Water and the Law

Question:

There certainly has been a lot of publicity and controversy surrounding H.B. 51. How did this bill come about?

Answer:

Last April, State Engineer Jerry Olds appeared before the Natural Resources, Agriculture, and Environment Interim Committee of the Utah legislature and suggested that an ad hoc committee be created to provide recommendations on how Utah's forfeiture law should be applied to Public Water Suppliers. An earlier decision by the State Engineer involving a Roosevelt City change application had created a controversy as to the authority of the State Engineer to consider lack of use of water in the change application setting. Accordingly, the State Engineer sought clarification from the legislature. Representative Patrick Painter (R-Mona) took on the challenge of working with a coalition of water users to prepare a bill to address this issue. A draft bill was approved by the House Interim Committee on Natural Resources before the legislative session started but underwent significant revisions during the session. After a herculean effort by Representative Painter and others the legislature ultimately passed the Fifth Substitute of H.B. 51.

Question:

What does H.B. 51 do?

Answer:

The primary purpose of H.B. 51 is to protect Public Water Suppliers against forfeiting water rights that the suppliers will need to meet the reasonable future requirements of the public. Through the legislative process, however, additional items were added to the bill. The final version of the bill makes, among others, the following changes to Utah Water law:

H.B. 51 changes the time period after which a water right is subject to forfeiture for nonuse from five years to seven years;
H.B. 51 clarifies that a water right may only be forfeited through a judicial action;
H.B. 51 creates a limited exemption from forfeiture for certain water rights, including (1) water rights held by a Public Water Supplier for its reasonable future requirements, (2) water rights used according to a lease or other agreement; (3) water rights approved for use on land subject to a government fallowing program, (4) water rights subject to an approved Change Application so long as it is being diligently pursued, (5) water rights that are in storage, (6) water rights that are unavailable based on priority, and (7) supplemental water rights where other water rights provide sufficient water;
H.B. 51 simplifies the nonuse application process; and
H.B. 51 allows a shareholder of an irrigation company to file a nonuse application on his or her shares.

Question:

What are Public Water Suppliers and how are they affected?

Answer:

A Public Water Supplier is defined in the bill as including the following types of entities that supply water to the public for municipal, domestic, or industrial use: (1) a governmental entity (i.e., cities, towns, counties, districts, etc.), (2) a water corporation regulated by the Utah Public Service Commission, (3) a community water system that meets certain requirements set forth in the bill, and (4) a water association that is owned mostly (greater than 70%) by governmental entities and that is a local sponsor of a U.S. Bureau of Reclamation water project.

H.B. 51 exempts water rights owned by a Public Water Supplier from forfeiture for nonuse if the water right is being "conserved or held for the reasonable future water requirement of the public." This forfeiture protection applies to all water rights acquired by the Public Water Supplier before May 5, 2008, and applies to water rights acquired after that date if a Change Application is filed by the Public Water Supplier and approved by the State Engineer.

The "reasonable future water requirements of the public" is the water needed for the next 40 years within the Public Water Supplier's projected service area based on the projected population growth or other water demands. The projected service area for a community water system includes only the area served by the community water system's existing distribution facilities, but expands as those facilities expand.

Question:
Does this mean that Public Water Suppliers will not be filing nonuse applications?

Answer:

While the necessity of filing nonuse applications will be diminished for Public Water Suppliers, there may nevertheless be circumstances where a nonuse application will be warranted. For example, a water right held for future requirements of an area outside a Public Water Supplier's projected service area would not be protected by the exemption, and water rights held for the future requirements of the public beyond 40 years would also fall outside the exemption's protection.

Question:

How does H.B. 51 affect other water right holders who are not Public Water Suppliers?

Answer:

H.B. 51 extends the allowable period of nonuse from five years to seven years. Additionally, while much of the discussion and controversy surrounding H.B. 51 has centered on the Public Water Supplier exemption, the bill created other exemptions that apply to other users. For instance, agricultural water users can avail themselves of the fallowing exemption, and all water right holders can benefit from the exemption for water rights under an approved Change Application that is being diligently pursued. Furthermore, H.B. 51 simplifies the nonuse application process and lessens the risk of filing a nonuse application.

Question

How does H.B. 51 affect the nonuse application process?

Answer:

The new law affects the following aspects of the nonuse application process:

Who can file: All shareholders of a water company, not just Public Water Supply entities, may file a nonuse application on the water represented by that shareholder's stock.

Application information and time for filing: When filing a nonuse application, an applicant no longer needs to indicate the date the water was last diverted and placed to beneficial use. The State Engineer will no longer look at past use when considering a nonuse application. Accordingly, nonuse applications can be filed even if the water right has not been used for more than seven years.

Effect of approval of non-use application: The new law specifies that the approved period of nonuse covers only the period from the application's filing date until the expiration date.

No extensions of non-use: Under the new law, a person having an approved application for nonuse will no longer be permitted to merely file an extension of time to extend the nonuse period. Rather, a person may extend the nonuse period only by filing a subsequent nonuse application, which is treated as a new application and must comply with all statutory and Division requirements for a non-use application.

No statement or certificate of resumption: Finally, the new law no longer requires that a statement of resumption of use be filed once a water right under an approved application for nonuse has been put to beneficial use, nor is a certificate of resumption issued.

Question:

What are the grounds under H.B. 51 for filing a nonuse application?

Answer:

The grounds for filing a non-use application remain the same as under the previous law, with the exception of use of a water right under a contract with an approved state agreement or federal fallowing program. The fallowing program grounds for nonuse is no longer necessary given that it is now an exemption from forfeiture. While the new law also eliminates the catch-all "any other reasonable cause," according to legislative counsel, it still allows for any other reasonable cause based on the use of the word "includes" preceding the specified grounds for nonuse.

Question:

Does H.B. 51 alter the change application process?

Answer:

No. The Senate added a statement of intent that H.B. 51 "is not intended to change the way the State Engineer evaluates change applications based on historic beneficial use."

Question:

What else will H.B. 51 change?

Answer:

The new law clarifies that forfeited water first satisfies existing water rights according to priority date, and then may be available for appropriation.

Question:

When does H.B. 51 go into effect?

Answer:

May 5, 2008.

Question:

Where can I obtain a copy of the version of H.B. 51 approved by the Legislature?

Answer:

The text of H.B. 51 is available at the following web address: http://le.utah.gov/~2008/bills/hbillint/hb0051s05.pdf. Assuming that the Governor signs the bill, there will be a link to the enrolled copy of the bill at the following web address: http://www.le.state.ut.us/asp/passedbills/passedbills.asp.