2016 Water Bills and Resolutions

The 2016 legislative session is underway. Below are a list of bills and resolutions relating to water that will be considered during the session.

H.B. 82: Property Taxing Authority for Public Water
Rep. Kraig Powell (R–Heber) has proposed House Bill 82  to modify the maximum property tax rate that water districts served by the Colorado River Compact to the Upper Basin can charge. Currently, Section 17B-2a-1006 of the Utah Code allows Upper Basin water districts to increase the amount of property taxes they may impose on individuals and businesses up to a maximum of 0.004 per dollar of taxable value of taxable property.

This bill would continue the current maximum rate through fiscal year 2020, but lower the maximum rate to 0.002 beginning in fiscal year 2021. The fiscal note for the bill estimates that the legislation may decrease the amount of property taxes Upper Basin districts can impose by about $33.6 million beginning in fiscal year 2021. The fiscal note also observes that the districts could make up the decrease through user fees.

You can read the full text of the bill, as introduced, by clicking here.

H.C.R. 1:  Concurrent Resolution on Waters of the United States

Rep. Mike Noel (R–Kanab) has proposed House Concurrent Resolution 1 to express the Legislature’s and the Governor’s joint disapproval of the so-called “Waters of the United States” rule. The Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers finalized the rule last year to resolve uncertainty the U.S. Supreme Court created in its divided Rapanos v. United States decision regarding the extent of Clean Water Act (CWA) jurisdiction. The rule has drawn praise from conservation groups and the ire of farmers, industry, and at least 30 states, including Utah, which have filed challenges in courts across the country to stop the rule.

The proposed resolution criticizes the rule as an “unlawful exercise of federal regulatory authority” that will improperly expand the CWA to include dry land and infringe on the ability of states to manage their water resources. It would also express support for Attorney General Sean Reyes’s ongoing efforts to vacate the rule. The rule is currently on hold pursuant to a nationwide stay the Sixth Circuit Court of Appeals issued in October while it determines which courts have jurisdiction to hear the various court challenges.

If enacted, the resolution would not be Utah’s first concurrent resolution regarding federal CWA jurisdiction. In 2009, the Legislature and former Governor John Huntsman issued HCR 6, strongly opposing federal legislative efforts to expand the scope of the CWA. At the time, a number of bills, commonly known as the “Clean Water Restoration Act,” had been introduced to “restore” the scope of the CWA to the status quo that existed before Rapanos. Republicans and some Democrats defeated these bills, and have since introduced repeated legislation to stop the rule. Given this history, opponents have criticized the rule for enacting provisions Congress has rejected through regulation. EPA and the Corps, as well as the rule’s supporters, deny these claims and maintain that the rule is less expansive that the pre-Rapanos status quo and is needed to provide protections for water quality.

You can read the full text of the resolution, as introduced, by clicking here.

H.J.R. 4: Joint Resolution on Water Infrastructure

Rep. Mike McKell (R–Spanish Fork) is sponsoring House Joint Resolution 4, which urges Utah’s congressional delegation to support the efforts of Utah water users to secure title transfer of reclamation projects and associated water rights from the federal government to local water user organizations. The project specifically mentioned in the joint resolution are the Strawberry Valley Project, Moon Lake Project, and Emery County Project.

You can read the full text of the resolution, as introduced, by clicking here.

S.B. 23: Water Law – Protected Purchaser Amendments

Sen. Margaret Dayton (R–Orem) is sponsoring Senate Bill 23, which was recommended by the State Water Development Commission.  It seeks to modify the definition of a “protected purchaser” in the Investment Securities chapter of the Utah Uniform Commercial Act. The bill would add additional requirements for a purchaser of a share of stock in a water company to qualify as a protected purchaser. The standard requirements of a protected purchaser are (1) give value, (2) not have notice of an adverse claim, and (3) obtain control of the certificate.  A purchaser of a share of stock in a water company would also need to show that he, or his predecessors in interest, (1) paid assessments on the share for at least four of the prior seven years, and (2) used water available under the share for at least four of the prior seven years.

You can read the full text of the bill, as introduced, by clicking here.

S.B. 28: Water System Conservation Pricing

Sen. Scott Jenkins (R–Plain City) is sponsoring Senate Bill 28, which was recommended by the Natural Resources, Agriculture, and Environment Interim Committee.  It requires retail water providers to establish a tiered rate structure where the price per unit of water increases as the quantity of water delivered increases from tier to tier.  Many water retailers already use tiered pricing as a conservation incentive and to obtain assistance from state revolving loan funds.  Each retailer retains the flexibility of identifying the size and number of tiers or blocks of water and of setting the increasing rate applicable to each tier.  This bill mandates this pricing approach for all “retailer water providers,” a term that is already defined by statute as entities which supply culinary water to more than 500 end user connections.  The bill also requires that the end users be given, at least annually, notice of: (1) the amount of water used, (2) the billing cycle or period; and (3) the tiered rates.

You can read the full text of the bill, as introduced, by clicking here.

S.B. 75: Water Rights Adjudication Amendments

Senator Margaret Dayton (R–Orem) is sponsoring Senate Bill 75, which seeks to make a number of changes to the general adjudication statutes found in Title 73, Chapter 4 of the Utah Code. As with other general adjudication amendments that have passed in the last few years, this bill seeks to take more responsibility from the Division of Water Rights and puts it on the water users to ensure that timely and proper water claims are filed.

A substantial change is with respect to the hydrographic survey maps. Previously, these surveys of water use were completed as an initial step by the Division of Water Rights, and were the primary source of information that the Division then used to complete Water User’s Claims for the water users to review and sign. Under the bill, no survey would be done in the preliminary stages of the adjudication; rather, the hydrographic survey maps would be prepared late in the process—at the same time that the proposed determination is prepared—using the data from the submitted claims to prepare the maps.

Other significant provisions of the bill include:

• Changing the term “Water User’s Claims” to “Statements of Claim”
• Allowing the Division to accept electronic Statements of Claim
• Providing a mechanism for water users to ask the Division for an extension of time to file their Statements of Claim
• Removing a provision under which a water user could petition the adjudication court for permission to file a late claim
• Providing additional notice and a public meeting regarding unclaimed rights of record, which will occur after claim are due but before a proposed determination is published. Owners of the unclaimed rights of record may object to the list of unclaimed rights (i.e., assert that their rights should be included in the general adjudication), but the claimants will have to demonstrate that their failure to file a timely statement of claim was excused by circumstances beyond their control, mistake, or other justification.

You can read the full text of the bill, as introduced, by clicking here.

S.B. 80: Infrastructure Funding Amendments

Senator Stuart Adams (R–Layton) is sponsoring Senate Bill 80, which proposes that a 1/16% sales tax rate be redirected from the Transportation Fund to the new Water Infrastructure Restricted Account that was created last year.  This sales tax rate was originally destined for water project funding but got diverted to major transportation needs, most of which have now been met.  Now that the state has identified $33 billion in costs for essential water infrastructure need between now and 2060, there is a clear need for these sales tax funds back in the Water Infrastructure Account.

You can read the full text of the bill, as introduced, by clicking here.

S.C.R. 1: Concurrent Resolution Encouraging Universal Metering of Water Systems

Sen. Scott Jenkins (R–Plain City) is sponsoring Senate Concurrent Resolution 1, which was recommended by the Natural Resources, Agriculture, and Environment Interim Committee.  It encourages public water suppliers to implement metering of water on “all retail public and private water systems,” including secondary water systems, because water users tend to voluntarily conserve more water when they know how much water they are actually using.

You can read the full text of the resolution, as introduced, by clicking here.

Utah Alunite Corp. v. Jones

Last week, the Utah Court of Appeals issued a decision in the case of Utah Alunite Corp. v. Jones. The case answers a question regarding what parties may appeal a decision of the Utah Division of Water Rights ("Division") on a water right application.

In 2006, the Iron County Water Conservancy District ("District") filed an application to appropriate water in the Wah Wah Valley. Approximately 300 people filed protests on the application. The Utah School and Institutional Trust Lands Administration ("SITLA") did not file a protest, despite being a major landowner in the valley. The Division did not make a decision on the District's application, choosing instead to delay a decision so that hydrologic data could be gathered.

In 2012, SITLA and its lessee, Utah Alunite Corporation ("UAC"), filed an application to appropriate water in the valley. The District protested SITLA's application, asserting that the District's pending application to appropriate was prior to, and therefore superior to, SITLA's application.

In 2014, the Division issued decisions granting both applications. However, the Division determined that SITLA's application was subject to the District's senior right. SITLA and UAC sought judicial review of both decisions before the district court. The district court concluded that SITLA and UAC could not challenge the Division's decision approving the District's application because SITLA and UAC had not protested the District's application or sought to intervene in the Division's proceeding on the District's application. SITLA and UAC appealed to the Utah Court of Appeals.

The Utah Court of Appeals decision focused on whether SITLA and UAC had standing to appeal the Division's decision approving the District's application. The Court noted that the Utah Water Code provides that a "person aggrieved by an order of the state engineer may obtain judicial review." Under this standard alone, SITLA and UAC would have standing to appeal, because they were adversely affected by the Division's approval of the District's application. However, the Court also noted that the Utah Water Code required that an aggrieved person may seek judicial review only in accordance with the Utah Administrative Procedures Act ("UAPA"). UAPA provides that a "party aggrieved may obtain judicial review." The Court determined that there was a meaningful distinction between an "aggrieved person" and an "aggrieved party," and that a person must meet both requirements in order to appeal a Division order. In other words, the person seeking appeal must both (1) be a person with an actual or potential injury resulting from the order, and (2) have been a party (applicant, protestant, or intervenor) to the Division's proceeding. The Court concluded that although SITLA and UAC were aggrieved persons, they were not aggrieved parties, and therefore they lacked standing to pursue the appeal. Thus, the Court affirmed that SITLA and UAC lacked standing to pursue the appeal, and the dismissal of the case was upheld.

To read the entire opinion of the Utah Court of Appeals, click here.

Public Meeting Concerning the Proposed Determination in the Nibley Park Area

The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the Nibley Park area in Salt Lake County East Division of the Utah Lake / Jordan River Drainage (Area 57, Book 5). The Nibley Park area is from 2700 South to 3300 South and from Main Street to 700 East. The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the Nibley Park area
When: January 12, 2016, 6:00 to 7:00 pm
Where: Department of Natural Resources, Room 1040, 1594 W. North Temple, Salt Lake City
Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 360057298), the State Engineer is authorized and ordered to conduct a general determination of the rights to the use of all water, both surface and underground, within the drainage area of the Nibley Park Subdivision, Salt Lake County East Division, of the Utah Lake and Jordan River drainage in Salt Lake County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the Nibley Park area to survey existing water rights and investigate water user's claims. Representatives from the Division of Water Rights will be available during this time to discuss the adjudication process, review water rights within the area, and answer questions. If individuals cannot attend, but have questions regarding the adjudication process or water rights within the Nibley Park area, please contact Black Bingham at (801)538-7345.
Agenda:
1.  Introduction (Blake Bingham, P.E. - Adjudication Program Manager)
2.  Adjudication Process Presentation
3.  Public Comments & Questions

For more information on the meeting, click here.

Public Meeting Regarding Groundwater in Iron County

The Utah Division of Water Rights has set a public meeting to discuss developing a groundwater management plan for Cedar Valley in Iron County. The following information is from the public meeting notice:

What: Public Meeting
Who: Cedar Valley Water Users
When: January 7, 2016, 6:00 pm
Where: Cedar High School Auditorium, 703 West 600 South, Cedar City
Purpose: The purpose of the meeting is to discuss the process for developing a groundwater management plan for Cedar Valley in Iron County. Personnel from the Division of Water Rights will be available to take all questions and comments provided by the general public and interested parties.
If you are unable to attend the meeting, but would like to provide input, please send your written comments to:
Division of Water Rights
646 North Main St
P.O. Box 506
Cedar City, UT 84721-0506

For more information on the meeting, click here.

Update on General Adjudications

The following article was written by David Hartvigsen, one of my partners 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.

There have been a few developments that water users in Utah should be aware of with respect to ongoing and future court proceedings called General Determinations of Water Rights or General Adjudications in river basins and sub-basins around the state. According to a General Adjudication status report on the Division of Water Rights ("DWR") website, there are currently 13 ongoing General Adjudications; most have been pending for decades, with the one on the Utah Lake/Jordan River drainage basin having been pending since 1936. These General Adjudications evaluate each water right within the basin being adjudicated and result in a decree on each water right which either disallows the water right (for such reasons as non-use) or validates the right with a new set of characteristics/limitations based on a Water Users Claim, a HydrographicSurvey, a Proposed Determination ("PD") from DWR, and any court hearing on objections to the findings in the PD. These newly validated water rights in the adjudication process become "decreed" rights. It is therefore absolutely essential that water users understand and participate in this General Adjudication process or they could potentially lose valuable water rights.

Of the 13 pending General Adjudications, I'm aware of recent activity in: Area 05 near Moab in the Southeastern Colorado River basin; Area 29 in the Bear River basin; and several areas in the Utah Lake/Jordan River basin, including Area 51 near Birdseye and Hobble Creek, Area 53 near Goshen, and Area 57 in the Harmony Park area and the Emigration Creek area. There is likely activity in a few other General Adjudications as well. Finally, there are also two different procedural matters that are being addressed in the Utah Lake/Jordan River General Adjudication and the State Engineer is proposing legislation to streamline all General Adjudications. These procedural and legislative matters should be of interest to all water users, even those in areas outside of the Utah Lake/Jordan River basin.

Legislative Proposal for the 2016 Session

The State Engineer has spearheaded an effort to find ways to both modernize and streamline the General Adjudication process. The results of that effort was recently presented to the Executive Water Rights Task Force. The main feature of the proposal is to get water users involved earlier in the process and to take more responsibility with asserting their water rights in the court proceeding. More specifically, once a water user receives notice that a General Adjudication is under way, the water user will be solely responsible for initiating preparation of a water user claim. DWR staff will assist upon request but will no longer prepare the forms on their own initiative and send them out to water users. Next, if a person or entity with a known water right fails to file a claim within the time specified in the notices, DWR staff will prepare and publish a "List of Unclaimed Rights of Record." This list will give water users one more chance to get their claims of record in the General Adjudication, but the penalty for filing at this stage is that the water user will be filing an objection to a determination that their water right has been abandoned and will need to submit sufficient evidence to overcome that determination. A final key point is that DWR staff will only do the Hydrographic Survey work on claims that have been filed, not on all water uses as has been the prior practice. Please watch for this legislation as it moves forward and get involved if you are either supportive or opposed to this proposal.

Appointment of a Special Master in the Utah Lake/Jordan River General Adjudication

DWR has also been asking the court in the Utah Lake/Jordan River General Adjudication to appoint a Special Master to assist with resolving objections and other specific issues in this long-pending case. The Special Master will be paid by specific appropriations by the Legislature to help speed up resolution of these adjudications. The concept is a good concept. The question is who should be appointed as this Special Master. An ideal candidate would be someone who is familiar with Utah water law, the Utah General Adjudication process, and general civil litigation procedure, but who also does not have any ties or conflicts of interests with water users in the area being adjudicated. We are not sure the ideal person exists and are watching to see who responds to open position notice being sent out by the court. Water users and other interested parties will be given a chance to weigh in on the decision of who to appoint once a pool of individuals is identified. Please watch for information and notices regarding this process as well.

Return Flow Credits for Imported Water
Finally, last year a settlement was reached and a stipulation was entered in the Utah Lake/Jordan River General Adjudication concerning a procedure for public input and protest on new applications for, and changes to existing formulas for, credits given to importers of water into this basin where the return flows migrate to Utah Lake. These credits are then typically used to allow for water stored in Deer Creek Reservoir, and potentially Jordanelle Reservoir, to be diverted directly to Salt Lake Valley for culinary use instead of flowing down the Provo River and into Utah Lake. The first such proposal to be considered under this new process is currently being processed by DWR. It was filed by the Provo River Water Users Association on Water Right No. 55-262. The new process appears to be working well, but this is a very complicated issue that could affect many water users on the Jordan River, so water users that may be affected will want to be watchful for notices regarding such Return Flow Credit proposals.

New Regional Engineer and Enforcement Engineer

There have been a few changes in personnel at the Division of Water Rights. Kerry Carpenter recently retired, leaving a vacancy in the Enforcement Engineer position.  Kurt Vest was appointed as the new Enforcement Engineer.  Mr. Vest was previously the regional engineer for the Southwestern Regional Office.  Nathan Moses has been appointed as the new regional engineer for the Southwestern Regional Office.

Contact information for these individuals and other Division of Water Rights personnel can be found by clicking here.

Public Meeting Regarding Appropriation Policies Near Arches National Park

The Utah Division of Water Rights has set a public meeting to discuss updating the water right appropriation policy in Water Right Area 01 near Arches National Park in Grand County. The following information is from the public meeting notice:

What: Public Meeting
Who: Water users near Arches National Park, Grand County
When: October 15, 2015, 4:00 pm
Where: Moab City Center, 217 East Center Street, Moab
Purpose: The State of Utah recently entered into an agreement with the United States of America for a federal reserved water right for Arches National Park. As a part of the agreement a Protection Zone was established. The purpose of this meeting is to discuss the adoption of this Protection Zone as policy for Water Right Area 01. Personnel from the Division of Water Rights will be available to take all questions and comments provided by the general public and interested parties.
If you are unable to attend the meeting, but would like to provide input, please send your written comments to:
Division of Water Rights
319 N Carbonville Road Suite B
P.O. Box 718
Price, UT 84501
Agenda for October 15, 2015 Public Meeting
1. Introduction - Kent Jones, State Engineer
2. Protection Zone Policy - James Greer, Assistant State Engineer - Technical Services
3. Public questions/comments

For more information on the meeting, click here.

Public Meeting Concerning the Proposed Determination in the Harmony Park East Area

The Utah Division of Water Rights has set a public meeting to discuss the proposed determination of water rights within the Harmony Park East Subdivision, Salt Lake County East Division of Utah Lake/Jordan River Drainage Area (Area No. 57, Book 4).  The Harmony Park East Subdivision is the area between 3300 South and 3900 South, and between Main Street and 700 East, in Salt Lake County. The following information is from the public meeting notice:

What: Public Meeting

Who: Water Users within the Harmony Park East Area

When: September 16, 2015, 6:00 pm to 7:00 pm

Where: Granite Connection High School Auditorium, 501 East 3900 South, Salt Lake City

Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 360057298), the State Engineer is authorized and ordered to conduct a general determination of the rights to the use of all water, both surface and underground, within the drainage area of the Harmony Park East Subdivision, Salt Lake County East Division, of the Utah Lake and Jordan River Drainage Area in Salt Lake County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the Harmony Park East area to survey existing water use, contact water users, and review the water rights of record.  In light of this work, the public is invited to a Public Meeting.  Representatives from the Division of Water Rights will be available during this time to discuss the adjudication process, review water rights within the area, and answer questions. If individuals cannot attend, but have questions regarding the adjudication process or water rights within the Harmony Park East Area; please contact Blake Bingham at (801) 538-7345.

Agenda:

1. Introduction - Blake Bingham, P.E., Adjudication Program Manager

2. Adjudication process presentation

3. Public comments and questions

For more information on the meeting, click here.

Proposed Appointment of a Special Master in General Adjudication

Recently, the Utah Division of Water Rights has asked the Third District Court to appoint a Special Master in the Utah Lake and Jordan River General Adjudication.  A Special Master is a person appointed by the court to take specific action on behalf of the court.  In the General Adjudication, the Division is asking to have a Special Master assist with resolving objections filed on the various Proposed Determinations in the General Adjudication.  The appointment of a Special Master in a General Adjudication is something that is new in Utah.  The proposal to appoint a Special Master is currently being advertised, and interested parties can file an opposition with the court.

Additional information, including the court pleadings, regarding the proposal to appoint a Special Master are available here.  The notice that was published is included below.

NOTICE TO WATER USERS OF MOTION TO APPOINT A MASTER IN THE UTAH LAKE AND JORDAN RIVER GENERAL DETERMINATION OF WATER RIGHTS.
A motion to appoint a master pursuant to Utah Rule of Civil Procedure 53 has been filed: IN THE MATTER OF THE GENERAL DETERMINATION OF RIGHTS TO THE USE OF WATER, BOTH SURFACE AND UNDERGROUND, WITHIN THE DRAINAGE AREA OF THE UTAH LAKE AND JORDAN RIVER IN UTAH, SALT LAKE, DAVIS, SUMMIT, WASATCH, SANPETE, AND JUAB COUNTIES IN UTAH. This action is pending in the Third Judicial District in and for Salt Lake County, State of Utah, Civil No. 360057298. The Division of Water Rights (State Engineer’s Office) has filed a motion to appoint a master pursuant to Utah Rule of Civil Procedure 53. Parties may obtain a copy of the motion and associated documents at www.waterrights.utah.gov/miscinfo/currentIssues.asp or on file with the 3rd District Court. Opposing memoranda are due within 30 days of the last date of publication of the notice; replies to opposing memoranda are due within 30 days of the final date for filing opposing memoranda. The Court has set a hearing on the motion on October 19, 2015 at 1:30 PM located at 450 South State Street Salt Lake City, UT 84114-1860, in room S32. For more information please contact the Utah Division of Water Rights at 801-538-7240 or the Attorney General’s Office at 801-538-7227.

Conversion of Shares into Acre-Feet

People often ask me how to convert shares into acre-feet.  Unfortunately, the answer is not as easy as one might expect.

At the outset, please note that this post focuses on water shares, not water rights.  To understand the distinction, visit here and here.  Water rights should already have acre-foot quantities associated with them--with the exception of certain circumstances, including undefined sole supply amounts for a water right.

The amount of water associated with a share in a water company (irrigation company, ditch company, canal company, etc.) is not consistent between companies.  As an example, there is one water company that I know of where 1 share is equal to 1/10th of an acre-foot of water, and there is another water company that I know of where 1 share is equal to 6 acre-feet of water.  The determination of how many acre-feet are associated with each share in a water company is, for the most part, a function of three components: (1) how many total acre-feet the water company is entitled to under its water rights, leases, contracts, etc.; (2) how many shares have been issued in the water company; and (3) how much water the water company's source(s) are able to produce.

As an example, suppose that a water company's water rights, in total, allow for the diversion of 1,000 acre-feet of water from a river for the irrigation of 250 acres (assuming the water company is in an area of the state where the duty is 4 acre-feet per acre).  Further suppose that the water company has issued 250 shares of stock.  On paper, each share would entitle the owner to irrigate 1 acre with 4 acre-feet of water.  Thus, each share represents 4 acre-feet of water.  But if it is a drought year and the river is running low, each shareholder may not actually receive 4 acre-feet of water per share.

Some water companies know how many acre-feet are represented by each share, usually because of shareholder change applications or other applications that have previously been filed with the Utah Division of Water Rights.  In fact, the Division keeps a list of water companies, and the list includes a spot for information about the number of acre-feet per share.  Some companies have this information (see example below), but most do not.  The reality is that many water companies will not know how many acre-feet are represented by each share, and a determination of this number could take some investigation, research, and calculation.