2018 Utah Legislative Guide on Water Law

By Emily E. Lewis

The 2018 Legislative Session is set to begin on January 22, 2018. Here is a brief update and analysis of key water bills to watch. Most of this year’s bills make minor changes to existing law and are generally administrative in nature. However, two numbered Bills HB124 and BH135, have potentially large impacts to Utah water law and should be watched closely. A yet unnumbered bill regarding Canal Relocation will also have on the ground impacts for water developers and water companies.

Please be following Clyde Snow for timely information as the 2018 Legislative Session progress and for general movements in Utah Water Law.

HB124: Water Holdings Accountability and Transparency Amendments (Rep. Kim Coleman)

This Bill requires a city or special service district that supplies municipal water outside the city or special service district's jurisdictional boundaries to publically post: a legal description and map of the service area being served; the cost of water being assessed from users; and various information about the water rights being used to service the area. The Bill requires this information also be provided to and posted by the Utah State Engineer.

At the January 9, 2018, Executive Water Task Force meeting, Representative Coleman presented the Bill to Task Force members and the public in attendance. Representative Coleman indicated the Bill was intended to satisfy the 2017 State Water Strategy Plan recommendation that the State collect more information about water use. Representative Coleman indicated the Bill was an initial first step and surplus water contracts, or water supplied outside a city or special service district boundary, were targeted because the contracts presented particular vulnerabilities for transparency.

Several members of the public expressed support of the Bill and expressed concern about the level of long-term water security provided to developments using surplus water contracts.

Several members of the EWTF expressed concern about the Bill, requested additional time for analysis, and offer the EWTF as resource to further refine the Bill. Specific concerns include:

  •  surplus contracts are the practical solution to address the Utah Constitution’s Art. XI, Sec. 6 prohibition on municipalities selling or alienating water rights;
  • surplus contracts are a common tool for providing water to difficult service areas, such as to unincorporated county areas that would not otherwise receive water, since counties are not authorized to provide water to connections that are geographically closer and easier to serve by a different municipality;
  • surplus contracts are entered with the express understanding they are temporary;
  • municipalities and special service districts have made large investments in infrastructure to serve surplus contract holders and the likelihood that contracts would be cancelled is very limited;
  • special service districts are authorized by law to serve areas outside their boundaries;
  • the Bill is simultaneously overly broad in the information requested and too narrow in terms of the scope of water providers addressed;
  • information requested is already publically available on the Division of Water Rights website;
  • the Bill did not meet the goal of greater transparency as water rights portfolio management makes it difficult to isolate specific water rights used for surplus contracts;
  • the Bill adds additional administrative burdens on the identified water suppliers.

In sum, this is a Bill to watch.

Bill: https://le.utah.gov/~2018/bills/static/HB0124.html

HB135: Extraterritorial Jurisdiction Amendments (Rep. Mike Noel)

This Bill makes significant changes to Utah Code Ann. § 10-8-15, Extra-Territorial jurisdiction.

The Bill limits a city’s extra-territorial jurisdiction to the limited purpose of operating and maintaining waterworks and removes jurisdiction to protect waterworks, which includes water sources, such as reservoirs and streams, from injury and pollution. Specifically, the Bill removes the ability of cities to protect their sources for 15 miles above a point of diversion and 300 feet on each side of a stream, and for cities of the first class, removes extra-territorial jurisdiction over the entire watershed. The Bill also adds a new requirement that the Utah Department of Environmental Quality establish standards to maintain water quality and for the construction and operation of city waterworks located inside and outside city limits.

Representative Mike Noel was not present at the January 9, 2018, Executive Water Task Force meeting to discuss the Bill.

Several members of the EWTF and public expressed concern about the Bill and requested more time to study its impacts. Specifically, the Bill:

  • undercuts the ability of cities to proactively manage the watersheds that produce municipal water against pollution and other interference. With increasing threats to watersheds, such as fire, watershed management is increasingly becoming an important and cost effective way to protect high quality water resources;
  • greatly expands the role of DEQ, requiring DEQ to move into a land management and water system management role typically reserved for municipalities;
  • would most likely carry a large fiscal note to add the necessary DEQ employees needed to comply with the new requirements.

This Bill is very important to watch as its enactment would have widespread impacts on the ability of cities to manage watersheds and protect water resources from pollution.

Bill: https://le.utah.gov/~2018/bills/static/HB0135.html

SB61: General Adjudication Amendments: (Rep. Margaret Dayton)

This Bill makes several clarifying amendments to the Water Rights General Adjudication. Specifically, the Bill:

  • requires, the State Engineer shall return an untimely filed Water User Claim to the claimant without further action;
  • clarifies that the State Engineer has the authority to issue Addendums and provided guidelines for how the State Engineer should prepare and file an Addendum to a Proposed Determination; and
  • clarifies the General Summons language sent to all potential water users that a water user need not appear in the General Adjudication proceeding but they have a duty to follow the proceeding to assert or defend a claim to water.

With increasing activity in the Utah Lake Jordan River General Water Rights Adjudication, these clarifications will aid in limiting public confusion about the general adjudication process

Bill: https://le.utah.gov/~2018/bills/static/SB0061.html

HB73: Instream Flow Water Amendments (Rep. Timothy Hawkes) and

SB35: Water Right for Trout Habitat Repeal Date Extension (Sen. Allen Christensen)

HB73 amends Utah Code Ann. § 63I-1-273 to remove a sunset provision regarding the ability of certain fishing groups to file for a 10-year fixed time Change Application to receive a limited instream flow water right under Utah Code Ann. § 73-3-30.

Bill: https://le.utah.gov/~2018/bills/static/HB0073.html

SB35 makes a similar amendment, but instead of repealing the sunset provision, SB35 extends the sunset from December 31, 2018 to December 31, 2109.

Bill: https://le.utah.gov/~2018/bills/static/SB0035.html

Presently, a Change Application requesting to use water for instream flows in a specified section of a natural stream, can be applied for if the instream flow is necessary for the propagation of fish, public recreation, or the reasonable preservation or enhancement of the natural stream environment. Utah Code Ann. § 73-3-30(2). The statute is limited, in that, only certain groups can apply for instream flow Change Applications, namely fishing groups, with the approval of the Utah Division of Wildlife Resources, the Utah Division of Wildlife Resources, and the Utah Division of Parks and Recreation

Changes to Utah’s instream flow legislation have received a fair amount of attention in the last several years. During the 2017 Legislation Session, Senator Jani Iwamoto ran SB 214 Public Water Supplier Amendments to task the Water Development Commission and Executive Water Task Force with studying the impacts of expanding the group of entities who can apply for instream flows to include public water suppliers. SB 214 did not pass.

Since the 2017 Legislative Session, several working groups have been meeting regularly to discuss the future of instream flow legislation in Utah. These groups do not have any legislation ready for the 2018 Legislative Session, but will most likely have legislation ready for review for the 2019 Legislative Session. In the face of changing water demands and source supply, changes to Utah’s instream flows laws could have significant real world impacts for Utah’s water future. This should be a very interesting and timely discussion – keep your eyes and ears open in the coming months.

SB34: Legislate Water Development Commission (Senator Margaret Dayton)

This Bill amends Utah Code Ann. § 73-27-103 to add the provision that the Legislative Water Development Commission can meet up to six times a year without approval from the Legislative Management Committee.

Bill: https://le.utah.gov/~2018/bills/static/SB0034.html

SB45: Water Law Amendments Diligence Claims (Senator Margaret Dayton and Rep. Mike Noel)

This Bill amends Utah Code Ann. § 73-5-13 to add the requirement that the Utah State Engineer include an evaluation of asserted beneficial use in their report of a field investigation for a diligence claim.

This Bill is helpful in creating a record that can be used in either defending or opposing the recognition of a diligence claim under subsection 6 of the statute. The Bill also represents the Utah Legislature’s continual refinement and clarification of how diligence claims are to be asserted, defended, and opposed. The last significant change in the law regarding diligence claims occurred in 2013 when the legislature amended Utah Code Ann. §73-5-13 to hold that after a final summons in a General Adjudication area has been issued, future diligence claims are prohibited. As time marches forward and the ability to prove pre-statutory use of water becomes more and more difficult, these clarifications are necessary to ensure only valid claims to water are recognized.

Bill: https://le.utah.gov/~2018/bills/static/SB0045.html

HB60: Water Commissioner Amendments (Rep. Scott Chew)

This Bill exempts the State Engineer from Title 63G, Chapter 6a, Utah Procurement Code, for the purpose of Section 73-5-1.5, which authorizes and creates the Water Commission Fund. The Bill also requires the Division of Finance to create rules for the reimbursement of expenses incurred in administering a distribution system

Bill: https://le.utah.gov/~2018/bills/static/HB0060.html

Canal Relocation Bill: This Bill is not yet numbered, but will most likely soon have a sponsor.

Members of the Executive Water Task Force and the development community have been working on draft Legislation to address the relocation of irrigation canals. This effort is in response to SB217 proposed during the 2017 Legislative Session. SB217 did not pass.

The proposed Bill provides a process for property owners, who own the subservient estate, to work with owners of conveyance facilities, or canals, who own the dominate estate, to relocate a canal to accommodate development. The Bill provides a process for property owners to provide, and canal owners to inspect and approve, engineering plans and construction of canal relocations or modifications. The Bill establishes responsibilities regarding payment of costs to relocate a canal, mediation or arbitration before the Utah Office of Property Rights Ombudsman, and recoverable costs for any court action.

The Executive Water Task Force discussed the draft Bill at the January 9, EWTF meeting. There were some concerns expressed that this Bill was not needed and the issue is governed by the 2nd Restatement of Property Law. Others expressed comments that the draft Bill was a good compromise and a reasonable solution. A competing Bill may be introduced, making canal relocation a topic to watch.

Clyde Snow will provide updates once the draft Bill is numbered and publically available.