2019 Legislative Preview

Today is the opening day of the Utah Legislature. Below is a summary of water-related legislation that will be considered during the 2019 legislative session.

HB 12 – Instream Flow Water Right Amendments

Rep. Timothy D. Hawkes
House Bill 12 would remove the current “sunset provision” the Legislature enacted when it created Utah Code section 73-3-30(3), which authorized fishing groups to file fixed time change applications to provide instream flows for the Bonneville cutthroat, the Colorado River cutthroat, and the Yellowstone cutthroat. The program is currently set to expire on December 31, 2019.

HB 31 – Water Supply and Surplus Water Amendments

Rep. Kim F. Coleman
House Bill 31 addresses the how municipalities are to provide water service within and beyond its municipal boundaries. The municipality must define, by ordinance, the municipality’s designated water service area, which may be an area that extends beyond the municipality’s boundaries. The municipality must adopt, by ordinance, reasonable water rates for retail customers within the area, and must provide water service to its retail customers within the designated water service area in a manner consistent with the principles of equal protection. A municipality can establish different rates for different classifications of retail customers, if the rates and classifications have a reasonable basis. If a municipality provides water to a retail customer outside of the municipality’s boundary, the municipality must create and maintain a map showing the areas outside of the municipality’s designated water service area where the municipality provides water service to a retail customer. The municipality must provide the map to the State Engineer and, if the municipality has more than 500 retail customers, post the map on the municipality’s website. If more than 10% of a large municipality’s retail customers are outside the municipal boundaries, the municipality must establish an advisory board to make recommendations regarding water rights, water projects, and water service standards. If the municipality supplies water outside of its designated water service area, it must do so only by contract that includes terms for termination, and the municipality must notify the Division of Drinking Water of the names and contact information for each person in these contracts. The bill would take effect in January 2021, provided that the constitutional amendments under HJR 1 are approved by the Legislature and by voters.

HB 125 – Quantity Impairment Modifications

Rep. Carl R. Albrecht
House Bill 125 makes one modification to Utah Code section73-3-8 regarding quantity impairment determinations in change application proceedings. Currently, the statute provides that there is a rebuttable presumption of quantity impairment if, for a period of seven consecutive years, a water right has not been diverted from its approved point of diversion and beneficially used at its approved place of use. The bill would change the “and” to “or.”

HB 143 – Water Conservation Plan Amendment

Rep. Suzanne Harrison
House Bill 143 proposes to make several amendments to UtahCode section 73-10-32 regarding water conservation plans. The proposal would require that water conservation plans prepared by water districts and retail water providers must include an evaluation of the specific measures that would have to be enacted to reduce water use to 175 gallons per capita per day or less, and how much it would cost to do so. The plans would also have to an analysis of how much it would cost in operation costs, maintenance costs, treatments costs, delivery costs, etc. to not reduce water use to 175 gallons per capita per day.

HJR 1 – Proposal to Amend Utah Constitution – Municipal Water Resources

Rep. Keven J. Stratton
House Joint Resolution 1 proposes an amendment to Article XI, Section 6 of the Utah Constitution. The proposal would maintain the prohibition that a municipality cannot lease, sell, alienate, or dispose of any of its water rights or water supply sources. A municipality would be allowed to designate, by ordinance, the geographic limits of its designated water service area, which could be an area that extends beyond its municipal boundaries. A municipality will be allowed to supply water to retail customers outside of its municipal boundaries but within its designated water service area, as well as outside of its designated water service area through surplus water agreements. Municipalities are also allowed to exchange water rights or water supply sources for other water rights or water supply sources. If HJR 1 is passed by the Legislature, the proposed amendment will be submitted to Utah voters at the next general election.

HJR 5 – Joint Resolution Approving Notes to Water Rights Addenda

Rep. Derrin R. Owens
House Joint Resolution 5 proposes edits to the water rightsdeed addenda. The proposed edits add clarification that a properly recorded water rights addendum can be processed as though it were a Report of Conveyance. If, however, the water rights addendum cannot be processed as a Report of Conveyance (e.g., if signatures are missing from the addendum, if the addendum is incorrectly filled out, or if the grantor listed on the addendum is not the recognized water right owner on the Division of Water Rights’ database), then the water right owner will need to file a Report of Conveyance in order to update title with the Division.
 
SB 17 – Extraterritorial Jurisdiction Amendments
Sen. Ralph Okerlund
Senate Bill 17 amends Utah Code section 10-8-15 regarding a municipality’s extraterritorial jurisdiction over waterworks and water sources. The bill maintains a municipality’s right to construct waterworks inside and outside of the municipality’s boundaries, and also maintains a municipality’s jurisdiction over its waterworks as well as streams and other water sources for a distance of 15 miles about the water source and 300 feet on each side of a stream. First class cities (which are cities with a population exceeding 100,000 residents) continue to have jurisdiction over the entire watershed, but the jurisdiction is limited to the county in which the city is located, unless there is an agreement between the first class city and the municipalities and counties that have jurisdiction over the area. The bill also requires additional notice and hearing requirements if municipalities seek to adopt ordinances under their extraterritorial jurisdiction power. Such ordinances cannot conflict with existing federal or state statutes and rules.

SB 52 – Secondary Water Metering Requirements

Sen. Jacob L. Anderegg
Senate Bill 52 enacts deadlines for metering secondary water use, which is defined as pressurized non-culinary and non-agricultural water use for the irrigation of landscaping and gardens. It would require secondary water suppliers to have all new service beginning after July 1, 2019 be metered. All existing connections will need to be metered by 2030. It would also require secondary water suppliers to report water use and other information to the Division of Water Rights before March 31 of each year and to provide monthly readings and educational material to its customers, among other things. To help offset the costs associated with installing meters, the bill would direct the Board of Water Resources to make $10 million available each year (as funded by the Legislature) in the form of loans and grants for up to 50% of the total cost (grants are limited to 16.5% of the total cost). Finally, a water user would not be able to use culinary water if secondary water is available to irrigate landscaping and gardens even though the culinary water rates may be lower.

SB 66 – Dam Safety Amendments

Sen. Scott D. Sandall
Senate Bill 66 makes minor wording changes to Utah dam safety statutes regarding the State Engineer’s regulation of dam safety. The purpose of the bill is to clarify to that the State Engineer’s responsibility is to ensure that dams are safe so they do not fail and cause damage, but that it is not the State Engineer’s responsibility to govern use and safety of the impounded reservoirs for boating, fishing, and other recreational use.

SJR 1 – Joint Resolution Supporting the Study of Water Banking in Utah

Sen. Jani Iwamoto
Senate Joint Resolution 1 expresses support for a multi-stakeholder group that has been working for over a year to develop a water banking program for Utah in accordance with related recommendations from the Governor’s 2017 Recommended Water Strategy. The resolution requests draft water banking legislation for the Legislature to consider during the 2020 general session that would: (1) recognize that the majority of water rights in Utah are agricultural in nature; (2) incentivize agricultural water users to participate in water banking; (3) protect against abandonment and forfeiture for water rights placed within a water bank; (4) minimize the potential for water right impairment; and (5) ensure that water placed within a water bank may be leased or otherwise used for any lawful purpose.

Salt Lake City Corp. v. Haik

The Utah Court of Appeal recently issued its decision in the case of Salt Lake City Corporation v. Haik. This case is a continuation of a long-standing water dispute between Salt Lake City and Mark Haik. (To read about prior cases in this dispute, click here, here, and here.)

Mark Haik and Pearl Raty are two of six owners of a portion of a water right from Little Cottonwood Creek that was decreed in the 1910 Morse Decree. In 1934, the then-owners of the water right entered into an agreement with Salt Lake City under which the City was granted use of most of the water right during the non-irrigation season. In 1950, a portion of the water right (represented by Water Right No. 57-7800) was moved from the Creek to a well through a change application that was certificated. In 2000, the then-owner of WR 57-7800 filed a change application to return the water back to the Creek. After this change application was approved, WR 57-7800 was conveyed to the six owners, who each filed a change application to move the water to be used for cabins at Albion Basin in Little Cottonwood Canyon. Two of the change applications were approved, but Haik's and Raty's change applications remained unapproved.

This lawsuit was initiated by the City as a judicial review of the two approved change applications, but the City also brought claims challenging the nature and validity of Haik's and Raty's water rights. Haty brought counterclaims against the City, asserting that the City was obligated to serve water to her property in Little Cottonwood Canyon. During the proceedings, the City acquired the rights associated with the two approved change applications, thereby leaving only the claims and counterclaims involving Haik and Raty. Ultimately, the district court concluded that Haik's and Raty's water rights had been forfeited due to nonuse and that the City did not have obligations to serve water to Ray's parcel. Accordingly, the district court issued a judgment in favor of the City. Haik and Raty appealed to the Utah Court of Appeals and argued that the district court had made several errors.

First, Haik and Raty asserted that the City lacked standing to bring its claims. The Court disagreed and determined that the City met the "traditional test" for standing because both parties had rights to draw water from the same source (Little Cottonwood Creek), and therefore was impacted by Haik and Raty's rights to divert and use water from the Creek.

Second, Haik and Raty asserted that the district court lacked subject matter jurisdiction because the City had not exhausted its administrative remedies. Haik and Raty argued that the City could not bring an action against them until the Division of Water Rights issued decision on their pending change applications. The Court noted that the City was not appealing a decision of the Division relative to the change applications; rather, the City was bringing a claim asserting forfeiture of the underlying water right -- which is a determination that can only be made by a court, and not by the Division. Thus, the Court determined that the district court had subject matter jurisdiction over the case.

Third, Haik and Raty argued that the district court had incorrectly determined that their water rights had been forfeited due to nonuse of more than seven years. Haik and Raty had presented evidence that their water had been diverted and used by successors to the original water right, but the Court held that this evidence was insufficient and did not meet the statutory requirements for beneficial use because Haik and Raty did not have agreements in place for other people to use the water. The City, on the other hand, had presented clear evidence that Haik and Ray had not made any beneficial use of the water since 2003. The Court also determined that the district court had applied the correct legal analysis for total forfeiture and that the City's forfeiture claims were not barred by the applicable statute of limitations. Thus, the Court affirmed the total forfeiture of Haik's and Raty's water rights.

Fourth, Raty asserted that the district court had incorrectly determined that the City did not have an obligation to serve water to Raty's parcel in Little Cottonwood Canyon. Raty asserted that the City had obligations to serve water to her property based on Article XI, Section 6 of the Utah Constitution, which provides that municipalities must preserve, maintain, and operate its water resources to serve its inhabitants. But the Court determined that Raty was not an inhabitant of the City because here property is located outside of the City's municipal boundaries. Raty also asserted that the City had denied her due process. But the Court determined that Raty did not have a protectable property interest, but rather had nothing more than a unilateral expectation of water service. Raty also asserted an equal protection claim under Article I, Section 24 of the Utah Constitution. The Court, however, determined that the City's decision to not serve her property was a proper exercise of its permissive right to serve water to people outside of its boundaries. Finally, Raty asserted that the City should be regulated by the Utah Public Service Commission. The Court disagreed, and noted that the Utah Constitution prohibits the Commission from regulating municipalities.

Based on these determinations, the Utah Court of Appeals affirmed the district court's decision on all points. The result is that Haik's and Raty's water rights are forfeited in their entirety, and the City is not obligated to provide water service to Raty's parcel in the Albion Basin.

To read the full text of the opinion, click here.

New Policy Regarding Domestic Duty Considerations

On December 28, 2018, the State Engineer issued a new policy regarding the amount of water required for domestic (culinary) use. Historically, the Division of Water Rights has used a "duty" of 0.45 acre-feet per residence per year, which is based on an estimated 400 gallons per day. Recent studies have shown that due to conservation efforts, water efficient appliances, and other considerations, Utah households only use about 70 gallons per person per day. Thus, a home with four people will only use about 280 gallons per day, or 0.314 acre-feet per year.

The State Engineer notes that 0.45 acre-feet per residential connection is still a safe number to use, and it is the number that the Division will continue to use for domestic use if there is no evidence to suggest otherwise. However, the Division "will consider reduced amounts of water required per connection in applications filed if the projected usage rate numbers are based on scientific evaluations and the water used is measured and reported to the Division of Water Rights through the Water Use Program." The policy does not provide additional explanation regarding what evidence and "scientific evaluations" will be sufficient to convince the Division to depart from the standard requirement of 0.45 acre-feet per residential connection.

The policy also notes that part-time residences (such as cabins) may only require 0.16 acre-feet per year or less, which is a decrease from the current requirement of 0.25 acre-feet per year. The same considerations outlined above would apply in getting the Division to approve part-time residences with a diversion limit of less than 0.25 acre-feet per connection.

To read the full policy, click here.

New Policy Regarding Muncipal Use Water Rights

On December 28, 2018, the State Engineer issued a new policy for extending the list of those allowed to hold municipal water rights. This new policy is an expansion of the State Engineer's policy on municipal use water rights issued in December 2010.

Prior to 2010, only public entities, such as cities, towns, and districts, could hold municipal water rights. The 2010 policy extended municipal use rights to "public water suppliers," as defined in Utah Code section 73-1-4. Public water suppliers are generally larger water providers that serve more than 100 connections or 200 residents on a year-round basis. The new policy extends municipal use rights to "public water systems," which are smaller water providers that serve at least 15 connections or 25 individuals for a minimum of 60 days each year.

If public water systems wish to have municipal use water rights, they will need to file change applications on their water rights to convert them to municipal use. Additionally, all municipal water use will have to be metered and reported to the Division's Water Use Program.

It is important to note that even though the smaller "public water systems" will be allowed to hold municipal use water rights, they are still not qualified as "public water suppliers" and will therefore not be entitled to the special protections provided to public water suppliers under Utah Code sections 73-1-4 and 73-3-12.

To read the full policy, click here.

New Policy Regarding Depletion Limitations on Certificates

On December 28, 2018, the State Engineer issued a new policy regarding depletion limitations on certificates. The policy reiterates that when a new certificate is issued for a newly appropriated water right or for a change application, the certificate sets limitations for diversion and depletion amounts. Once the depletion limits are set through a certificate, the depletion limits cannot revert to their prior (and higher) amounts.

Consider the following example. A landowner has an irrigation water right that allows him to divert 1 acre-foot to irrigate 0.25 acres. This water right has a depletion limit of 0.5 acre-feet, based on a 50% depletion rate for irrigation in the area. The landowner files a change application to allow the water to be used for the domestic use of 1 home (0.45 acre-feet of diversion) and irrigation of 0.1375 acres (0.55 acre-feet of diversion). The diversion limit would remain 1 acre-foot, but the depletion limit would be reduced from 0.5 acre-feet to 0.365 acre-feet ((0.45 acre-feet of domestic use x 20% depletion rate) + (0.55 acre-feet of irrigation use x 50% depletion rate)). The change application is then approved and certificated. Later, the home burns down, and the landowner files a new change application to revert the water right back to irrigation. The new, lower depletion rate will limit the amount of irrigation. In other words, the landowner will no longer be able to divert 1 acre-foot to irrigate 0.25 acres, but will only be able to irrigate 0.1825 acres with a diversion limit of 0.73 acre-feet and a depletion limit of 0.365 acre-feet.

To read the full policy, click here.

New Policy Regarding Corrected Certificates

On December 28, 2018, the State Engineer issued a new policy about issuing corrected certificates. Certificates are issued by the Division of Water Right to complete the process of appropriating a new water right or changing the use of a water right through a Change Application. In the past, the Division has treated the certificates as "set in stone." As a result, when there was a clear error in the proof or certificate process, it has proven challenging to get the Division to correct the errors. This new policy is meant to address such circumstances.

The State Engineer emphasizes that the goal and primary effort is, and will continue to be, to issue certificates carefully and accurately. However, the State Engineer acknowledges, and provides examples of, situations where errors have occurred in the certificate process. The State Engineer notes that the Division is not obligated under statute to reissue certificates based on errors and omissions, but that "it seems the appropriate thing to do to reflect the actual beneficial use of water." Although this policy appears to give considerable latitude to Division staff to correct erroneous certificates, the State Engineer does provide some guidelines:

• Before a certificate is corrected, the Division may require the applicant to prepare and submit a revised proof.
• A corrected certificate should only be issued to reflect the actual beneficial uses, places of use, and points of diversion that existed at the time of proof, provided that these uses were consistent with the approved application that was being certificated.
• Corrections should only occur on a showing of clear error.
• Because certificates are prima facie evidence of a right, corrected certificates are not preferred and may lead to problems.

To read the full policy, click here.

New Policy on Beaver Dam Analogue Construction

The State Engineer has issued a new policy regarding the construction of beaver dam analogues (BDAs), which are small, man-made impoundments of water on natural streams. Proponents assert that BDAs enhance stream channels and streamflows, diminish erosion, increase the health of riparian zones, prevent fire damage during wildfires, and help restore damaged streams in wildfire burn areas. Opponents assert that BDAs impound water belonging to downstream water users, increase evaporation and evapotranspiration of the water, and diminish the water flowing downstream to satisfy water right holders.

Based on these considerations and concerns, the State Engineer issued a policy of December 28, 2018, with respect to BDA construction. The following are some of the key points in the new policy:

• Any BDA construction will require that a Stream Alteration Permit is filed and approved by the Division of Water Rights.
• During the Permit review process, the regional engineer will make a determination if any water rights will be impacted by the BDA.
• If water rights will be impacted, the applicant will have to compensate downstream uses for the impairment. It is contemplated that this will be accomplished by the applicant acquiring a water right and filing a Temporary Change Application on the water right to cover the anticipated impacts. It is assumed that the impacts of the BDA to the water system will stabilize during the one year that the Temporary Change Application is in place.
• If no water rights will be impacted, the only approval required from the Division of Water Rights is the Stream Alteration Permit.
• In emergency situations (e.g., in areas affected by wildfires where it is critical to stabilize streams and help diminish debris flows), no water right will be required. The only approval required from the Division of Water Rights will be the Stream Alteration Permit.

To read the full policy, click here.