2018 Legislative Review on Water Related Bills, by David Hartvigsen, Jeffry Gittins, and Nathan Bracken
Monday, January 22, 2018
2018 Legislative Preview
Below are summaries of the water-related bills considered during the 2018 legislative session.
HB 60 - Water Commissioner Amendments
Rep. Scott Chew
House Bill 60 exempts the State Engineer from the Utah Procurement Code with respect to the Water Commissioner Fund, but requires the State Engineer to make administrative rules governing the use of the Fund. The bill also clarifies and expands the items that can be paid from the Fund, including benefits for commissioners, expenses approved by a distribution system committee, and administration expenses of a distribution system committee. This bill is nearly identical to HB 225 that was introduced in the 2017 legislative session, but did not pass.
HB 66 - Local Government Modifications
Rep. Stephen G. Handy
This bill seeks to eliminate the need for a local district board of trustees to have an odd number of board members if the local district has more than nine board members. For improvement districts, this bill requires that the number of municipalities in an improvement must be the number of municipalities in the improvement district if there are more than nine municipalities in the district or there are an odd number of municipalities in the improvement district. This bill also requires the number of included municipalities in an improvement district plus one if there is an even number of municipalities included and there are less than nine municipalities. Finally, the bill requires the number of municipalities plus two if there are an odd number of municipalities in the improvement district and the total number is less than nine municipalities.
HB 73 - Instream Flow Water Rights Amendments
Rep. Tim Hawkes
House Bill 78 would remove the current sunset provision the Legislature enacted when it created 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, 2018.
HB 103 - Water Conservation Amendments
Rep. Gage Froerer
House Bill 103 modifies water conservation plan requirements in Utah Code section 73-10-32. Each water conservancy district, each water district that provides culinary or secondary water to 500 or more connections, and each retail water provider that provides culinary or secondary water to 500 or more connections is required to have a water conservation plan. These plans must include goals for reduction in residential, commercial, and industrial uses, as well as water conservation measures for these same uses plus landscaping. The bill also changes some recommended components of a water conservation plan into required components, such as information regarding the installation of water efficient fixtures and appliances; retail water rate structures designed to encourage conservation; and existing or proposed regulations designed to encourage conservation, including restrictions on grass landscaping. Districts and retail water providers cannot receive State funds for water development unless they have a compliant water conservation plan in place. This bill is similar to HB 304 that was introduced in the 2017 legislative session, but did not pass.
HB 124 - Water Holdings Accountability and Transparency Amendments
Rep. Kim Coleman
This bill would require cities and special service districts that supply water outside of their jurisdictional boundaries to post the following information on their website and provide it to the State Engineer: (1) a legal description and map of the service are served; (2) the cost of water assessed from users; and (3) other information regarding the water right (decree number, certificate number, point of diversion, approved uses, etc.). Rep. Coleman has indicated that the legislation is intended to implement, in part, some of the recommendations in the 2017 Utah Water Strategy, which called for improved water data and information. She also reports that the legislation seeks to provide greater transparency regarding surplus water contracts in which cities, particularly Salt Lake City, allow users outside of their boundaries to contract on a temporary basis for the use of municipal water rights. Some have expressed concern about the use of temporary contracts to supply water for permanent developments. The use of surplus water contracts, however, stems in part from Article XI, Section 6 of the Utah Constitution, which prohibits municipal corporations from selling or permanently disposing of their water rights. Notably, although HB 124 would apply to special service districts, as currently drafted it would not apply to the other types of local districts that supply water.
HB 135 - Extraterritorial Jurisdiction Amendments
Rep. Mike Noel
HB 135 would remove longstanding municipal authority under Section 10-8-15 to enact protections outside of their boundaries to protect waterworks and prevent pollution. Currently, under Section 18-1-15, cities of the first class can exercise this extraterritorial jurisdiction over the entire applicable watershed. Smaller cities have extraterritorial jurisdiction for 15 miles above their point of diversion and for a distance of 300 feet on each side of the watercourse. The legislation would authorize the Department of Environmental Quality to establish standards and administer controls to maintain water quality in watersheds to protect human health and for the construction and operation of municipal waterworks located outside of a city's limits. According to Rep. Noel, this extraterritorial jurisdiction is no longer needed and is a duplicative regulation in light of state and federal environmental protection programs, which were enacted decades after cities received the extraterritorial jurisdiction embodied in Section 10-8-15. Property rights advocates have also accused cities, particularly Salt Lake City, of using this authority improperly to stop or limit development. Officials from the Department of Environmental Quality, however, indicated at a recent meeting of the Executive Water Task Force that they lack the land management authority cities have under the current law to protect municipal water sources.
HB 142 - Impact Fee Amendments
Rep. Derrin Owens
House Bill 142 adds "natural gas facilities" to the list of facilities for which impact fees may be collected under Utah's Impact Fees Act. The Bill refers to Section 58-55-308.1 of the Code for the definition of "natural gas facilities," which defines such facilities as "one or more natural gas mains [or] one or more natural gas service lines" or a combination of both. It also includes "any necessary appurtenant facilities." The "service lines" are the laterals that run from a main line to a customer's meter. So, under this amendment, if "natural gas facilities" are included in the duly adopted impact fees facility plan, analysis, and enactment, then impact fees may be assessed, collected, and expended on those natural gas facilities, up to the meters of the ultimate consumers.
SB 28 - Local Government and Limited Purpose Entity Registry
Sen. Deidre Henderson
SB 28 would require all government entities that are not part of the state executive, legislative, and judicial branches, including all counties, cities, and local districts, to register with the lieutenant governor. In turn, the lieutenant governor would establish registration and renewal fees to create, administer, and maintain the registry. The bill would also authorize the state auditor to withhold certain state funds and property tax disbursements, as well as prohibit access to certain funds, for noncompliance with the registry requirements.
SB 29 - County Listing of Local Government and Limited Purpose Entities
Sen. Deidre Henderson
SB 29 is a companion bill to SB 28. Starting on July 1, 2019, it would require each county to list on its website the following information regarding the local government entities that operate within the county's boundaries: (1) the entity's name; (2) the type of entity; (3) the entity's governmental function; (4) the entity's contact information; (5) the members of the entity's governing body; (6) the entity's sources of revenue; and (7) if the entity is an assessment area, information regarding the assessment area's creation, purpose, and boundaries.
Senate Bill 34: Legislative Water Development Commission Amendments
Sen. Margaret Dayton
This bill seeks to remove a statutory "sunset provision" for Title 73, Chapter 7 of the Utah Code, which governs the Utah Legislative Water Development Commission. The current repeal date is December 31, 2018, but this bill would remove the repeal date entirely. The bill also allows the Commission to meet up to six times per calendar year without requiring approval from the Legislative Management Committee.
Senate Bill 35: Water Right of Trout Habitat Repeal Date Extension
Sen. Allen Christensen
This bill seeks to extend a statutory "sunset provision" for instream flow water rights for trout habitat established under Utah Code section 73-3-30(3). The current repeal date is December 31, 2018, but this bill would extend the repeal date until December 31, 2019.
SB45 - Diligence Claims
Sen. Margaret Dayton
Those who file diligence claims in the future will be well advised to provide as much evidence as possible of pre-1903 beneficial use if SB45 becomes law. SB45 amends UCA §73-5-13(5)(b) to require the State Engineer to opine on whether the water under the diligence claim was actually put to beneficial use prior to 1903. This opinion will be included in the report the State Engineer prepares for the diligence claim.
What this means is if you are filing a diligence claim you should provide all available information as to pre-1903 water use with the diligence claim. You should not expect the State Engineer to undertake an exhaustive investigation of your historic water use. Such an expectation is wholly unrealistic and will likely result in a damaging determination that pre-1903 beneficial use did not occur.
As we get farther from 1903, diligence claims are becoming both rarer and more suspect. Unless the claimant provides detailed information supporting pre-1903 water use, the expected conclusion in the state engineer's report is most likely going to be that there is no evidence of pre-1903 beneficial water use, the basic requirement for all diligence claims. This could lead to a legal challenge to the diligence claim and potential loss of the water right.
SB 61 Water Rights Adjudication Amendments
Sen. Margaret Dayton
Senate Bill 61 instructs the state engineer to return a statement of claim to the claimant without further notice of the statement of claim is not filed in time. Similarly, if an untimely statement of claim is filed with the court, the state engineer will not take further action on that statement of claim unless the claimant is excused by circumstances beyond the claimant's control, mistake, or any other reason justifying relief. SB 61 also would permit the state engineer to file one or more addenda to one or more proposed determinations, if the state engineer does the following: files the addendum with the court; in the preamble, provides an explanation of the issues addressed in the addendum; serves the addendum on each owner of record, according to the state engineer's records, of a perfected water right authorizing the diversion of water from within the area, division, or subdivision covered by the addendum; and holds a public meeting.
The 2017 General Session of the Utah Legislature
The 2017 General Session of the Utah Legislature ended on Thursday, March 9. The last day for the Governor to sign or veto bills is March 29. Here are the highlights of the water-related bills that passed and didn't pass during the session:
BILLS THAT PASSED
HB 84 - Water Law - Nonuse Requirements
Rep. Tim Hawkes
House Bill 84, which was recommended by the Executive Water Rights Task Force, clarifies that: (1) an approved nonuse application excuses the requirement of beneficial use from the nonuse application's filing date; (2) the filing or approval of a nonuse application, or a series of nonuse applications, does not constitute beneficial use or protect a water right that is already subject to forfeiture; and (3) a nonuse application does not bar a water right owner from using the water as permitted under the water right or from claiming any available defense against forfeiture. The bill also modifies the procedures for instituting a forfeiture action for nonuse.
HB 118 - Authority of State Engineer
Rep. Tim Hawkes
House Bill 118, which was recommended by the Executive Water Rights Task Force, allows the State Engineer to develop rules regarding the "duty of water" or in other words, a quantification of the maximum amount of water that can be beneficially used, without waste, for a particular purpose. Although the State Engineer and the courts in General Adjudications have used this concept for over 100 years, there is no statutory authority for this concept. This bill gives the State Engineer express authority to do what is already being done with respect to the duty of water.
HB 180 (2nd Sub.) – Water Right Transfer Amendments
Rep. Logan Wilde
House Bill 180 modifies Utah Code section 73-3-18 regarding assignment of an unperfected application to appropriate. If an assignment is made using the Division of Water Rights’ assignment form, and it is recorded and forwarded to the Division, the assignment will be treated as a report of conveyance for updating title on the Division’s database.
HB 181 – State Engineer Fee Application Amendments
Rep. Logan Wilde
House Bill 181, which was recommended by the Executive Water Rights Task Force, updates the name of an "extension of time in which to resume use application" to its current name used elsewhere in the code, i.e., a "nonuse application."
HB 301 (1st Sub.) – Canal Safety Amendments
Rep. Scott D. Sandall
House Bill 301 removes a requirement that a canal owner receive notice from a municipality or county of any proposed subdivision located within 100 feet of the canal. The bill adds a more defined requirement that a municipality or county not approve or reject a subdivision that is located within 100 feet of canal until after the municipality has provided at least 20 days’ notice of the subdivision to the canal owner so that the canal owner can provide input regarding access to the canal, maintenance of the canal, canal protection, and canal safety. The bill also makes minor changes to the requirement that canal owners provide contact information and canal location information to each municipality and county in which its canal is located.
SB 11 (2nd Sub.) - Water Development Commission Amendments
Sen. Margaret Dayton
Senate Bill 11 renames the State Water Development Commission to the Legislative Water Development Commission and modifies the membership of the Commission. The bill removes all of the non-legislative, non-voting members from the Commission: the state treasurer; two representatives of the Governor's Office, including one representative from the Governor's Office of Management and Budget; nine representatives of different river districts; the executive director of the Department of Natural Resources; the executive director of the Department of Environmental Quality; the commissioner of agriculture and food; a member of the Board of Water Resources; a representative of an organized environmental group; a representative of agricultural production; and a representative with experience with finance and economics. The bill adds that non-voting members can be appointed to two-year terms by the Legislative Management Committee upon recommendation of the Commission co-chairs.
SB 45 – Retail Water Line Disclosure Amendments
Sen. Karen Mayne
Senate Bill 45 affects public entities that provide culinary water service to customers. The bill requires that twice per calendar year, these public retail water providers must provide a disclosure to its customers that states whether the property owner or the provider is responsible for repairs to the water line that serves the customer. The purpose of this requirement is to give better clarification of where the provider's responsibility for water line maintenance ends and where the property owner's responsibility for water line maintenance begins. The bill modifies Utah Code section 11-8-4, which was enacted in 2016 and requires the same disclosure for sewer service providers relative to sewer line maintenance responsibilities.
SB 63 (1st Sub.) - Nonprofit Corporation Amendments – Water Companies
Sen. Margaret Dayton
Senate Bill 63 modifies the Utah Revised Nonprofit Corporation Act to change the default rule on the transferability of shares in a water company from non-transferable to transferable, unless the articles or bylaws of the water company specify otherwise. The bill further specifies that any restrictions on the transfer of shares in a water company must be reasonable, adopted in good faith and for a legitimate purpose, adopted in the best interests of the water company and its shareholders, and not discriminate against any individual shareholder or class of shareholders. The bill also clarifies that a shareholder in a water company has “an equitable, beneficial interest in the use of the water supply of the water company, proportionate to the shareholder’s shares in the water company, which is an interest in real property” and has a right to receive his/her proportionate share of the company’s water. The bill also expressly allows a water company to purchase delinquent shares of stock and clarifies the process for distributions to shareholders in a water company.
SB 214 (1st Sub.) - Public Water Supplier Amendments
Sen. Jani Iwamoto
Senate Bill 214 originally proposed to modify Utah's instream flow statute (Section 73-3-30) to allow public water suppliers to change perfected water rights for instream use. The substituted bill acknowledged that the instream flow issue is very complex and that additional work and input from a number of stakeholders is necessary before any changes are made to the instream flow statute. The bill encourages the Water Development Commission and the Executive Water Task Force to study possible options for expanding the list of those who can file for instream flow rights.
SJR 11 - Joint Resolution Regarding the Central Utah Project
Sen. Curtis S. Bramble
Senate Joint Resolution 11 urges the United States Congress and the new administration to budget sufficient funds to enable the Bonneville Unit of the Central Utah Project to be completed.
BILLS THAT DID NOT PASS:
HB 225 – Water Commissioner Amendments
Rep. Scott Chew
House Bill 225 exempts the State Engineer from the Utah Procurement Code with respect to the Water Commissioner Fund, but requires the State Engineer to make administrative rules governing the use of the Fund. The bill also clarifies and expands the items that can be paid from the Fund, including benefits for commissioners, expenses approved by a distribution system committee, and administration expenses of a distribution system committee.
HB 304 (1st Sub.) – Water Conservation Amendments
Rep. Gage Froerer
House Bill 304 modifies water conservation plan requirements, including requiring each water conservancy district and each retail water provider to have a water conservation plan that includes goals for reduction in residential, commercial, and industrial uses, and water conservation measures for these same uses, and including landscaping. The bill also changes some recommended components of a water conservation plan into required components, such as information regarding the installation of water efficient fixtures and appliances; retail water rate structures designed to encourage conservation; and existing or proposed regulations designed to encourage conservation, including restrictions on grass landscaping.
HB 444 – Water Appropriation Modifications
Rep. Merrill F. Nelson
House Bill 444 clarifies which State divisions, departments, and entities can file applications to appropriate water. The bill adds language that these State entities must go through the same appropriation process as a private property owner would have to go through, and that the State entities have no special rights by virtue of being a public entity or public water supplier.
SB 228 (1st Sub.) - Water Infrastructure Revisions
Sen. J. Stuart Adams
Senate Bill 228 seeks to modify rules about loans from the Board of Water Resources, including a requirement that the Board establish a plan to require loan applicants to submit their project plans for an independent value engineering review to examine ways that the project’s value can be increased through reducing costs and improving function.
SB 271 - Canal and Ditch Modifications
Sen. David P. Hinkins
Senate Bill 271 seeks to allow a property owner whose land is crossed by a canal, ditch, drain, or “buried irrigation conduit” to change the location of the canal, ditch, drain, or “buried irrigation conduit,” subject to several requirements and limitations. The property owner must provide written notice to the water owner, including detailed plans and specifications prepared by a licenses engineer. The property owner must provide contact information for two other engineers to independently review the plans and specifications, and must pay for the cost of this independent review if the water owner elects to use one of the two engineers suggested by the property owner. Alternatively, the water owner can select its own independent engineer, but is responsible for paying the costs incurred for this independent review. The property owner and water owner must negotiate terms regarding any restrictions or impediments to the flow of water through the water channel. This bill would not allow for culinary water lines or secondary water lines to be moved.
Bills that passed in the 2015 Legislative Session:
2015 BILLS THAT DID NOT PASS IN THE 2015 LEGISLATIVE SESSION:
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