Enrolled Copy S.B. 26
1 WATER BANKING AMENDMENTS
2 2020 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Jani Iwamoto
5 House Sponsor: Timothy D. Hawkes
6 Cosponsors: Ralph Okerlund
7 David P. Hinkins
8
9 LONG TITLE
10 General Description:
11 This bill addresses transactional water right banking.
12 Highlighted Provisions:
13 This bill:
14 < authorizes the Board of Water Resources, the state engineer, and the Division of
15 Water Resources to implement water banking;
16 < enacts the Water Banking Act, including:
17 C defining terms;
18 C outlining the objectives of a water right banking system;
19 C providing the scope of the chapter;
20 C addressing assistance by the Division of Water Resources;
21 C addressing fees;
22 C outlining how statutory water banks are established and amended;
23 C outlining how contract water banks are established and amended;
24 C requiring annual reports to the Board of Water Resources;
25 C addressing default of a water bank and revocation of a water bank;
26 C providing for the banking of water rights;
27 C addressing condemnation of banked water rights;
28 C addressing delivery request for loaned water rights in water banks;
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29 C addressing the enforcement powers of the state engineer; and
30 C imposing reporting procedures on the board and the Department of Natural
31 Resources;
32 < provides for a repeal date of the water banking provisions;
33 < specifies that water rights deposited in a water bank are not subject to abandonment
34 or forfeiture while approved for use in a water bank; and
35 < makes technical and conforming amendments.
36 Money Appropriated in this Bill:
37 None
38 Other Special Clauses:
39 None
40 Utah Code Sections Affected:
41 AMENDS:
42 63I-1-273, as last amended by Laws of Utah 2019, Chapters 96 and 246
43 73-1-4, as last amended by Laws of Utah 2017, Chapter 132
44 73-10-4, as last amended by Laws of Utah 1969, Chapter 198
45 ENACTS:
46 73-31-101, Utah Code Annotated 1953
47 73-31-102, Utah Code Annotated 1953
48 73-31-103, Utah Code Annotated 1953
49 73-31-104, Utah Code Annotated 1953
50 73-31-105, Utah Code Annotated 1953
51 73-31-106, Utah Code Annotated 1953
52 73-31-107, Utah Code Annotated 1953
53 73-31-201, Utah Code Annotated 1953
54 73-31-202, Utah Code Annotated 1953
55 73-31-203, Utah Code Annotated 1953
56 73-31-204, Utah Code Annotated 1953
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57 73-31-205, Utah Code Annotated 1953
58 73-31-206, Utah Code Annotated 1953
59 73-31-301, Utah Code Annotated 1953
60 73-31-302, Utah Code Annotated 1953
61 73-31-303, Utah Code Annotated 1953
62 73-31-304, Utah Code Annotated 1953
63 73-31-305, Utah Code Annotated 1953
64 73-31-401, Utah Code Annotated 1953
65 73-31-402, Utah Code Annotated 1953
66 73-31-501, Utah Code Annotated 1953
67 73-31-502, Utah Code Annotated 1953
68 73-31-503, Utah Code Annotated 1953
69 73-31-601, Utah Code Annotated 1953
70
71 Be it enacted by the Legislature of the state of Utah:
72 Section 1. Section 63I-1-273 is amended to read:
73 63I-1-273. Repeal dates, Title 73.
74 (1) In relation to the Legislative Water Development Commission, on January 1, 2021:
75 [(1)] (a) in Subsection 73-10g-105(3), the language that states "and in consultation
76 with the State Water Development Commission created in Section 73-27-102" is repealed;
77 [(2)] (b) Subsection 73-10g-203(4)(a) is repealed; and
78 [(3)] (c) Title 73, Chapter 27, State Water Development Commission, is repealed.
79 (2) In relation to Title 73, Chapter 31, Water Banking Act, on December 31, 2030:
80 (a) Subsection 73-1-4(2)(e)(x) is repealed;
81 (b) Subsection 73-10-4(1)(h) is repealed; and
82 (c) Title 73, Chapter 31, Water Banking Act, is repealed.
83 Section 2. Section 73-1-4 is amended to read:
84 73-1-4. Reversion to the public by abandonment or forfeiture for nonuse within
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85 seven years -- Nonuse application.
86 (1) As used in this section:
87 (a) "Public entity" means:
88 (i) the United States;
89 (ii) an agency of the United States;
90 (iii) the state;
91 (iv) a state agency;
92 (v) a political subdivision of the state; or
93 (vi) an agency of a political subdivision of the state.
94 (b) "Public water supplier" means an entity that:
95 (i) supplies water, directly or indirectly, to the public for municipal, domestic, or
96 industrial use; and
97 (ii) is:
98 (A) a public entity;
99 (B) a water corporation, as defined in Section 54-2-1, that is regulated by the Public
100 Service Commission;
101 (C) a community water system:
102 (I) that:
103 (Aa) supplies water to at least 100 service connections used by year-round residents; or
104 (Bb) regularly serves at least 200 year-round residents; and
105 (II) whose voting members:
106 (Aa) own a share in the community water system;
107 (Bb) receive water from the community water system in proportion to the member's
108 share in the community water system; and
109 (Cc) pay the rate set by the community water system based on the water the member
110 receives; or
111 (D) a water users association:
112 (I) in which one or more public entities own at least 70% of the outstanding shares; and
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113 (II) that is a local sponsor of a water project constructed by the United States Bureau of
114 Reclamation.
115 (c) "Shareholder" means the same as that term is defined in Section 73-3-3.5.
116 (d) "Water company" means the same as that term is defined in Section 73-3-3.5.
117 (e) "Water supply entity" means an entity that supplies water as a utility service or for
118 irrigation purposes and is also:
119 (i) a municipality, water conservancy district, metropolitan water district, irrigation
120 district, or other public agency;
121 (ii) a water company regulated by the Public Service Commission; or
122 (iii) any other owner of a community water system.
123 (2) (a) Except as provided in Subsection (2)(b) or (e), when an appropriator or the
124 appropriator's successor in interest abandons or ceases to beneficially use all or a portion of a
125 water right for a period of at least seven years, the water right or the unused portion of that
126 water right is subject to forfeiture in accordance with Subsection (2)(c).
127 (b) (i) An appropriator or the appropriator's successor in interest may file an
128 application for nonuse with the state engineer.
129 (ii) A nonuse application may be filed on all or a portion of the water right, including
130 water rights held by a water company.
131 (iii) After giving written notice to the water company, a shareholder may file a nonuse
132 application with the state engineer on the water represented by the stock.
133 (iv) (A) The approval of a nonuse application excuses the requirement of beneficial use
134 of water from the date of filing.
135 (B) The time during which an approved nonuse application is in effect does not count
136 toward the seven-year period described in Subsection (2)(a).
137 (v) The filing or approval of a nonuse application or a series of nonuse applications
138 under Subsection (3) does not:
139 (A) constitute beneficial use of a water right;
140 (B) protect a water right that is already subject to forfeiture under this section; or
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141 (C) bar a water right owner from:
142 (I) using the water under the water right as permitted under the water right; or
143 (II) claiming the benefit of Subsection (2)(e) or any other forfeiture defense provided
144 by law.
145 (c) (i) Except as provided in Subsection (2)(c)(ii), a water right or a portion of the
146 water right may not be forfeited unless a judicial action to declare the right forfeited is
147 commenced:
148 (A) within 15 years from the end of the latest period of nonuse of at least seven years;
149 or
150 (B) within the combined time of 15 years from the end of the most recent period of
151 nonuse of at least seven years and the time the water right was subject to one or more nonuse
152 applications.
153 (ii) (A) The state engineer, in a proposed determination of rights filed with the court
154 and prepared in accordance with Section 73-4-11, may not assert that a water right was
155 forfeited unless the most recent period of nonuse of seven years ends or occurs:
156 (I) during the 15 years immediately preceding the day on which the state engineer files
157 the proposed determination of rights with the court; or
158 (II) during the combined time immediately preceding the day on which the state
159 engineer files the proposed determination of rights consisting of 15 years and the time the
160 water right was subject to one or more approved nonuse applications.
161 (B) After the day on which a proposed determination of rights is filed with the court a
162 person may not assert that a water right subject to that determination was forfeited before the
163 issuance of the proposed determination, unless the state engineer asserts forfeiture in the
164 proposed determination, or a person, in accordance with Section 73-4-11, makes an objection
165 to the proposed determination that asserts forfeiture.
166 (iii) A water right, found to be valid in a decree entered in an action for general
167 determination of rights under Chapter 4, Determination of Water Rights, is subject to a claim
168 of forfeiture based on a seven-year period of nonuse that begins after the day on which the state
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169 engineer filed the related proposed determination of rights with the court, unless the decree
170 provides otherwise.
171 (iv) If in a judicial action a court declares a water right forfeited, on the date on which
172 the water right is forfeited:
173 (A) the right to beneficially use the water reverts to the public; and
174 (B) the water made available by the forfeiture:
175 (I) first, satisfies other water rights in the hydrologic system in order of priority date;
176 and
177 (II) second, may be appropriated as provided in this title.
178 (d) Except as provided in Subsection (2)(e), this section applies whether the unused or
179 abandoned water or a portion of the water is:
180 (i) permitted to run to waste; or
181 (ii) beneficially used by others without right with the knowledge of the water right
182 holder.
183 (e) This section does not apply to:
184 (i) the beneficial use of water according to a lease or other agreement with the
185 appropriator or the appropriator's successor in interest;
186 (ii) a water right if its place of use is contracted under an approved state agreement or
187 federal conservation fallowing program;
188 (iii) those periods of time when a surface water or groundwater source fails to yield
189 sufficient water to satisfy the water right;
190 (iv) a water right when water is unavailable because of the water right's priority date;
191 (v) a water right to store water in a surface reservoir or an aquifer, in accordance with
192 Title 73, Chapter 3b, Groundwater Recharge and Recovery Act, if:
193 (A) the water is stored for present or future beneficial use; or
194 (B) storage is limited by a safety, regulatory, or engineering restraint that the
195 appropriator or the appropriator's successor in interest cannot reasonably correct;
196 (vi) a water right if a water user has beneficially used substantially all of the water right
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197 within a seven-year period, provided that this exemption does not apply to the adjudication of a
198 water right in a general determination of water rights under Chapter 4, Determination of Water
199 Rights;
200 (vii) except as provided by Subsection (2)(g), a water right:
201 (A) (I) owned by a public water supplier;
202 (II) represented by a public water supplier's ownership interest in a water company; or
203 (III) to which a public water supplier owns the right of beneficial use; and
204 (B) conserved or held for the reasonable future water requirement of the public, which
205 is determined according to Subsection (2)(f);
206 (viii) a supplemental water right during a period of time when another water right
207 available to the appropriator or the appropriator's successor in interest provides sufficient water
208 so as to not require beneficial use of the supplemental water right; [or]
209 (ix) a period of nonuse of a water right during the time the water right is subject to an
210 approved change application where the applicant is diligently pursuing certification[.]; or
211 (x) a water right subject to an approved change application for use within a water bank
212 that has been authorized but not dissolved under Chapter 31, Water Banking Act, during the
213 period of time the state engineer authorizes the water right to be used within the water bank.
214 (f) (i) The reasonable future water requirement of the public is the amount of water
215 needed in the next 40 years by:
216 (A) the persons within the public water supplier's reasonably anticipated service area
217 based on reasonably anticipated population growth; or
218 (B) other water use demand.
219 (ii) For purposes of Subsection (2)(f)(i), a community water system's reasonably
220 anticipated service area:
221 (A) is the area served by the community water system's distribution facilities; and
222 (B) expands as the community water system expands the distribution facilities in
223 accordance with Title 19, Chapter 4, Safe Drinking Water Act.
224 (g) For a water right acquired by a public water supplier on or after May 5, 2008,
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225 Subsection (2)(e)(vii) applies if:
226 (i) the public water supplier submits a change application under Section 73-3-3; and
227 (ii) the state engineer approves the change application.
228 (3) (a) The state engineer shall furnish a nonuse application form requiring the
229 following information:
230 (i) the name and address of the applicant;
231 (ii) a description of the water right or a portion of the water right, including the point of
232 diversion, place of use, and priority;
233 (iii) the quantity of water;
234 (iv) the period of use;
235 (v) the extension of time applied for;
236 (vi) a statement of the reason for the nonuse of the water; and
237 (vii) any other information that the state engineer requires.
238 (b) (i) Upon receipt of the application, the state engineer shall publish a notice of the
239 application once a week for two successive weeks:
240 (A) in a newspaper of general circulation in the county in which the source of the water
241 supply is located and where the water is to be beneficially used; and
242 (B) as required in Section 45-1-101.
243 (ii) The notice shall:
244 (A) state that an application has been made; and
245 (B) specify where the interested party may obtain additional information relating to the
246 application.
247 (c) [Any] An interested person may file a written protest with the state engineer against
248 the granting of the application:
249 (i) within 20 days after the notice is published, if the adjudicative proceeding is
250 informal; and
251 (ii) within 30 days after the notice is published, if the adjudicative proceeding is
252 formal.
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