Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                         S.B. 125
Approved for Filing: P. Owen 6                             nd
                                                                 2 Sub. (Salmon)
          6 02-15-24 9:36 AM 6
                     Representative Casey Snider proposes the following substitute bill:
                          SECONDARY WATER AMENDMENTS
                                     2024 GENERAL SESSION
                                          STATE OF UTAH
                              Chief Sponsor: David P. Hinkins
                                House Sponsor: Carl R. Albrecht
 6
 LONG TITLE
 General Description:
        This bill modifies provisions related to secondary water.
 Highlighted Provisions:
        This bill:
        < amends definitions;
        < modifies who may meter at strategic points of a system as approved by the state
 engineer;
        < changes certain caps on grants for secondary water metering; and
        < makes technical changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None                                                                                2 ndSub. S.B. 125
 Utah Code Sections Affected:
 AMENDS:
        73-10-34, as last amended by Laws of Utah 2023, Chapter 260
        73-10-34.5, as last amended by Laws of Utah 2023, Chapter 260
25
     *SB0125S02*
       2nd Sub. (Salmon) S.B. 125                                                      02-15-24 9:36 AM
 Be it enacted by the Legislature of the state of Utah:
         Section 1. Section 73-10-34 is amended to read:
         73-10-34. Secondary water metering -- Loans and grants.
         (1) As used in this section:
         (a) "Agriculture use" means water used on land assessed under Title 59, Chapter 2, Part
 5, Farmland Assessment Act.
         (b) (i) "Commercial user" means a secondary water user that is a place of business.
         (ii) "Commercial user" does not include a multi-family residence, an agricultural user,
 or a customer that falls within the industrial or institutional classification.
         (c) "Critical area" means an area serviced by one of the four largest water conservancy
 districts, as defined in Section 17B-1-102, measured by operating budgets.
         [(c)] (d) "Full metering" means that use of secondary water is accurately metered by a
 meter that is installed and maintained on every secondary water connection of a secondary
 water supplier.
         [(d)] (e) (i) "Industrial user" means a secondary water user that manufactures or
 produces materials.
         (ii) "Industrial user" includes a manufacturing plant, an oil and gas producer, and a
 mining company.
         [(e)] (f) (i) "Institutional user" means a secondary water user that is dedicated to public
 service, regardless of ownership.
         (ii) "Institutional user" includes a school, church, hospital, park, golf course, and
 government facility.
         [(f)] (g) "Power generation use" means water used in the production of energy, such as
 use in an electric generation facility, natural gas refinery, or coal processing plant.
         [(g)] (h) (i) "Residential user" means a secondary water user in a residence.
         (ii) "Residential user" includes a single-family or multi-family home, apartment,
 duplex, twin home, condominium, or planned community.
         [(h)] (i) "Secondary water" means water that is:
         (i) not culinary or water used on land assessed under Title 59, Chapter 2, Part 5,
 Farmland Assessment Act; and
         (ii) delivered to and used by an end user for the irrigation of landscaping or a garden.
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       02-15-24 9:36 AM                                                  2nd Sub. (Salmon) S.B. 125
        [(i)] (j) "Secondary water connection" means the location at which the water leaves the
 secondary water supplier's pipeline and enters into the remainder of the pipes that are owned by
 another person to supply water to an end user.
        [(j)] (k) "Secondary water supplier" means an entity that supplies pressurized
 secondary water.
        [(k)] (l) "Small secondary water retail supplier" means an entity that:
        (i) supplies pressurized secondary water only to the end user of the secondary water;
 and
        (ii) (A) is a city, town, or metro township; or
        (B) supplies 5,000 or fewer secondary water connections.
        (2) (a) (i) A secondary water supplier that supplies secondary water within a county of
 the first or second class and begins design work for new service on or after April 1, 2020, to a
 commercial, industrial, institutional, or residential user shall meter the use of pressurized
 secondary water by the users receiving that new service.
        (ii) A secondary water supplier that supplies secondary water within a county of the
 third, fourth, fifth, or sixth class and begins design work for new service on or after May 4,
 2022, to a commercial, industrial, institutional, or residential user shall meter the use of
 pressurized secondary water by the users receiving that new service.
        (b) By no later than January 1, 2030, a secondary water supplier shall install and
 maintain a meter of the use of pressurized secondary water by each user receiving secondary
 water service from the secondary water supplier.
        (c) Beginning January 1, 2022, a secondary water supplier shall establish a meter
 installation reserve for metering installation and replacement projects.
        (d) A secondary water supplier, including a small secondary water retail supplier, may
 not raise the rates charged for secondary water:
        (i) by more than 10% in a calendar year for costs associated with metering secondary
 water unless the rise in rates is necessary because the secondary water supplier experiences a
 catastrophic failure or other similar event; or
        (ii) unless, before raising the rates on the end user, the entity charging the end user
 provides a statement explaining the basis for why the needs of the secondary water supplier
 required an increase in rates.
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        2nd Sub. (Salmon) S.B. 125                                                  02-15-24 9:36 AM
        (e) (i) A secondary water supplier that provides pressurized secondary water to a
 commercial, industrial, institutional, or residential user shall develop a plan, or if the secondary
 water supplier previously filed a similar plan, update the plan for metering the use of the
 pressurized water.
        (ii) The plan required by this Subsection (2)(e) shall be filed or updated with the
 Division of Water Resources by no later than December 31, 2025, and address the process the
 secondary water supplier will follow to implement metering, including:
        (A) the costs of full metering by the secondary water supplier;
        (B) how long it would take the secondary water supplier to complete full metering,
 including an anticipated beginning date and completion date, except a secondary water supplier
 shall achieve full metering by no later than January 1, 2030; and
        (C) how the secondary water supplier will finance metering.
        (3) A secondary water supplier shall on or before March 31 of each year, report to the
 Division of Water Rights:
        (a) for commercial, industrial, institutional, and residential users whose pressurized
 secondary water use is metered, the number of acre feet of pressurized secondary water the
 secondary water supplier supplied to the commercial, industrial, institutional, and residential
 users during the preceding 12-month period;
        (b) the number of secondary water meters within the secondary water supplier's service
 boundary;
        (c) a description of the secondary water supplier's service boundary;
        (d) the number of secondary water connections in each of the following categories
 through which the secondary water supplier supplies pressurized secondary water:
        (i) commercial;
        (ii) industrial;
        (iii) institutional; and
        (iv) residential;
        (e) the total volume of water that the secondary water supplier receives from the
 secondary water supplier's sources; and
        (f) the dates of service during the preceding 12-month period in which the secondary
 water supplier supplied pressurized secondary water.
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        02-15-24 9:36 AM                                                 2nd Sub. (Salmon) S.B. 125
         (4) (a) Beginning July 1, 2019, the Board of Water Resources may make up to
 $10,000,000 in low-interest loans available each year:
         (i) from the Water Resources Conservation and Development Fund, created in Section
 73-10-24; and
         (ii) for financing the cost of secondary water metering.
         (b) The Division of Water Resources and the Board of Water Resources shall make
 rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
 establishing the criteria and process for receiving a loan described in this Subsection (4), except
 the rules may not include prepayment penalties.
         (5) (a) Beginning July 1, 2021, subject to appropriation, the Division of Water
 Resources may make matching grants each year for financing the cost of secondary water
 metering for a commercial, industrial, institutional, or residential user by a small secondary
 water retail supplier that:
         (i) is not for new service described in Subsection (2)(a); and
         (ii) matches the amount of the grant.
         (b) For purposes of issuing grants under this section, the division shall prioritize the
 small secondary water retail suppliers that can demonstrate the greatest need or greatest
 inability to pay the entire cost of installing secondary water meters.
         (c) The amount of a grant under this Subsection (5) may not:
         (i) exceed 50% of the small secondary water retail supplier's cost of installing
 secondary water meters; or
         (ii) supplant federal, state, or local money previously allocated to pay the small
 secondary water retail supplier's cost of installing secondary water meters.
         (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
 Board of Water Resources shall make rules establishing:
         (i) the procedure for applying for a grant under this Subsection (5); and
         (ii) how a small secondary water retail supplier can establish that the small secondary
 water retail supplier meets the eligibility requirements of this Subsection (5).
         (6) Nothing in this section affects a water right holder's obligation to measure and
 report water usage as described in Sections 73-5-4 and 73-5-8.
         (7) If a secondary water supplier fails to comply with Subsection (2)(b), the secondary
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        2nd Sub. (Salmon) S.B. 125                                                  02-15-24 9:36 AM
 water supplier:
         (a) beginning January 1, 2030, may not receive state money for water related purposes
 until the secondary water supplier completes full metering; and
         (b) is subject to an enforcement action of the state engineer in accordance with
 Subsection (8).
         (8) (a) (i) The state engineer shall commence an enforcement action under this
 Subsection (8) if the state engineer receives a referral from the director of the Division of
 Water Resources.
         (ii) The director of the Division of Water Resources shall submit a referral to the state
 engineer if the director:
         (A) finds that a secondary water supplier fails to fully meter secondary water as
 required by this section; and
         (B) determines an enforcement action is necessary to conserve or protect a water
 resource in the state.
         (b) To commence an enforcement action under this Subsection (8), the state engineer
 shall issue a notice of violation that includes notice of the administrative fine to which a
 secondary water supplier is subject.
         (c) The state engineer's issuance and enforcement of a notice of violation is exempt
 from Title 63G, Chapter 4, Administrative Procedures Act.
         (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
 state engineer shall make rules necessary to enforce a notice of violation, that includes:
         (i) provisions consistent with this Subsection (8) for enforcement of the notice if a
 secondary water supplier to whom a notice is issued fails to respond to the notice or abate the
 violation;
         (ii) the right to a hearing, upon request by a secondary water supplier against whom the
 notice is issued; and
         (iii) provisions for timely issuance of a final order after the secondary water supplier to
 whom the notice is issued fails to respond to the notice or abate the violation, or after a hearing
 held under Subsection (8)(d)(ii).
         (e) A person may not intervene in an enforcement action commenced under this
 section.
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        02-15-24 9:36 AM                                                 2nd Sub. (Salmon) S.B. 125
        (f) After issuance of a final order under rules made pursuant to Subsection (8)(d), the
 state engineer shall serve a copy of the final order on the secondary water supplier against
 whom the order is issued by:
        (i) personal service under Utah Rules of Civil Procedure, Rule 5; or
        (ii) certified mail.
        (g) (i) The state engineer's final order may be reviewed by trial de novo by the district
 court in Salt Lake County or the county where the violation occurred.
        (ii) A secondary water supplier shall file a petition for judicial review of the state
 engineer's final order issued under this section within 20 days from the day on which the final
 order was served on the secondary water supplier.
        (h) The state engineer may bring suit in a court of competent jurisdiction to enforce a
 final order issued under this Subsection (8).
        (i) If the state engineer prevails in an action brought under Subsection (8)(g) or (h), the
 state may recover court costs and a reasonable attorney fee.
        (j) As part of a final order issued under this Subsection (8), the state engineer shall
 order that a secondary water supplier to whom an order is issued pay an administrative fine
 equal to:
        (i) $10 for each non-metered secondary water connection of the secondary water
 supplier for failure to comply with full metering by January 1, 2030;
        (ii) $20 for each non-metered secondary water connection of the secondary water
 supplier for failure to comply with full metering by January 1, 2031;
        (iii) $30 for each non-metered secondary water connection of the secondary water
 supplier for failure to comply with full metering by January 1, 2032;
        (iv) $40 for each non-metered secondary water connection of the secondary water
 supplier for failure to comply with full metering by January 1, 2033; and
        (v) $50 for each non-metered secondary water connection of the secondary water
 supplier for failure to comply with full metering by January 1, 2034, and for each subsequent
 year the secondary water supplier fails to comply with full metering.
        (k) Money collected under this Subsection (8) shall be deposited into the Water
 Resources Conservation and Development Fund, created in Section 73-10-24.
        (9) A secondary water supplier located within a county of the fifth or sixth class is
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        2nd Sub. (Salmon) S.B. 125                                                  02-15-24 9:36 AM
 exempt from Subsections (2)(a), (2)(b), (2)(c), (2)(e), (7), and (8) if:
        (a) the owner or operator of the secondary water supplier seeks an exemption under
 this Subsection (9) by establishing with the Division of Water Resources that the cost of
 purchasing, installing, and upgrading systems to accept meters exceeds 25% of the total
 operating budget of the owner or operator of the secondary water supplier;
        (b) the secondary water supplier agrees to not add a new secondary water connection to
 the secondary water supplier's system on or after May 4, 2022;
        (c) within six months of when the secondary water supplier seeks an exemption under
 Subsection (9)(a), the secondary water supplier provides to the Division of Water Resources a
 plan for conservation within the secondary water supplier's service area that does not require
 metering;
        (d) the secondary water supplier annually reports to the Division of Water Resources
 on the results of the plan described in Subsection (9)(c); and
        (e) the secondary water supplier submits to evaluations by the Division of Water
 Resources of the effectiveness of the plan described in Subsection (9)(c).
        (10) A secondary water supplier is exempt from Subsections (2)(a), (2)(b), (2)(c),
 (2)(e), (7), and (8) to the extent that the secondary water supplier:
        (a) is unable to obtain a meter that a meter manufacturer will warranty because of the
 water quality within a specific location served by the seco