Is It Illegal to Harvest Rainwater in Utah?

Collecting and using rainwater has become a hot topic in Utah during the past few months. The issue first made news headlines in August 2008 when a car dealership came under scrutiny of the Utah Division of Water Rights for collecting rainwater from the roof of the dealership’s building, storing the water in a cistern, and then using the water in a car wash. The Division informed the dealership that it needed a water right in order to divert, store, and use the rainwater. This story stirred up lots of curiosity and controversy, with many people (including state legislators) questioning why individuals should not be allowed collect and use rainwater.

During the 2009 legislative session, two bills were introduced that addressed the issue of rainwater harvesting. The first bill was Senate Bill 58, sponsored by Senator Scott McCoy. Under this bill, public water suppliers could allow individuals to capture and beneficially use precipitation under the public water supplier’s approved exchange application. The second bill was Senate Bill 128, sponsored by Senator Scott Jenkins. Under this bill, a person would be permitted to capture and store precipitation in an underground storage container with a maximum capacity of 2,500 gallons. This captured precipitation could be beneficially used without having to obtain a water right or go through the appropriation process.

Both bills passed the Senate, but were not voted on by the House. It is likely that one or both bills will be presented during the 2010 legislative session.

The Division of Water Rights has also prepared a response to the question of whether harvesting rainwater is illegal in Utah. In sum, the Division’s position is that if rainwater is merely controlled or directed (such as with rain gutters and drain piping), then a water right is not needed. However, if rainwater is stored and then later used for some other purpose rather than being released back into the drainage system, then a water right is needed.

To read the text of Utah Bill 58, click here.

To read the text of Utah Bill 128, click here.

New Regional Engineer

On May 19, 2009, the Utah Division of Water Rights announced that Teresa Wilhelmsen will be the new Regional Engineer of the Utah Lake/Jordan River Area. She replaces John Mann, who was appointed the Assistant State Engineer - Applications and Records in April.

For a list of contact information for the regional offices, click here.

Can an Irrigation Company Charge a Shareholder for Copies of Company Records?

Most irrigation companies and water companies are nonprofit corporations, and are therefore subject to the Utah Revised Nonprofit Corporation Act. Under the Act, a nonprofit corporation may charge a reasonable fee to cover the costs of labor and material for copies of any documents provided to a shareholder. The fee may not exceed the estimated cost of production and reproduction of the records.

There is one caveat to the fee rule. If the corporation receives a shareholder’s written request to obtain information regarding the corporation’s assets and liabilities, the corporation must, within 15 days after receiving the request, mail the shareholder a copy the corporation’s most recent annual financial statements and the corporation’s most recently published financial statements. The corporation cannot charge the shareholder for the cost of copying or mailing the financial statements.

To view the Utah Nonprofit Corporation Act, click here.

Does a Shareholder in an Irrigation Company Have Rights to View Company Records?

Most irrigation companies and water companies are nonprofit corporations, and are therefore subject to the Utah Revised Nonprofit Corporation Act.

Under the Act, there are certain records that a nonprofit corporation is required to keep copies of at the nonprofit corporation’s principal office. A member has an absolute right of access to these records during regular business hours at the nonprofit corporation’s principal office, if the member gives the nonprofit corporation written demand at least five business days in advance. These records include:

(a) the articles of incorporation;
(b) the bylaws;
(c) resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members;
(d) the minutes of all members' meetings for a period of three years;
(e) records of all action taken by members without a meeting, for a period of three years;
(f) all written communications to members generally as members for a period of three years;
(g) a list of the names and business or home addresses of the current directors and officers;
(h) a copy of the most recent annual report delivered to the Division of Corporations; and
(i) all financial statements prepared for periods ending during the last three years.

In addition to a member’s right to inspect and copy the records mentioned above, a member is entitled to inspect and copy any of the other records of the nonprofit corporation if certain conditions are met. These conditions are (1) the inspection and copying must occur during regular business hours; (2) the inspection and copying must take place at a reasonable location specified by the nonprofit corporation; (3) the member must give the nonprofit corporation written demand at least five days before the date on which the member wishes to inspect and copy the records; (4) the demand must be made in good faith; (5) the demand must be made for a proper purpose; (6) the demand must describe with reasonable particularity the member’s purpose; (7) the demand must describe with reasonable particularity the records the member desires to inspect; and (8) the records requested must be directly connected with the described purpose. A “proper purpose” is defined as “a purpose reasonably related to the demanding member’s . . . interest as a member.”

To see the full text of the records section of the Utah Revised Nonprofit Corporation Act, click here.