2014 Legislature: Canal Safety Amendments

Representative Johnny Anderson has introduced House Bill 370 (HB 370), entitled "Canal Safety Amendments."  The bill would require the State Engineer to make and maintain an inventory list of all open canal/ditch systems in the state.  For each system, the list would include the alignment of the canals and ditches, the contact information for the owner, the maximum flow of the system, whether the system is used for storm water management, and whether a management plan has been adopted for the system.  The bill would allow the State Engineer to contract with the Utah Association of Conservation Districts to perform these duties, and would require the State Engineer to contract with the Association to provide technical support to canal owners who are adopting a management plan.  The bill would also modify the definition of a "water conveyance facility."  Current law exempts fully piped pressurized systems from the definition, but this bill would also exempt fully piped systems that are not pressurized.

To read a full copy of the bill, as amended, click here.

2014 Legislature: Water Conveyance Facilities Amendments

Representative Carol Moss has introduced House Bill 298 (HB 298), entitled "Water Conveyance Facilities Amendments." This bill makes only one change to existing canal safety laws, which is that it exempts ditch systems that carry less than 15 cubic feet per second (cfs) from the canal safety requirements.

To read the full text of the bill, as introduced, click here.

2014 Legislative Preview: Public Trust

Representative Kay McIff has introduced House Bill 233 (H.B. 233), entitled "Public Trust Obligations and Water Rights Protections."  This bill seeks to define the scope and limits of the public trust doctrine in Utah. The bill also clarifies that a water right is a property right that is protected by the Utah Constitution, and cannot be taken for public use without just compensation.

This bill is nearly identical to HB 68 that Representative McIff ran in 2013.

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

2014 Legislative Preview: County Recorder Water Index

Representative Curt Webb will introduce House Bill 29 (HB 29), entitled "County Recorder Index Amendments."  The bill only makes one change to the statute defining the duties of the county recorders: it requires the county recorders to keep an index of water right numbers that are included in deeds after May 13, 2014.

To read the full text of the bill, as introduced, click here.

Update: This bill was passed on February 24, 2014, and will now go to Governor Herbert for signature.

2014 Legislative Preview: Canal Safety Act

Senator Gene Davis will introduce Senate Bill 114 (SB 114), entitled "Canal Safety Act."  The bill seeks to enact several new statutes to govern canal safety issues.  The bill begins by defining a canal as a water conveyance system that conveys a flow of more than 10 cfs of water.  The bill would require all canal owners to conduct an assessment of the condition of each canal before January 1, 2015, and at least once every five years thereafter.  The canal owner must determine whether each section of the canal is high risk, medium risk, or low risk; determine if any repairs or improvements are necessary to reduce the risk of canal failure; and report the findings to the Utah Division of Water Rights.  The Division would then maintain a "canal action list" to include all canals that are high risk and/or require repairs or improvements.  If a canal is on the canal action list, the canal owner must prepare a remediation plan, which must be approved by the Division of Water Rights and the Division of Water Resources.  The canal owner cannot receive state funding for a project related to the canal unless they have an approved remediation plan.

To read the full text of the bill, as introduced, click here.

2014 Legislative Preview: Water and Irrigation Amendments

Senator Margaret Dayton will introduce Senate Bill 17 (SB 17), entitled "Water and Irrigation Amendments."  The bill is a "clean-up bill" that makes several small changes to the Utah Water Code.  First, the bill would expand the State Engineer's enforcement powers by allowing the State Engineer to pursue an enforcement action against a person who violates the law requiring a stream alteration permit for work done in a natural streambed.  Second, the bill would require assignments of unperfected water rights to be recorded with the proper county recorder instead of just being filed with the Division of Water Rights.  Third, the bill seeks to clarify the criminal penalties for well drillers operating without a current license.  Fourth, the bill proposes changes to the statute governing stream alteration permits, including giving the State Engineer authority to issue orders for repair and restoration of streambeds altered without a permit.  Finally, the bill proposes technical changes to the statute governing the State Engineer's duties to divide and distribute water.

To read the full text of SB 17, as introduced, click here.

Update: This bill was passed on February 13, 2014, and will now go to Governor Herbert for signature.

2014 Legislative Preview: Public Water Access

Representative Dixon M. Pitcher will introduce House Bill 37 (HB 37) during the 2014 legislative session.  The bill seeks to make sweeping changes to the Utah Public Water Access Act.  Under the bill, "public access water" would be defined as a stream that in its natural state during ordinary high water is capable of (1) floating cut lumber six feet in length and six inches in diameter; (2) floating a commercial commodity; or (3) being navigated by a watercraft propelled by oar, paddle, or motor.  The bill would completely repeal several code sections of the current Act and replace them with new code sections.  These new statutes would provide that public access water at or below the ordinary high water mark would be open to public use for lawful activities that utilize the water, including boating, fishing, swimming, and wading.  The bill would limit members of the public from crossing private property to get to the public access water, but would allow the public reasonable portage across private property to avoid obstructions in the waterway.  The bill would also allow the property owner to fence across the waterway, so long as the fence complies with law and does not create an unreasonably dangerous condition to those using the waterway, and provided that the property owner allow public users to use a ladder, gate, or other mechanism to portage around or over the fence.

To read the full text of HB 37, as introduced, click here.

2014 Legislative Preview: Shareholders' Rights Legislation

The following article was written by Craig Smith, 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.

The very controversial water issue, the rights of shareholders of nonprofit water companies, will be back before the Utah Legislature in 2014. The 2013 legislation sparked a lively debate during the session which ended in a deadlock with the House approving the legislation and Senate not acting as the session ended. In legislative parlance, the 2013 shareholder rights legislation "died on the board." Rep. Kay McIff (R-Richfield) has now prepared a new version of his 2013 shareholder rights legislation and plans or introducing it during the 2014 legislation session.

Historically, nonprofit water companies came into being when individual farmers determined that they needed to band together to construct the water diversion and distribution facilities necessary to irrigate their farms. For decades, this commonality of interest (e.g., common facilities to deliver water for a common use) bound these companies together. After construction, these facilities needed to be operated and maintained. The water rights themselves were put in the name of the company and individual ownership of and right to use the water was represented by shares of stock in the nonprofit mutual water company.

As irrigated fields began to make way for subdivisions, this commonality of interest began to wane. Shareholders who sold their farms to developers sold their water shares as well. Cities began to either require dedication of or purchased shares and then filed change applications to move irrigation water to municipal sources and uses. In 1993, this practice led to the Utah Supreme Court ruling in East Jordan Irrigation Company v Morgan, commonly known as "the East Jordan Case."

The Utah Supreme Court ruled that shareholders of mutual irrigation companies could no longer file change applications based on their shares. The Supreme Court reversed the long standing practice of the State Engineer and held that only the company, as the holder of the water right, could file an application to change the point of diversion, place of use, nature of use or season of use of a water right.

Although the East Jordan Case stated that companies needed to reasonably consider requests from shareholders to file a change application, "reasonable" wasn't defined and some companies began to either refuse to consider change application requests or to impose conditions such as requiring approval of a super majority of all other shareholders.   In 2002, after a two year effort, then Senate President Leonard Blackham (R-Sanpete) obtained passage of what is now found in Utah Code section 73-3-3.5, the first legislation to define shareholder rights in the context of a shareholder initiated change application. While many argue that Section 73-3-3.5 works well, others disagree.

           

Rep. McIff's current legislation seeks to provide additional rights and protections for shareholders. According to Rep. McIff, who is a lawyer and former judge, his legislation has ten objectives:

1.  Retain the historical qualification that "a person entitled to use of water" may file a change application.

2.  Require a shareholder change application be submitted to the water company for its response before filing with the state engineer.

3.  Require a water company response within 60 days so that all the issues are on the table as early as possible.

4.  Eliminate stonewalling by the water company and the necessity of front end litigation by a shareholder just to obtain the right to file the change application.

5.  Maximize the opportunity for dispute resolution, including relying on mediation to resolve or refine the issues before administrative review of litigation.

6.  Allow either the water company or the shareholder to seek advance court resolution of legal issues (e.g., corporate issues) not within the purview of the state engineer.

7.  Foster the state engineer's gate-keeping role and facilitate getting the water issues before the state engineer as soon as practical.

8.  Provide more practical compensation options for water companies when water is removed from a delivery system, and equalize the remedies if either side is unreasonable.

9.  Allow a shareholder to elect whether or not to participate in the sale of water or an underlying water right proposed by the water company.

10.  Continue to allow denovo judicial review of the state engineer's final decision.

Whether or not Rep McIff's legislation or some derivation thereof passes in 2014 is anyone's guess, but with the continued conversion of farms to subdivisions, this issue will not soon fade away.

To read the full text of the proposed legislation (House Bill 49), click here.
Update: First Substitute House Bill 49 has been introduced. To see the differences between the original bill and the first substitute bill, click here.