2017 Legislative Preview

The 2017 legislative session begins next week. Below are a list of bills relating to water that may be considered during the session.

Bills That Have Been Numbered. The following bills have been numbered and the text of the proposed bills have been released.

H.B. 84: Water Law - Nonuse Applications
House Bill 84, which is sponsored by Representative Tim Hawkes and has been recommended by the Executive Water Rights Task Force, clarifies that: (1) an approved nonuse application excuses the requirement of beneficial use from the nonuse application's filing date; (2) the filing or approval of a nonuse application, or a series of nonuse applications, does not constitute beneficial use or protect a water right that is already subject to forfeiture; and (3) a nonuse application does not bar a water right owner from using the water as permitted under the water right or from claiming any available defense against forfeiture. The bill also modifies the procedures for instituting a forfeiture action for nonuse.

H.B. 118: Authority of State Engineer
House Bill 118, which is sponsored by Representative Tim Hawkes and has been recommended by the Executive Water Rights Task Force, allows the State Engineer to develop rules regarding the "duty of water" or in other words, a quantification of the maximum amount of water that can be beneficially used, without waste, for a particular purpose. Although the State Engineer and the courts in General Adjudications have used this concept for over 100 years, there is no statutory authority for this concept. This bill gives the State Engineer express authority to do what is already being done with respect to the duty of water.

S.B. 11: Water Development Commission Amendments
Senate Bill 11, which is sponsored by Senator Margaret Dayton and has been recommended by the Natural Resources, Agriculture, and Environment Interim Committee, modifies the membership of the State Water Development Commission. The bill removes the following nonvoting members from the Commission: the state treasurer; two representatives of the Governor's Office, including one representative from the Governor's Office of Management and Budget; the executive director of the Department of Natural Resources; the executive director of the Department of Environmental Quality; the commissioner of agriculture and food; a member of the Board of Water Resources; and a representative with experience with finance and economics. The bill adds one nonvoting member to the Commission: a representative of the governor's cabinet or the Governor's Office.

S.B. 45: Retail Water Line Disclosure Amendments
Senate Bill 45, which is sponsored by Senator Karen Mayne, affects public entities that provide culinary water service to customers. The bill requires that these public retail water providers must provide an annual disclosure to its customers that states whether the property owner or the provider is responsible for repairs to the water line that serves the customer. The purpose of the bill is to give better clarification of where the provider's responsibility for water line maintenance ends and where the property owner's responsibility for water line maintenance begins. The bill modifies Utah Code section 11-8-4, which was enacted in 2016 and requires the same disclosure for sewer service providers relative to sewer line maintenance responsibilities.

S.B. 63: Nonprofit Corporation Amendments - Water Companies
Senate Bill 63, which is sponsored by Senator Margaret Dayton and has been recommended by the Executive Water Rights Task Force, modifies the Utah Revised Nonprofit Corporation Act to change the default rule on the transferability of shares in a water company from non-transferrable to transferrable, unless the articles or bylaws of the water company specify otherwise. It states that a shareholder in a water company has "an equitable, beneficial interest in the use of the water supply of the water company, proportionate to the shareholder's shares in the water company, which interest is in the nature of real property." It also now expressly allows a water company to purchase delinquent shares of stock and clarifies the process for distributions to shareholders in a water company. The transferability of shares in a water company is an issue that was raised in the Utah Supreme Court case of Southam v. South Despain Ditch Company.

Bills That Have Not Been Numbered. The following bill files have been opened, but the text has not been released -- although preliminary drafts of some bills have been issued.

Fee List Amendments (Rep. Logan Wilde)
Preliminary drafts of this bill, which has been recommended by the Executive Water Rights Task Force, update the name of an "Extension of Time to Resume Use Application" to its current name used elsewhere in the code, i.e., a "Nonuse Application."

Assignment Addendums (Rep. Logan Wilde)
Preliminary drafts of this bill, which has been recommended by the Executive Water Rights Task Force, allow "Water Right Deed Addendums" to be used and recorded with water right "Assignments" and to have those Addendums be forwarded to the State Engineer.

Public Water Supplier Amendments - Instream Flows (Sen. Jani Iwamoto)
Preliminary drafts of this bill modify Utah's instream flow statute (Section 73-3-30) to allow public water suppliers to change perfected water rights for instream use. The instream flows must be located within the public water supplier's jurisdictional boundaries and the related change application can be up to ten years. The bill would also specify that all approved instream flow change applications will be administered according to the change application's priority date relative to all other rights in the stream system, thereby making the application the most junior right in the system. This represents a change from the current statute, which specifies that change applications for instream flows are distributed according to the application's priority date relative only to other rights the stream section specified in the application, rather than the entire stream system.

Public Water Supplier Amendments (Rep. Merrill Nelson)

Great Salt Lake Commission (Rep. Merrill Nelson)

Water Commissioner Expenses (Rep. Scott Chew)

Water Infrastructure Revisions (Sen. Stuart Adams)

Water Law - Protected Purchaser Amendments (Sen. Margaret Dayton)

Canal Safety
The Executive Water Task Force is recommending changes to the process municipalities follow when notifying canal owners of subdivisions that have been approved within 100 feet of the center line of a canal. Currently, municipalities mostly rely on information they receive from canal owners. The Task Force recommends legislation that would require cities to also use the State Engineer's canal inventory along with information provided by the surveyor who makes the plat for the subdivision. The Task Force also recommends that surveyors consult with the owners of canals that are located within a proposed subdivision or within 100 feet of the subdivision when preparing subdivision plats. Lastly, the Task Force recommends that the State Engineer include enclosed canals within its canal inventory and recommends extending the deadline to complete the inventory until 2019.