Utah Water Rights - Interview on Real Estate Edge

I was recently interviewed about Utah water rights and water law on the Real Estate Edge podcast. It was a great opportunity to discuss what water attorneys do, some basics of Utah water law, and water policy considerations. 

What Is a Proof Due Notice?

If you own a water right, you may receive a proof due notice from the Utah Division of Water Rights. It is important that you understand what the notice is and what actions you need to take in response to the notice. Failure to take the proper actions could result in the Division lapsing your water right or water application.

When the Division approves an application to appropriate, a change application, or an exchange application, the Division sets a proof due date. This is the deadline by which the water right owner must file "Proof" on the application. For example, if the Division approves an application to divert 1.73 acre-feet from a new well for 1 home, 0.25 acres of irrigation, and 10 head of livestock, then the Proof must be filed to show that the well has been drilled; the home has been constructed; 0.25 acres of lawn/garden are being irrigated; and there are 10 head of livestock on the property. Generally speaking, the Division sets the proof due date to be five years from the date of the approval of the water application.

Sixty days before the proof due date, the Division mails a proof due notice to the water right owner of record. If all of the work is completed, the water right owner can prepare and file the Proof. If, however, additional work is needed to put the water to full beneficial use according to the approved application, the water right owner can file an Extension Request to request that the Division extend the proof due deadline another couple of years. 

It is critical that the water right owner file Proof or an Extension Request with the Division before the proof due date. If neither Proof or an Extension Request is timely filed, the Division will lapse the water application, which will result in the water right owner losing the right to divert and use water as previously approved. 

The Division has recently made it possible to submit Extension Requests online. To access the online Extension Request form, click here. If you need assistance filling out and submitting an Extension Request, feel free to contact me.

Change Application Tracker

Each year, hundreds of change applications are filed with the Utah Division of Water Rights. It generally takes a couple of months for a change application to go through the approval process -- and it can take even longer if protests are filed or if the Division elects to hold a hearing on the change application. Previously, the Division gave very little information about where a change application was at in the approval process. An applicant didn't know if their change application was in the final stages of review and only a few days away from a decision being issued, or if the Division was holding the change application due to some issue discovered during the review process.

Yesterday, the Division unveiled its new Change Application Tracker Tool, which provides a complete list of all unapproved change applications and includes information about where each change application is at in the approval process. The tool also provides information about whether a hearing has been requested or held; a "percent complete" column to give an indication of how far along in the process the change application is; and a comments section regarding issues that the Division has identified, additional information that the Division has requested from the applicant, and other notes about the change application.

This tool provides greater transparency in the process and will be a huge benefit to all water right owners that have pending change applications.

To access the Change Application Tracker Tool, click here.

Online Protest Form

As part of the administrative process for water right applications, the Division of Water Rights publishes notice of the application and gives a 20-day protest period. Any interested party may file a protest on an application during the protest period. Previously, the protests had to be submitted in hard copy via mail or hand-delivery, along with a check for the protest fee.

The Division of Water Rights now allows for protests to be submitted online. Additionally, the protest fee can be paid online using a credit card. The portal for filing protests is located here on the Division's website.

A few items to keep in mind with respect to submitting protests online:
--The online form must be filled out completely and correctly for the protest to be acceptable.
--The protest is not deemed complete until the protest fee has been paid.
--You cannot attach any documents to the online protest. Accordingly, if you have supporting documents to submit with the protest, you must email or mail the documents to the Division and reference the protest number so that the documents can be attached to the protest submitted online.

Water Rights Certification Course

The Rural Water Association of Utah, in conjunction with the Utah Division of Water Rights, offers a two-day water rights training course. The course covers a variety of water right topics, including priority, change applications, water rights vs. water shares, water right title, well regulations, and much more. At the end of the training course, there is a certification exam that you can take.

This course is very informative, and I highly recommend it to anyone wanting to learn about Utah water rights. I took the course when it was first offered in 2014 (in fact, I was the first person to complete the certification exam), and I learned a lot from attending.

The course is being offered on April 6-7, 2017. For more information about the course, click here.

Water Rights Certification Course

The Rural Water Association of Utah, in conjunction with the Utah Division of Water Rights, offers a two-day water rights training course. The course covers a variety of water right topics, including priority, change applications, water rights vs. water shares, water right title, well regulations, and much more. At the end of the training course, there is a certification exam that you can take.

This course is very informative, and I highly recommend it to anyone wanting to learn about Utah water rights. I took the course when it was first offered in 2014 (in fact, I was the first person to complete the certification exam), and I learned a lot from attending.

The course is being offered on April 14-15, 2016. For more information about the course, click here.

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.

Water Right vs. Water Share - revisited

One of the my most visited blog posts is a post I wrote back in 2010 entitled "What Is the Difference Between a Water Right and a Water Share?"  The post explained that the two terms are not interchangeable, and that there are important differences between water rights and water shares.  Understanding the difference between water rights and water shares continues to be the most common confusion I encounter when speaking with people about Utah water.  Accordingly, I have decided to revisit my prior post, and this time provide some visual elements to help with the explanation.

Water rights are rights granted by the State of Utah, through the Utah Division of Water Rights (also known as the State Engineer's Office), that allow a person to use a specified amount of water from a specified source at a specified place for a specified use.  For example, the State may grant you a water right that allows you to divert 1 acre-foot from a well to use on your residential parcel to irrigate 0.25 acres.  Thus, a water right is granted directly from the State to the water right owner, as depicted below.




With water shares, the State issues water rights to a water company (ditch company, canal company, irrigation company, etc.).  So the company is the owner of the water rights.  The company issues shares to its shareholders.  By virtue of owning shares, the shareholders are entitled to receive and use a portion of the company's water rights. 



Many times people say "I have 3 shares of water," when what they really mean is that they own a water right that allows them to divert and use 3 acre-feet of water.  Conversely, many times people say "I have 5 water rights," when what they really mean is that they have 5 shares in a particular irrigation company.

The distinction between water rights and water shares is important in many contexts, including how the water rights or water shares are transferred, how change applications are filed, and whether the water transfers automatically with the land when the land is sold.