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.