Thursday, December 27, 2012

Beryl-Enterprise Groundwater Management Plan

On December 21, 2012, the Utah Division of Water Rights adopted the Beryl-Enterprise Groundwater Management Plan.  The objectives of the Plan are to "limit the groundwater withdrawals to safe yield, protect the physical integrity of the aquifer, and protect water quality."  The Beryl-Enterprise area has been an area where groundwater has been pumped faster than it can be recharged (also known as groundwater mining).  The Division has determined that although the safe yield for groundwater in the area is approximately 34,000 acre-feet per year, current groundwater depletion in the area is approximately 65,000 acre-feet per year. 

To address this issue, the Plan provides that total water depletion in the area will be reduced over time until the depletion matches the safe yield.  In other words, over time, water rights will be eliminated, with the "newest" water rights being eliminated first.  Over the first 40 years, the depletion will be reduced by 10%.  For each ten-year period thereafter, the depletion will be reduced by an additional 5%.  It is expected that by the year 2130, enough water rights will have been eliminated that the groundwater will stabilize. 

The Plan leaves open the opportunity for water users in the area to participate in a voluntary arrangement to manage withdrawals other than by priority date.

To read the entire Plan, click here.

For more information about the Plan, click here.

For a list of the Beryl-Enterprise water rights listed by priority, click here.

Monday, December 17, 2012

Hardy v. Eagle Mountain City

Last week, the Utah Court of Appeals issued its opinion in Hardy v. Eagle Mountain City.  The opinion addresses issues of appurtenance of water rights and trust deeds.

The plaintiffs in the case were lenders who loaned money to a development company.  The loan was secured by a trust deed and promissory note.  The trust deed secured two parcels of land and "all water rights . . . and appurtenances thereunto belonging."  The development company later conveyed a 160 acre-foot water right to a sister company, who in turn conveyed the water right to Eagle Mountain City and received "banked water entitlements" in exchange.  When the development company defaulted on its loan, the lenders attempted to foreclose on the 160 acre-foot water right, asserting that the water right was encumbered by the trust deed.  This lawsuit followed.

The district court ruled in favor of the lenders, and issued a decree of foreclosure under which the lenders were allowed to foreclose on the remaining banked water entitlements.  Eagle Mountain City appealed the decision to the Utah Court of Appeals.

One of the primary arguments put forward by the City was that the trust deed was ambiguous, and that the trial court therefore should have considered extrinsic evidence regarding the parties' intent.  The Court of Appeals began its analysis by noting that a trust deed is a conveyance document for purposes of the relevant code section: Section 73-1-11.  The Court then determined that none of the exceptions listed under 73-1-11(1) applied in this case.  The City had argued that because the promissory note had specifically mentioned other water rights that were put up as collateral, that the exception for "convey[ing] a part of the water right" should apply.  The Court rejected this argument on two bases.  First, the Court held that the trust deed--and not the promissory note--was the relevant conveyance document, and the trust deed had conveyed all appurtenant water rights.  Second, the Court held that even if the promissory note could be considered a conveyance document, the exception still would not apply because the promissory note listed other, separate water rights, and not a portion of the 160 acre-foot water right.  The Court also determined that the language in the deed covering "all water rights . . . and appurtenances thereunto belonging" was unambiguous.  Accordingly, the Court rejected the City's argument of ambiguity, and interpreted the trust deed based on its unambiguous language.  The Court of Appeals also upheld the district court's determination that the water right was appurtenant to one of the parcels of land listed in the trust deed.

The Court of Appeals also upheld the district court's alternative determination that the conveyance from the development company to its sister company was a fraudulent transfer, as no value was given by the sister company.  Furthermore, the Court of Appeals upheld the district court's determination that the City did not qualify as a good-faith transferee for value. 

In the end, the Court of Appeals affirmed the district court's decision in its entirety and upheld the lenders' ability to foreclose on the banked water entitlements.

To read the full opinion, click here.

Thursday, November 15, 2012

Historic Property Effect Evaluations

Last year, the Utah Division of Water Rights began requiring a Historic Property Effect Evaluation (“HPEE”) to be submitted with water right applications, including applications to appropriate, change applications, and exchange applications.

Recently, the state historic preservation officer and the Division of Water Rights have made a policy change, and a HPEE is no longer required on water right applications.

Monday, October 1, 2012

Stern v. Metropolitan Water District of Salt Lake & Sandy

A few months ago, the Utah Supreme Court issued its ruling in Stern v. Metropolitan Water District of Salt Lake & Sandy.  This case relates to the Point of the Mountain Aqueduct ("Aqueduct") that was constructed by Metropolitan Water District of Salt Lake & Sandy ("Metropolitan Water"), specifically to the portion of the Aqueduct that was constructed in the old easement for the Draper Canal.

The Draper Canal ("Canal") was constructed in the early 1900s by Utah Lake Irrigation Company ("ULIC"). Rights to construct the Canal across private property were obtained from property owners by voluntary transfer (i.e., deed) or by condemnation judgments. Some of the deeds and judgments referenced that the easement would be used for "canal purposes only." Shortly after its construction, the Canal was conveyed to Draper Irrigation Company. For decades, Draper Irrigation used the Canal to convey irrigation water to its shareholders.  Over the years, the canal was also used by Salt Lake County and then Draper City for storm water purposes. In the 1990s, Draper Irrigation Company piped much of its water distribution system and ceased using the portion of the Canal at issue in this case. In 2001, Draper Irrigation Company conveyed the Canal to Draper City so that it could be used for storm water purposes as well as a public trail. Soon afterward, Metropolitan Water negotiated with Draper City to construct the Aqueduct in the Canal easement. The Aqueduct was buried, but some cement structures rose above ground. The Aqueduct transports culinary water to Salt Lake City and others in the Salt Lake Valley.

Four landowners whose property borders the Aqueduct brought suit, alleging that the construction of the Aqueduct exceeded the scope of the Canal easement. The landowners also alleged that the Canal easement had been abandoned. The district court ruled in favor of Metropolitan Water, and the landowners appealed to the Utah Supreme Court.

The Court first examined the portion of the Canal that had been acquired by a stipulated judgment of condemnation. The landowners asserted that the only property interest that ULIC could have obtained through condemnation was an easement interest, and not fee simple ownership. The Court concluded, however, that because it was a stipulated judgment of condemnation, and not a contested judgment, there was no reason why ULIC could not have obtained fee simple ownership of the property. Thus, the Court concluded that Draper City owned the land, and could allow the Aqueduct to be constructed on it.

The Court then examined another portion of the Canal that had been acquired by deed. The landowners asserted that these deeds from their predecessors-in-interest to ULIC conveyed only an easement right and not fee simple ownership. The Court disagreed, and held that the deeds did pass fee simple ownership because the deeds used the phrase "conveys and warrants," which demonstrates intent to pass ownership and not just grant an easement. The Court did hold, however, that the language in the deed limiting use to "canal purposes only" was a covenant that ran with the land.

The Court then had to determine the scope of the "canal purposes only" limitation and determine whether it prohibited an enclosed and buried pipeline to convey culinary water. The Court first determined that "canal purposes" could include conveyance of culinary water. This determination was based largely on the fact that in the early 1900s, canals were used to convey water used for domestic and culinary purposes.  The Court then determined that an open canal could be enclosed. This determination was based largely on prior Utah cases that allow ditch and canal owners to improve their methods of conveyance, provided that the improvements are reasonable and do not materially alter the burden on the land.  Finally, the Court determined that district court had failed to apply the standard regarding reasonableness and material alteration of the burden.  Accordingly, the Court remanded the case to the district court for additional proceedings on the issues of whether Metropolitan Water's improvements related to the Aqueduct were performed reasonably and whether the improvements materially altered the burden on the land.

In a final note, the Court upheld the district court's conclusion that Draper Irrigation had not abandoned the Canal easement. The Court specifically noted that even when Draper Irrigation had ceased using the Canal to convey irrigation water, the Canal was still being used to convey storm water.

To read the full opinion, click here.

Saturday, September 29, 2012

How Do I Protest a Water Rights Application?

The Utah Division of Water Rights' administrative process for change applications, applications to appropriate, exchange applications, and other water right applications includes advertising of the application and a protest period.  During the twenty-day protest period, an interested party can file a protest with the Division in opposition to the application. Although some regional offices keep protest forms at their office, there are no protest forms on the Division's website, and a protest form is not required.  The protest can be submitted in the form of a letter.  There are, however, a few rules to remember when preparing and filing a protest:
  • Clearly identify the water right number, application number, and name of the water right owner/applicant.
  • Cite specific reasons for the protest. You may want to review, and possibly cite to, the Utah Water and Irrigation Code for relevant law and requirements regarding the application at issue (for example, Utah Code sections 73-3-3 and 73-3-8 provide requirements for approval of a change application)
  • State whether or not you request a hearing on the application.
  • Include your name and mailing address so that the Division can send you notice of any hearings, notice of the Division's decision, and other notifications regarding the application.
  • Include a $15 protest fee. Keep in mind that the fee is per application, not per protest. Accordingly, if you are filing one protest regarding three different applications, the fee would be $45.
  • The protest must be filed (and not just postmarked) by the last day of the protest period.

Thursday, August 2, 2012

Magna Water Company v. Strawberry Water Users Association

The Utah Court of Appeals recently issued its opinion in the case of Magna Water Company v. Strawberry Water Users Association.  This case relates to rights use return flow of imported water from the Strawberry Valley Project.

The Strawberry Valley Project is a federal project that imports water from the Colorado River drainage into the Utah Lake basin.  When the water is used for irrigation and other purposes, a portion of the water returns to the natural hydrological system, generally through seepage into the groundwater aquifer or as surface runoff to streams and lakes. Both the federal government and the Strawberry Water Users Association ("SWUA") claim the right to recapture and reuse this return flow after it commingles with the natural hydrological system.

SWUA petitioned the district court for an interlocutory decree regarding use of the return flow in the general adjudication of the Utah Lake and Jordan River drainage. The State Engineer issued a proposed determination supporting the recapture and reuse of the Strawberry Valley Project water.  Magna Water Company and others ("the Objectors") filed an objection to the proposed determination, asserting that the State Engineer's recommendations in the proposed determination departed from Utah law and that Objectors' water rights and interests would be adversely affected. The district court ruled that the Objectors lacked standing, and therefore could not participate in the court proceedings.  Accordingly, the court dismissed the Objectors' claims.  The Objectors then appealed to the Utah Court of Appeals.

The Court of Appeals first examined whether the Objectors had "traditional standing."  The Court held that the Objectors did not meet the first prong of the traditional standing test, which is the showing of a distinct and palpable injury.  The Objectors had argued that the recapture and reuse of return flow would result in reduced diversions from the Objectors' wells.  The Court, however, concluded that the Objectors' wells were upgradient from and not affected by Utah Lake and the Jordan River. Thus, the Court upheld the district court's determination that the Objectors had failed to show injury, and were therefore not entitled to traditional standing.

The Court of Appeals next examined whether the Objectors had "alternative standing."  The test for alternative standing is that the party must show that it is an appropriate person to raise issues of significant public importance.  The Court determined that the Objectors were appropriate persons because they had the interest necessary to effectively assist the court in developing and reviewing relevant factual and legal issues.  The Court also determined that the recapture and reuse recommendations contained in the proposed determination were of significant public importance because many water users will be affected by the proposed determination and because the recapture and reuse issues are uncharted areas of law in Utah. Thus, the Court held the Objectors had alternative standing.

In the end, the Court of Appeals held that the district court had erred in dismissing the Objectors' claims, and the case was sent back to the district court for further proceedings, with the Objectors' participation.

To read the full opinion, click here.

Monday, July 2, 2012

Meguerditchian v. Smith

The Utah Court of Appeals recently issued an opinion in the case of Meguerditchian v. Smith, which addressed an issue related to Utah water rights.

In the case, Mr. Meguerditchian had obtained a court judgment of approximately $55,000 against Mr. Smith in a breach of contract case.  Mr. Meguerditchian filed for and received a writ of execution, under which the sheriff was instructed to sell Mr. Smith's personal and real property to satisfy the judgment. The notice for the sheriff's sale indicated that the property to be sold would include Mr. Smith's interest in Water Right #51-224 and "other rights of [Mr. Smith] in water rights and/or interests in water wells located in Sanpete County, Utah."  At the sale, Mr .Meguerditchian purchased Water Right #51-224 for $30,000 and the other unspecified water rights for $3,000.  Mr. Smith then asked the district court to set aside the sale.

The district court concluded that the water rights were worth at least $150,000, and that the sales price had therefore been grossly inadequate. The district court also concluded that the description of the water rights in the notice of sale had been insufficient.  The court ruled that the insufficient descriptions may have caused confusion and discouraged bidders.  Based on these determinations, the district court set aside the sheriff's sale of the water rights.  Mr. Meguerditchian appealed the decision to the Utah Court of Appeals.

The Court of Appeals noted that the Utah Rules of Civil Procedure require that notice of a sheriff's sale include "a particular description of the property to be sold."  The Court concluded that the notice of sale's description of Water Right #51-224 was sufficient to allow for the sale of the 3.275 acre-feet of water that Mr. Smith owned under Water Right #51-224.  Accordingly, the Court reversed the district court's decision on this point, and held that the sale was proper.  It appears, however, that the Court of Appeals upheld the district court's determination with respect to the other unspecified water rights, which appear to be Mr. Smith's segregations from Water Right #51-224.

To read the full opinion, click here.

Wednesday, June 13, 2012

Utah Stream Access Coalition v. State of Utah


The Fourth District Court of Utah (Judge Derek Pullan) recently issued a ruling on the motions for summary judgment filed in the Utah Stream Access Coalition v. State of Utah case regarding stream access on the Provo River. 
The court begin its ruling by holding that to the extent that Utah Code section 73-29-103 purports to interpret the Constitution and determine the constitutionality of HB 141, it violates Article V of the Utah Constitution.  The court noted that Article V, Section1 prohibits the legislature from exercising the powers of the judicial branch, and that it is the judiciary’s responsibility to determine what the Constitution means and whether a statute violates the Constitution.  The court noted, however, that “[a]t best, the statute constitutes an expression of legislative intent and nothing more.”
The court next held that Article XVII, Section 1 of the Utah Constitution recognizes and confirms public ownership of water in the state, as well as the public easement derived from that ownership.  The defendants had argued that the public easement recognized in the JJNP and Conatser cases is a creature of statute, but the court held otherwise.  The court cited prior case law and Utah history to support its conclusion that “public ownership of natural waters has always been, independent of any statutory grant.”  The court concluded that this also encompassed corollary rights, including the public’s recreational easement recognized in JJNP and Conatser.
Next, the court held that the Utah legislature has the authority to regulate use of waters owned by the public and the recreational easement derived therefrom.  The court noted that public ownership of the water and recreational easement does not eliminate the legislature’s authority to regulate; rather, the public ownership is the basis for the regulatory authority. 
The court then had to determine whether HB 141 did more than regulate use.  USAC contended that HB 141 essentially transferred a public asset to private ownership without compensation.  The court, however, did not agree with this contention.  The court concluded that HB 141 regulates the extent to which the public may use the public easement, but did not transfer or destroy the easement.
The court next had to determine whether the legislature’s regulatory authority is limited by Article XX of the Utah Constitution.  Article XX, Section 1 of the Utah Constitution provides that public lands are held by the State in trust for the benefit of its citizens, and may be disposed of for a public purpose or as provided by law.  The court concluded that the recreational easement constitutes an interest in land, and is therefore covered by Article XX.  However, because HB 141 did not dispose of the easement, it did not implicate the trust responsibilities imposed by Article XX.
Finally, the court reached the question of whether the public trust doctrine applies.  The court first looked at the federal public trust doctrine.  The court concluded that because HB 141 did not give the public easement to a private party, the federal public trust doctrine does not apply.  The court then noted that Utah case law recognizes a state public trust doctrine, under which the State regulates the use of water as trustee for the benefit of the people, and that this public trust doctrine applies to both navigable and non-navigable waters.  The court noted, however, that the nature and scope of the state public trust doctrine has not been well-defined in case law, and that the parties in this case had not had sufficient opportunity to brief the issue of the state public trust doctrine.  The court noted that “considerable deference” should be given to legislative decisions relating to the use of state waters, but that regulations that are illegal, arbitrary, capricious, or in clear violation of trust purposes are subject to judicial review.  The court asked the parties to submit additional briefing on the state public trust doctrine, after which the court will make a decision on this issue, which appears to be the sole remaining issue in the case.

Thursday, May 3, 2012

Where Can I Get Copies of Proposed Determinations?

As discussed in a prior article, an important part of a General Adjudication is the publication of the Proposed Determination.  Unless an objection is submitted, the Proposed Determination is the governing document until a final Decree is issued. 

Copies of Proposed Determinations are available on the Utah Division of Water Rights' website.  Click here to access the list of Proposed Determinations available online, which are listed in order of water right areas.

Tuesday, March 13, 2012

2011 Utah Groundwater Report

Each year, the United States Geological Survey (USGS) publishes a report on groundwater conditions in Utah. The report is prepared and published in cooperation with the Utah Division of Water Resources, the Utah Division of Water Rights, and the Utah Division of Water Quality. The report is a valuable resource containing information on well construction, groundwater withdrawal, groundwater level changes, groundwater quality, and much more.

The 2011 report is available online and can be accessed by clicking here.

Monday, March 12, 2012

2012 Utah Legislature Wrap-Up

The 2012 Utah legislative general session has come to an end. Below is a summary of bills that passed, as well as some important bills that did not pass (and that we may see again next year).

BILLS THAT PASSED

House Bill 127: Navajo Water Rights Negotiation Account
HB 127 establishes funding for drinking water projects to serve the Navajo Nation

House Bill 153: Diversion of Water
HB 153 allows the State Engineer to reinstate a lapsed exchange application under certain circumstances.

House Bill 485: Change Application Amendments
HB 485 is in partial response to the Salt Lake City v. Big Ditch case. The bill requires that a change application filed on a federal reclamation water right must be signed both the federal government and the local water users organization that is contractually responsible for the project.

Senate Bill 134: State Water Development Commission Amendments
SB 134 changes the make-up of the State Water Development Commission, including increasing the number of legislative members and turning the other members into non-voting members.

BILLS THAT DID NOT PASS

House Bill 67: Storm Water Capture Amendments
HB 67 sought to allow for detention of storm water and to amend the rainwater harvesting statute.

House Bill 174: Sales and Use Tax Allocations for Water Resources Construction Fund
HB 174 sought to set aside future sales and use taxes to fund the Water Resources Construction Fund, which would then be used to fund water projects, such as the Lake Powell pipeline.

House Bill 368: Abandonment or Forfeiture of Water Rights
HB 368 sought to change an ambiguous forfeiture exemption that occurs between the issuance of a proposed determination and a final decree--which can sometimes be decades. The bill also sought to (a) prevent the State Engineer from asserting forfeiture of a water right in a general adjudication for periods ending more than fifteen years before the proposed determination; and (b) prevent someone from bringing a forfeiture claim against a water right included in a proposed determination, except through a timely objection to the proposed determination.

House Bill 369: Adjudication of Water Rights
HB 369 sought to amend general adjudication statutes by (a) allowing the Division of Water Rights, and not the court clerk, to give notices in the general adjudication, and (b) allowing for electronic service of documents in the general adjudication.

House Bill 486: Water and Irrigation Amendments
HB 486 sought to make mostly minor changes, including (a) make rulemaking related to wastewater reuse discretionary for the State Engineer, (b) remove the requirement that a proof of beneficial use must include both a professional engineer stamp and notary stamp, and (c) remove requirement of verification under oath of diligence claims.

Senate Bill 78: Water Conservancy District Amendments
SB 78 sought to remove the ability of some water conservancy districts to assess property taxes.

Senate Bill 187: Change Application Procedure
SB 187 sought to make changes to the code in response to the Salt Lake City v. Big Ditch case and the Jensen v. Jones case. The bill sought to better define a person entitled to file a change application. The bill also sought to give the State Engineer consider nonuse in the context of a change application proceeding, and to deny or limit approval of the change application based on nonuse.

Thursday, February 9, 2012

Rules to Remember When Purchasing Water Shares

Below is an article that I recently wrote for Western AgCredit's FenceLines magazine. A PDF copy of the full magazine can be seen by clicking here.


In a previous article, I discussed five general rules to remember when purchasing a water right. There are, however, a lot of agricultural water users who do not own water rights, but receive their water under shares in a mutual water company (i.e., irrigation company, ditch company, canal company, etc.). As with purchasing water rights, you should do proper due diligence prior to purchasing water shares. The purpose of this article is to provide five general rules to remember when purchasing water shares (or land that includes water shares) in Utah.

1. Research the Water Company
You should first do some research on the water company to determine if the shares can be used where and how you plan to use them. Review the water company’s articles, bylaws, turn schedules and policies and procedures so that you understand how the company operates. The seller should be able to get copies of these documents from the company for you to inspect. Contact a director or the secretary of the water company to determine how much water you will receive per share. Research the company’s water rights to ensure that your proposed use comports with the company’s water rights and that there are no major issues affecting the company’s water rights that could affect your ability to receive the quantity of water that you anticipate under the shares.

2. Research Ownership of the Water Shares
You want to make sure that the seller actually owns the shares that he/she is trying to sell you. Although possession of a share certificate is generally good evidence that the person owns shares, there are circumstances where a person can be in possession of a share certificate but not actually own valid shares. Ownership of shares is not determined by researching records at the county recorder’s office or the Division of Water Rights. Rather, ownership of shares is determined according to the internal records of the water company. Contact the company’s secretary to see if the seller’s shares are valid shares.

3. Ensure That All Assessments Are Paid
Water shares generally carry the responsibility of making yearly (or sometimes monthly) assessments. Before purchasing water shares, check with the secretary of the water company to find out how much a typical assessment is and to ensure that all prior assessments have been paid. Generally, a water company will not issue a new certificate to a buyer unless all assessments are paid. You definitely do not want to buy some shares and then discover that there you are obligated to pay several hundred dollars of overdue assessments.

4. Determine the Value of the Water Shares
To determine the value of the water shares, you should find out how much other shares in the same company have been selling for. Sales of water shares are not public record, so determining the value may involve doing some asking around. Check with a director or the secretary of the water company, as they may have knowledge of what shares have been selling for recently. Also, ask others who have recently bought or sold water rights in the same company. Be sure not to compare prices with shares in other water companies. Shares in one company may entitle you to much more (or much less) water than in another company, and the prices of shares are therefore not comparable.

5. Have the Seller Endorse the Share Certificate
 Most water companies issue share certificates to their shareholders. To convey the water shares, the seller generally endorses the back of the certificate to the buyer. The buyer then takes the endorsed certificate to the company secretary, who issues a new certificate in the buyer’s name. Most companies charge a small fee for issuing the new certificate. Prior to finalizing the purchase, be sure to check with the company’s secretary and/or the company’s bylaws and regulations regarding the company’s procedure for transferring title to the shares. Because water shares are transferred like certificated securities under the Utah Uniform Commercial Code, it is not necessary to execute or record a deed when purchasing water shares. You may, however, consider drafting a simple contract or bill of sale that gives the price and other terms and conditions of the sale.

Water shares are a valuable asset and a vital resource in most farming operations. Unfortunately, however, people purchasing water shares oftentimes do not spend the time necessary to research and evaluate the water shares prior to the purchase. Following the five steps outlined in this article can go a long way in ensuring that you get what you pay for in your next purchase of water shares.

Saturday, January 21, 2012

2012 Legislative Preview on Water Issues

The following article was published in the Water & The Law newsletter, which our firm publishes on a quarterly basis. If you would like to receive an email version of the newsletter, please click here to join our mailing list.

The 2012 General Session of the Utah Legislature runs from Monday, January 23, 2012 through Thursday, March 8, 2012. As a result of some major water-related decisions this past summer from the Utah Supreme Court, there will likely be some significant water bills considered during the session. Because of an apparent bottleneck in legislative research and drafting, many of the proposed bills have not yet been formally processed and do not have a bill number assigned. The following legislative preview is divided into three groups: (1) bills addressing significant policy issues; (2) bills proposing technical or minor revisions, refinements, and/or clarifications to the existing laws; and (3) bills that have been discussed but not released for public review and which may or may not surface during the session.

Bills Addressing Significant Policy Issues
S.B. 11 - Department of Environmental Quality Boards Adjudicative Proceedings - This bill, sponsored by Senator Margaret Dayton, creates a distinct type of review proceedings for permits decisions made by five divisions within the Department of Environmental Quality (i.e., Water Quality, Drinking Water, Air Quality, Radiation Control, and Solid & Hazardous Waste). S.B. 11 provides that a permit order may be reviewed by an administrative law judge (ALJ) on the record. Specifically, only issues raised in the initial permit review process may be addressed on review. The ALJ submits a proposed order to the relevant board, which then makes the final decision on the review. The Board's decision can then be appealed to the Court of Appeals for a review of the decision on the record. The Natural Resources, Agriculture, and Environment Interim Committee recommended passage of this bill.

S.B. 21 - Department of Environmental Quality Boards Revisions - This bill, also sponsored by Senator Dayton, revises many attributes and powers of the various boards associated with the Department of Environmental Quality (DEQ). Specifically, the bill assigns executive functions to the division directors rather than the boards. It also changes the composition of the boards and identifies qualifications of individual members. It requires compliance with attendance and conflict of interest standards. And it transfers some powers and duties previously assigned to the boards to the respective directors of the division in DEQ. This bill is currently 187 pages long and represents a significant shift in how decisions are made within DEQ. The Natural Resources, Agriculture, and Environment Interim Committee recommended passage of this bill.

H.B. 67 - Stormwater Capture Amendments - This bill, sponsored by Rep. Fred C. Cox, amends Utah Code section 73-3-1.5, the rainwater harvesting section, to allow for beneficial use of up to 2,500 cubic feet per parcel (18,701 gallons or 0.057 acre-feet) of water without a water right if the primary purpose of capturing the water is stormwater management or pollution control. A person must first submit a simple form to the State Engineer before beneficially using any captured precipitation. This bill was somewhat of a surprise to the water community and was not discussed by either the Water Coalition or the Executive Water Taskforce.

Bills Making Minor Changes or Technical Revisions
Water and Irrigation Amendments - This bill, which has not yet been made public, will be sponsored by Rep. Neal Hendrickson, and is believed to effect a number of largely technical changes proposed by the State Engineer including the following: (1) an amendment of section 73-1-4 that removes a virtual forfeiture exemption for the sometimes-decades-long period between when the State Engineer issues a proposed determination and when a final decree is issued by the court; (2) an amendment of section 73-2-1 that makes rulemaking related to sewage effluent reuse discretionary for the State Engineer; (3) an amendment of section 73-2-22 that updates the name of the Emergency Management Administration Council; (4) an amendment of section 73-3-12 to further define how the State Engineer should assess proof extensions for wholesale electrical cooperatives beyond fifty years; (5) an amendment of section 73-3-16 that removes the requirement that a submission of proof have both a professional engineer stamp and a notary stamp; (6) an amendment of section 73-3-20 that allows small exchange applications that have lapsed to be reinstated with a later priority date; and (7) an amendment to sections 73-4-3, 73-4-4, and 73-4-11 that provides that notices in general adjudications be completed by the Division of Water Rights rather than the court clerk.

Bills That May Surface During the Session
Change Applications I - For the last four years, the State Engineer has requested that the scope of his review of historical beneficial use in acting upon change applications be more clearly defined by statute. This past summer, the Utah Supreme Court issued the Jensen v. Jones opinion that concluded that the State Engineer lacks authority to consider nonuse of a water right when ruling on a change application. As a result, the Water Coalition and Executive Taskforce have recommended approval of a bill that will give the State Engineer statutory authority to consider nonuse and deny or limit a change application if there is nonuse, using a framework that gives the applicant additional notice and protections.

Change Applications II - During 2011, the Utah Supreme Court issued the Salt Lake City v. Big Ditch Irrigation Co. opinion that determined that a water user may be able to file a change application on a water right even if he is not the record owner of the right. As a result, the Water Coalition and Executive Taskforce have recommended approval of a bill that will allow a change application to be filed only by (1) the record owner of the right, (2) one who has permission from that record owner, or (3) a water company shareholder under Utah Code section 73-3-3.5. This proposed amendment will likely be considered as a consolidated bill with the amendment discussed above as Change Application I.

Change Applications III - As an additional response to the Salt Lake City v. Big Ditch Irrigation Co. case, there has been a proposal to amend Utah Code section 73-3-3 to require that a change application on a water right owned by the federal government as part of Bureau of Reclamation project must be signed by both the federal government and the local sponsor of that project.

State Water Development Commission Amendments - This bill, which has not yet been made public, will be sponsored by Senator Margaret Dayton, and is believed to seek conversion of the commission into a permanent legislative task force or commission that addresses water needs of the state.

Other Bill Request Topics - Navajo Water Rights Compensation Account (C. Watkins), Safe Drinking Water Disclosure Act (R. Barrus), Special District Amendments (J. Stevenson)

Are You Ready for the Canal Safety Plan Deadline?

The following article was written by David Hartvigsen, a partner at Smith Hartvigsen, PLLC, for the Water & The Law newsletter that our firm publishes on a quarterly basis. If you would like to receive an email version of the newsletter, please click here to join our mailing list.

In response to the tragic loss of life when a landslide breached the Logan & Northern Canal in Logan on July 11, 2009, the Utah State Legislature passed two canal safety bills - 2010 House Bill 298, Land Use Authority Notification of Canal Development, and 2010 House Bill 60, Water Conveyance Facilities Safety Act (Act). The Utah Association of Conservation Districts (UACD) has helped the Logan & Northern Irrigation Company (LNIC) and the Logan, Hyde Park and Smithfield Canal Company (which is allowing LNIC to use part of its canal to get water around the breach) complete a joint Safety Plan on their canal systems. Though a confidential and protected document under the Act, it follows the template plan that is now available to all irrigation companies through UACD and the Utah Division of Water Resources (DWRe).

The purpose of House Bill 298 was to ensure that residential construction projects within close proximity to a canal do not proceed until the canal owner has been given an opportunity to review the project. Thus the canal owner can protect the integrity of the canal system and assist homeowners and developers to safeguard adjacent water structures. Canal owners had until July 1, 2010 to provide a general description of their canal, including contact information, to each county or municipality in which the canal operates. If you haven't provided this information yet, the sooner the better, because a homeowner or developer could argue that damages or losses could have been avoided if this information had been timely provided.

The purpose of House Bill 60 was to encourage canal owners to identify the risks associated with their canal systems and to develop solutions to reduce or eliminate those risks. This information is to be documented in a Water Conveyance Facility Safety Management Plan ("Safety Plan") by no later than May 1, 2013. As a means of promoting compliance with the Act, DWRe may only provide financial assistance to canal companies that have met this deadline, with some limited exceptions. If your canal company has not yet started on the inspections needed for the Safety Plan, you should be including funding in this year's budget and assessments to get that work done because this summer is the last summer before the deadline to do the inspections and field work. It is very difficult to assess site conditions and certain of the risk factors when the canal is under a blanket of snow.

In January 2011, UACD partnered with various state, federal, and private organizations, including the Strawberry-Highline Canal Company, DWRe, and the U.S. Bureau of Reclamation, to produce a Safety Plan template. Canal companies can use this template as they develop their own Safety Plan. The template, as well as the full text of House Bills 60 and 298, are available online here.

The main canal risk factors that must be addressed in the Safety Plan are slope instability and storm water. Subsection 4 of House Bill 60 places the responsibility on the municipalities to identify storm water inlets into canals and estimate the maximum flow that could occur at each inlet. As canal companies have sought to obtain this information from local governments, it has become apparent that many cities do not have accurate data nor up-to-date maps of their storm water drainage systems. On canals with multiple storm water inlets, canal operators have faced the task of balancing water levels so that there was adequate capacity for storm water each time a large rainfall occurred. However, city governments and canal companies have begun to work more closely together for comprehensive storm water management.

A water company may be exempt from the requirement of adopting a Safety Plan depending on the type of water conveyance facility owned by the company. Natural channels and pipelines are not considered water conveyance facilities according to House Bill 60. In addition, since the bill was meant to address the risks to population and infrastructure, canals that don't have any potential risk locations may also be exempt. A potential risk location is defined as a segment of a water conveyance facility that, if it were to fail, would create a high probability of causing loss of human life or extensive damage to infrastructure. To determine if their canals have potential risk locations, canal companies must consider the following parameters: location, elevation, soil conditions, structural instability, water volume or pressure, or other conditions. Each parameter must be evaluated in relation to existing and future urban development.

As water companies continue to implement House Bill 60, there will be additional issues and concerns that come forth. A recent request was made to DWRe to consider different canal systems within a single company as separate entities. The canal company determined that one canal system had no potential risk locations and was therefore exempt from adopting a Safety Plan, even though other canal systems owned by the company, once they have been fully evaluated, may still require the adoption of a Safety Plan. DWRe will evaluate these types of requests on an individual basis.