Rep. Kay McIff is introducing legislation for amendments to water rights change applications. The bill is HB 49.
The bill modifies Title 73, Water and Irrigation by amending the requirements for a change application. The bill amends definitions, modifies the procedure for filing a change application and requires parties to mediate issues arising from a change application before administrative review or litigation; provides an option for court resolution of legal issues not within the purview of the state engineer; allows recovery of attorney fees under certain circumstances and makes technical changes.
Rep. McIff met with Emery County irrigation companies and interested parties to go over why he has introduced this bill.
He said the main changes to Title 73 Water and Irrigation is the shareholder shall prepare the change application. This change application is delivered to the water company before it goes to the state engineer. The water company has 60 days to respond. They can either consent to the change; consent with conditions; or decline to consent to the change application.
The packet goes to the state engineer. Within 10 days the state engineer sends notice to the water company. The water company is granted 30 more days to present their reasons why the change application should not be approved.
If an agreement cannot be reached the issue will be mediated and the parties involved will split the costs of the mediation. If the parties cannot agree on a mediator, then the Utah ombudsman may be used as an alternative mediator.
There is a 60 day period for the mediation to take place. This period may be extended to 90 days if proper notice is given.
If an agreement is reached the state engineer will proceed in reviewing the change application.
If the parties cannot reach an agreement then they have 60 days to file on any legal issues.
If there is no filing, or the matter is resolved and remedied then the state engineer will proceed.
The state engineer will rule on the change application. There can also be a De novo review in district court. The attorney fees may be charged to the party that has been deemed unreasonable in the process.
McIff presented the reasoning behind his changes and said they will eliminate stonewalling by water companies and will put all cards on the table; the new process will avoid litigation and will be a fair process to all.
Currently if a change application is prepared and sent to the water company and they don't respond within the allotted time then the answer is basically no and there is no other recourse except litigation. Rep. McIff said litigation is costly and small shareholders can't afford legal action.
He said the water law statute is from 1903 with only minimal changes in all that time. In 2002, 73-3-3.5 was added concerning change application procedure.
McIff said he believes the current law is an invitation for irrigation companies to do nothing with change applications. This needs to be addressed he said because it can leave people hanging for months.
If an agreement is reached and it's sent to the state engineer there is no guarantee he will approve it. He will consider if there is anyone being hurt if the change application is approved. The state engineer must publish a notice stating a change application is being considered. This notice will ask for anyone who disapproves or approves or who wants to make comments to do so. There will be an open comment period. Afterwhich, the state engineer will consider all comments and make his decision.
The part of the law that Rep. McIff is striking is what has local irrigation companies concerned. The shift in who owns the water rights, the shareholder or the company is frightening for irrigation companies. Current law states a water company shall make a decision and provide written notice of that decision on a shareholders request for a change application within 120 days from receipt of the request. Based on the facts and circumstances of each proposed change a water company may take the following action: approve the change request; approve the change request with conditions, or deny the request. If the water company fails to respond to a shareholders request for a change application pursuant to Subsection (3)(a) the failure to respond shall be considered to be a denial of the request. The water company may not withhold approval if any potential damage, liability, or impairment to the water company or its shareholders can be reasonably mitigated without cost to the water company.
Local irrigation companies believe the current law adequately addresses change applications.
Concerns voiced by those in attendance included water leaving the basin. Rep. McIff agreed that the worst thing for us would be to send our water to Las Vegas or St. George. Rep. McIff said Calvin Rampton a former governor of Utah said during his administration he wished he had been less supportive of development of water to flow into the Salt Lake Valley and more supportive of developing water where it is.
The concern was expressed of what the power company would do with the water they will no longer need at the Carbon Plant after it closes in 2015. The group did not want to see that water go over the mountain to Sanpete County. Rep. McIff said it is a big issue, but something like that would probably be litigated. There have been transbasin diversions of water in the past.
One suggestion to prevent stonewalling by water companies was to change the wording to say if the water company didn't respond in the 60 day time frame to a change application, then the change application would be deemed approved. Then so many wording changes would not be needed to Title 73 Water and Irrigation.
Craig Johansen said he sits on the legislative task force for water. They are not in support of HB-49. He said the Farm Bureau doesn't support the bill either. The issue is who owns the water right, the company or the shareholder? This legislation implies that the shareholder holds the water right. As you read the application it's easy for the shareholder to make an application and hard for the company to say no. It can go to the state engineer even if the company says no. This is a major shift in state water law and it will have a detrimental effect. There's a huge difference between Wasatch Front water users and those along the Colorado River. There are 200 million people drinking from the Colorado River. "We need to keep our water rights intact and not destroy them," said Johansen.
Johansen said the Bureau of Reclamation rewrote the contract for the water from Joe's Valley for PacifiCorp. The previous contract was for 40 years and 6,000 acre feet of water. The bureau tried to reach in and take that 6,000 acre feet of water and put it in the hands of the federal government. We need to strengthen, not take away. The power company owns approximately 30 percent of the water shares in each of the rivers, Huntington, Cottonwood and Ferron. That's about 30,000 acre feet of water. In value that's worth $1 billion. Under the proposed legislation, if large shareholders put in a change application to the state engineer there would be no protection for the irrigation company. If that happens here the entire Emery County economy would be destroyed. We would be walking on dangerous water. Pull the bill suggested Johansen.
During the last few years the Bureau of Reclamation has said they own the water right on BOR projects. The BOR has submitted change applications. But, under present law the water companies are required to sign the change applications along with the BOR. The proposed water law change application amendments play into the hands of large shareholders and they will receive the same privileges as small shareholders.
Concerning the contract for the Joe's Valley water for the power plant, the power plant owns the right to the water. They operated under a 40 year contract which was up for renewal last year. It was not renewed, but the current contract was extended for one year and negotiations are still taking place with the BOR to get a new contract in place. Instead of the BOR renewing the former contract, they rewrote the contract. They rewrote with changes that would place the BOR as the titleholder and take the Joe's Valley water out of the hands of the Emery Water Conservancy District.
According to the current water law concerning change applications an irrigation company is in violation if it doesn't approve a change application if there is no good reason not too. That provision is already in place to protect shareholders.
Rep. McIff said he is protective of the water companies. He sees the bill as trying to get parties to resolve things up front without litigation.
Johansen said good water attorneys have examined the bill and they see it as a major change that will shift water rights.
McIff said he is willing to make changes in the bill. Johansen said in our area we don't have the problem of stonewalling.
Rep. McIff said he is very sensitive in making sure what he's doing works. He doesn't want to create problems, but get the issues on the table.
Johansen said, "I think the current law is better than what you've changed."
Johansen said the water task force is made up of several major water districts from the Wasatch Front as well as rural Utah. There are several water law attorneys on the task force as well. The task force reviewed the proposed amendments to change applications by Rep. McIff last year. They were not in favor of the bill, they believe current law adequately protects everyone. They viewed the bill as a bad piece of legislation.
As the Wasatch Front has become more urbanized there have been shifts in where water is used. Water shares have been transferred all up and down the Wasatch Front and Weber as well as Utah counties. This has worked well under the current law. From time to time there is a problem with speculators who purchase up agriculture water and want to transfer it to non-agricultural uses, but for the most part the current law has been effective.
Rep. McIff said the changes in the law will not favor either side, but have both sides represented so it can get to the state engineer and let him decide. The right to ask is not the right to prevail.