LEGISLATIVE REVIEW OF WATER RELATED BILLS

by David Hartvigsen, Jeffry Gittins, and Nathan Bracken

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, and the effective date for most of the newly enacted bills will be May 9, unless otherwise noted.  Here are the highlights of the water related bills that passed and didn't pass during the session:

Bills That Passed

HB 55 (2nd Sub.) - Government Nonprofit Entity Compliance Amendments
Rep. Kim F. Coleman
This bill requires that certain nonprofit corporations comply with the Open & Public Meetings Act, the Government Records Access & Management Act (GRAMA), and the Fiscal Procedures in the Interlocal Cooperation Act. Under the bill, a nonprofit corporation will qualify as a "governmental nonprofit entity" if it satisfies one of two tests. Under the first test, one or more governmental entities must wholly own or wholly control the nonprofit corporation, unless the corporation receives no operating funding or other financial support from any governmental entity. Under the second test, a governmental entity must have a "controlling interest" in the corporation AND the corporation must do at least one of the following: (1) exercise taxing authority; (2) impose a mandatory fee where membership in the corporation is mandated by law; or (3) receive a majority of its funds from one or more governmental entities, except in those situations in which the governmental entities pay fees, dues, or assessments pursuant to voluntary rather than mandatory membership in the corporation. Importantly, the bill exempts water companies that are not wholly owned by one or more governmental entities until July 1, 2019.

http://le.utah.gov/~2017/bills/static/HB0055.html 

HB 84 - Water Law - Nonuse Requirements
Rep. Tim Hawkes
This bill, 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.

http://le.utah.gov/~2017/bills/static/HB0084.html

HB 118 - Authority of State Engineer
Rep. Tim Hawkes
This bill, 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.

http://le.utah.gov/~2017/bills/static/HB0118.html

HB 180 (2nd Sub.) - Water Right Transfer Amendments
Rep. Logan Wilde
This bill 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.

http://le.utah.gov/~2017/bills/static/HB0180.html

HB 181 - State Engineer Fee Application Amendments
Rep. Logan Wilde
This bill, 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."

http://le.utah.gov/~2017/bills/static/HB0181.html

HB 301 (1st Sub.) - Canal Safety Amendments
Rep. Scott D. Sandall
This bill 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.

http://le.utah.gov/~2017/bills/static/HB0301.html

SB 11 (2nd Sub.) - Water Development Commission Amendments
Sen. Margaret Dayton
This bill 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.

http://le.utah.gov/~2017/bills/static/SB0011.html  

SB 45 - Retail Water Line Disclosure Amendments
Sen. Karen Mayne
This bill 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.

http://le.utah.gov/~2017/bills/static/SB0045.html

SB 63 (1st Sub.) - Nonprofit Corporation Amendments - Water Companies
Sen. Margaret Dayton
This bill modifies the Utah Revised Nonprofit Corporation Act to change the default rule on the transferability of shares in a water company from non-transferrable to transferrable, 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.

http://le.utah.gov/~2017/bills/static/SB0063.html

SB 214 (1st Sub.) - Public Water Supplier Amendments
Sen. Jani Iwamoto
This bill 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.

http://le.utah.gov/~2017/bills/static/SB0214.html  

SJR 11 - Joint Resolution Regarding the Central Utah Project
Sen. Curtis S. Bramble
This joint resolution 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.

http://le.utah.gov/~2017/bills/static/SJR011.html