passed a statute which abolished adverse use of water. However, an important question remained: Could a water right be obtained by adverse use if the seven years of adverse use began before 1939 but were not complete before 1939? This case presented the opportunity for the Utah Supreme Court to finally address the question.

The case began when Otter Creek brought suit against New Escalante, claiming that New Escalante was diverting and using water to which Otter Creek was entitled. New Escalante counterclaimed that it had a diligence claim or, in the alternative, that it had obtained right to use the water through adverse use. The district court held that New Escalante had lost its diligence right because it failed to participate in the general adjudication that resulted in the Cox Decree, which was issued in 1936. However, the district court determined that New Escalante began adversely using the water the day after the Cox Decree was issued. The court then determined that because New Escalante began its adverse use prior to 1939, its adverse use could ripen into a water right based on adverse use.

Otter Creek filed an interlocutory appeal on the limited issue on whether the district court correctly determined that if adverse use began prior to 1939, the adverse user could complete the seven years of adverse use after 1939. The Supreme Court began its analysis by discussing past dicta contained in prior opinions. The Court noted that the issue had never been squarely before the Court, resulting in dicta that appeared to support both positions. Ultimately, the Court elected to reject its previous dicta and to construe the 1939 statute based on its plain language. The Court noted that the statute provides that "no right to the use of water . . . can be acquired by adverse use or adverse possesion." The Court also noted that adverse use rights can only be acquired after the seven years of adverse use are completed. Until that time, the adverse user only has an expectation or hope of acquiring the right by adverse use. Thus, the Court determined that the seven years of adverse use must be completed before 1939. The district court's decision was reversed and the case was remanded for further proceedings.

To read the full opinion, click here.

Welcome to the Blog!

I am an attorney who specializes in water rights and water law. As a water rights lawyer, I love learning about water law, discussing water law, and teaching others about water law. Accordingly, I have started this blog about Utah water law and Utah water rights. I hope to make this blog a source for all things related to Utah water law: updates about new laws affecting water rights in Utah, reports of recent Utah cases regarding water rights, articles about basics of Utah water rights, and more. Check back often for updates, and feel free to comment!