1. Municipal Water Rights…… Water Law & Policy Seminars March 12, 2012 Kent L. Jones, P.E. State Engineer

2. Article XI, Section 6. [Municipalities forbidden to sell waterworks or rights.] Article XI, Section 6. [Municipalities forbidden to sell waterworks or rights.] No municipal corporation, shall directly or indirectly, lease, sell, alien or dispose of any waterworks, water rights, or sources of water supply now, or hereafter to be owned or controlled by it; but all such waterworks, water rights and sources of water supply now owned or hereafter to be acquired by any municipal corporation, shall be preserved, maintained and operated by it for supplying its inhabitants with water at reasonable charges: Provided, That nothing herein contained shall be construed to prevent any such municipal corporation from exchanging water rights, or sources of water supply, for other water rights or sources of water supply of equal value, and to be devoted in like manner to the public supply of its inhabitants. No municipal corporation, shall directly or indirectly, lease, sell, alien or dispose of any waterworks, water rights, or sources of water supply now, or hereafter to be owned or controlled by it; but all such waterworks, water rights and sources of water supply now owned or hereafter to be acquired by any municipal corporation, shall be preserved, maintained and operated by it for supplying its inhabitants with water at reasonable charges: Provided, That nothing herein contained shall be construed to prevent any such municipal corporation from exchanging water rights, or sources of water supply, for other water rights or sources of water supply of equal value, and to be devoted in like manner to the public supply of its inhabitants.

3. Obtaining a Water Right The same as any other user: The same as any other user: Put to use before the law went into effect, surface -1903; groundwater 1935. Put to use before the law went into effect, surface -1903; groundwater 1935. Have an application approved by the State Engineer Have an application approved by the State Engineer Purchase or otherwise receive a water right from some other water right holder. Purchase or otherwise receive a water right from some other water right holder.

4. Obtaining a Water Right Municipal use is a recognized use under statute. Municipal use is a recognized use under statute. The nature of use of a water right must be approved for municipal use for it to be used as such. The nature of use of a water right must be approved for municipal use for it to be used as such. Conversion of other rights to municipal use will be limited to historic diversion and depletion limitations of the underlying right to prevent enlargement of the right and impairment to the rights of others. Conversion of other rights to municipal use will be limited to historic diversion and depletion limitations of the underlying right to prevent enlargement of the right and impairment to the rights of others.

5. What is a Municipal Use Water Right? A water right that can be used for all those uses that typically occur in a community setting, i.e. A water right that can be used for all those uses that typically occur in a community setting, i.e. Domestic, irrigation, stockwater, commercial, industrial, fire protection, etc. Domestic, irrigation, stockwater, commercial, industrial, fire protection, etc. Uses outside of those typical uses have generally required water rights authorized for specific uses: power generation, snowmaking, and mining. Uses outside of those typical uses have generally required water rights authorized for specific uses: power generation, snowmaking, and mining.

6. What is a Municipal Use Water Right? Historically, municipal use rights have only been granted to municipalities. Historically, municipal use rights have only been granted to municipalities. With the changes in HB 51 in 2008 which extended municipal water right attributes to “public water suppliers”, in December of 2010 the state engineer issued a policy to allow the municipal use water right privilege to be extended to public water suppliers. With the changes in HB 51 in 2008 which extended municipal water right attributes to “public water suppliers”, in December of 2010 the state engineer issued a policy to allow the municipal use water right privilege to be extended to public water suppliers.

7. Municipal use water rights verses a water right held by a municipality or public water supplier? A water right approved for municipal use. A water right approved for municipal use. Water rights held by municipalities or other public water suppliers don’t have to be “municipal” water rights. They can be other uses specifically listed like domestic and irrigation but would still have the public water supplier’s protection for those rights. Water rights held by municipalities or other public water suppliers don’t have to be “municipal” water rights. They can be other uses specifically listed like domestic and irrigation but would still have the public water supplier’s protection for those rights.

8. Water Rights Subject to Forfeiture For Nonuse Since 1888 Utah has had a statute providing for the reversion of water to the public upon abandonment or nonuse. Since 1888 Utah has had a statute providing for the reversion of water to the public upon abandonment or nonuse. The right ceased upon the expiration of the statutory period: 7 years until 1919 and the 5 years after that. The right ceased upon the expiration of the statutory period: 7 years until 1919 and the 5 years after that. 1935 extensions of time to resume use (nonuse) applications instituted. 1935 extensions of time to resume use (nonuse) applications instituted.

9. Discussions on Forfeiture Until 1996, If water was not beneficially used for a period of 5 years it was considered forfeited, it ceased to exist and reverted to the public. It was available for appropriation unless a nonuse application was filed. Until 1996, If water was not beneficially used for a period of 5 years it was considered forfeited, it ceased to exist and reverted to the public. It was available for appropriation unless a nonuse application was filed. In 1996, the law changed to indicate that the forfeiture of a water right had to be a judicial action and if you had been using your water for a period of 15 years, the right was not subject to forfeiture. But it still said if you didn’t use your water for 5 years the right ceased. In 1996, the law changed to indicate that the forfeiture of a water right had to be a judicial action and if you had been using your water for a period of 15 years, the right was not subject to forfeiture. But it still said if you didn’t use your water for 5 years the right ceased.

10. Discussions on Forfeiture In 2008, the forfeiture statute 73-1-4 was again altered. In 2008, the forfeiture statute 73-1-4 was again altered. The 5 year period for nonuse was changed to 7 years and public water suppliers were not subject to forfeiture if the water right was held for the reasonable future water requirements of the public based on a 40-year plan. The 5 year period for nonuse was changed to 7 years and public water suppliers were not subject to forfeiture if the water right was held for the reasonable future water requirements of the public based on a 40-year plan. Several exemptions for nonuse were detailed. Several exemptions for nonuse were detailed. The reference to a water right ceasing was removed from the statute. The reference to a water right ceasing was removed from the statute.

11. Discussions on Forfeiture Public Water Suppliers were defined in 73- 1-4 to be “an entity that supplies water, either directly or indirectly, to the public for municipal, domestic, or industrial use;” Public Water Suppliers were defined in 73- 1-4 to be “an entity that supplies water, either directly or indirectly, to the public for municipal, domestic, or industrial use;” Could be a public entity, a water corporation, a community water system, or a water association. Could be a public entity, a water corporation, a community water system, or a water association.

12. Discussions on Forfeiture If it is a community water system, it must supply water to at least 100 service connections used by year-round residents or serve at least 200 year-round residents. If it is a community water system, it must supply water to at least 100 service connections used by year-round residents or serve at least 200 year-round residents.

13. Discussions on Forfeiture 73-1-4: “When an appropriator or the appropriator’s successor in interest abandons or ceases to use all or a portion of a water right for a period of seven years, the water right or the unused portion of that right is subject to forfeiture … unless the appropriator or the appropriator’s successor in interest files a nonuse application with the state engineer.” 73-1-4: “When an appropriator or the appropriator’s successor in interest abandons or ceases to use all or a portion of a water right for a period of seven years, the water right or the unused portion of that right is subject to forfeiture … unless the appropriator or the appropriator’s successor in interest files a nonuse application with the state engineer.”

14. Discussions on Forfeiture 73-1-4 does not apply to, except as provided in Subsection (2)(g), a water right owned by a public water supplier which is “conserved or held for the reasonable future water requirement of the public, which is determined according to Subsection (2)(f);” 73-1-4 does not apply to, except as provided in Subsection (2)(g), a water right owned by a public water supplier which is “conserved or held for the reasonable future water requirement of the public, which is determined according to Subsection (2)(f);”

15. Discussions on Forfeiture Subsection (2)(f): “The reasonable future water requirement of the public is the amount of water needed in the next 40 years by the persons within the public water supplier’s projected service area based on projected population growth or other water use demand.” Subsection (2)(f): “The reasonable future water requirement of the public is the amount of water needed in the next 40 years by the persons within the public water supplier’s projected service area based on projected population growth or other water use demand.”

16. Discussions on Forfeiture Subsection(2)(g): “For a water right acquired by a public water supplier on or after May 5, 2008, Subsection(2)(e)(vii) applies if: the public water supplier submits a change application under Section 73-3-3; and the state engineer approves the change application.” Subsection(2)(g): “For a water right acquired by a public water supplier on or after May 5, 2008, Subsection(2)(e)(vii) applies if: the public water supplier submits a change application under Section 73-3-3; and the state engineer approves the change application.”

17. Discussions on Forfeiture Intent language with the 2008 changes (HB 51) said these changes are “not intended to change the way the State Engineer evaluates change applications based on historic beneficial use or validate any invalid water rights.” Intent language with the 2008 changes (HB 51) said these changes are “not intended to change the way the State Engineer evaluates change applications based on historic beneficial use or validate any invalid water rights.” This caused a significant concern when the ruling on the Jensen v Jones case was issued in 2011. This caused a significant concern when the ruling on the Jensen v Jones case was issued in 2011. What do we do if a public water supplier wants to buy a right and file a change on a water right for which there is no identifiable beneficial use and would be subject to challenge for forfeiture in court? What do we do if a public water supplier wants to buy a right and file a change on a water right for which there is no identifiable beneficial use and would be subject to challenge for forfeiture in court?

18. Discussions on Extensions Section 73-3-10(5): “The state engineer shall state in any decision approving an application the time within which the construction work must be completed and the water applied to beneficial use.” Section 73-3-10(5): “The state engineer shall state in any decision approving an application the time within which the construction work must be completed and the water applied to beneficial use.” 73-3-16(1): “Sixty days before the date set for the proof of appropriation or proof of change to be made, the state engineer shall notify the applicant by mail when proof of completion of the works and application of the water to a beneficial use is due.” 73-3-16(1): “Sixty days before the date set for the proof of appropriation or proof of change to be made, the state engineer shall notify the applicant by mail when proof of completion of the works and application of the water to a beneficial use is due.”

19. Discussions on Extensions 73-3-12(2)(a) “Within the time set by the state engineer under subsection 73-3- 10(5), an applicant shall: construct works, if necessary; apply the water to beneficial use; and file proof with the state engineer in accordance with section 73-3-16.” 73-3-12(2)(a) “Within the time set by the state engineer under subsection 73-3- 10(5), an applicant shall: construct works, if necessary; apply the water to beneficial use; and file proof with the state engineer in accordance with section 73-3-16.” 73-3-12(2)(c): “An applicant shall file a request for an extension of time on or before the date set for filing proof.” 73-3-12(2)(c): “An applicant shall file a request for an extension of time on or before the date set for filing proof.”

20. Discussions on Extensions 73-3-18: “When an application lapses for failure of the applicant to comply with the provisions of this title or the order of the state engineer, notice of such lapsing shall forthwith be given to the applicant by regular mail. Within 60 days after such notice the state engineer may, upon a showing of reasonable cause, reinstate the application with the date of priority changed to the date of reinstatement.” 73-3-18: “When an application lapses for failure of the applicant to comply with the provisions of this title or the order of the state engineer, notice of such lapsing shall forthwith be given to the applicant by regular mail. Within 60 days after such notice the state engineer may, upon a showing of reasonable cause, reinstate the application with the date of priority changed to the date of reinstatement.”

21. Discussions on Extensions 73-3-12(2)(b): Except as provided by Subsection (4), the state engineer shall extend the time in which an applicant shall comply with Subsection(2)(a) if: 73-3-12(2)(b): Except as provided by Subsection (4), the state engineer shall extend the time in which an applicant shall comply with Subsection(2)(a) if: (i) the date set by the state engineer is not after 50 years from the day on which the application is approved; and (i) the date set by the state engineer is not after 50 years from the day on which the application is approved; and (ii) the applicant shows: (ii) the applicant shows:

22. Discussions on Extensions “(A) reasonable and due diligence in completing the appropriation; or “(A) reasonable and due diligence in completing the appropriation; or (B) a reasonable cause for delay in completing the appropriation.” (B) a reasonable cause for delay in completing the appropriation.”

23. Discussions on Extensions (2)(h) “The state engineer shall consider the holding of an approved application by a public water supplier… to meet the reasonable future water … requirements of the public to be reasonable and due diligence in completing the appropriation for the purposes of this section for 50 years from the date on which the application is approved.” (2)(h) “The state engineer shall consider the holding of an approved application by a public water supplier… to meet the reasonable future water … requirements of the public to be reasonable and due diligence in completing the appropriation for the purposes of this section for 50 years from the date on which the application is approved.”

24. Discussions on Extensions (2)(h)(i) If the state engineer finds unreasonable delay or lack of reasonable and due diligence the state engineer may deny the extension of time or grant the request in part or upon conditions, including a reduction of the priority. (2)(h)(i) If the state engineer finds unreasonable delay or lack of reasonable and due diligence the state engineer may deny the extension of time or grant the request in part or upon conditions, including a reduction of the priority. (3) If proof is not filed within 50 years the application shall lapse with some exemptions. (3) If proof is not filed within 50 years the application shall lapse with some exemptions.

25. Discussions on Extensions (4)(a) If the works are constructed, extensions may be granted beyond the 50 years to submit proof. (4)(a) If the works are constructed, extensions may be granted beyond the 50 years to submit proof. (4)(b) Extensions MAY be granted after 50 years if the applicant is a public water supplier and provides information that shows the water applied for in the application is needed to meet the reasonable future requirements of the public. (4)(b) Extensions MAY be granted after 50 years if the applicant is a public water supplier and provides information that shows the water applied for in the application is needed to meet the reasonable future requirements of the public. Information provided shall be in accordance with 73-1-4(2)(f). (40-year plan) Information provided shall be in accordance with 73-1-4(2)(f). (40-year plan)

26. Discussions on Extensions (4)(c) The state engineer SHALL extend the time after 50 years if requirements of (4)(b) are met and the applicant has constructed the works to apply the water to beneficial use; or made substantial expenditures to construct the works. (4)(c) The state engineer SHALL extend the time after 50 years if requirements of (4)(b) are met and the applicant has constructed the works to apply the water to beneficial use; or made substantial expenditures to construct the works. 40-year plan should be submitted with the extension request. 40-year plan should be submitted with the extension request.

27. Proving Up on Municipal Water Rights 73-3-17 Upon it being made to appear to the satisfaction of the state engineer that the appropriation or change has been perfected and that the water has been put to beneficial use… the state engineer shall issue a certificate. 73-3-17 Upon it being made to appear to the satisfaction of the state engineer that the appropriation or change has been perfected and that the water has been put to beneficial use… the state engineer shall issue a certificate.

28. Proving Up on Municipal Water Rights Historically, municipal proofs have being submitted and were certificated based on a cfs flow. These rights will be listed as “unevaluated” and will show the flow rate but will not reflect an acre-foot amount. Historically, municipal proofs have being submitted and were certificated based on a cfs flow. These rights will be listed as “unevaluated” and will show the flow rate but will not reflect an acre-foot amount.

29. Proving Up on Municipal Water Rights Water must be put to beneficial use and proof submitted by the due date. Water must be put to beneficial use and proof submitted by the due date. Proof should reflect those amounts of water that have been put to beneficial use in an acre-foot amount. A cfs flow can also be listed. Proof should reflect those amounts of water that have been put to beneficial use in an acre-foot amount. A cfs flow can also be listed. The applicant would only prove up on an acre-foot amount that is above and beyond what is already perfected. The applicant would only prove up on an acre-foot amount that is above and beyond what is already perfected.

30. Proving Up on Municipal Water Rights Those portions of a water right not put to beneficial use should be segregated and have an extension filed on them to protect the balance of the right until it is actually put to beneficial use. Those portions of a water right not put to beneficial use should be segregated and have an extension filed on them to protect the balance of the right until it is actually put to beneficial use.

31. Proving Up on Municipal Water Rights 3 water rights – 400 ac-ft each. 3 water rights – 400 ac-ft each. 3 separate well sources. 3 separate well sources. Actual beneficial use is 400 ac-ft. Actual beneficial use is 400 ac-ft. 1 of the sources is perfected for 400 ac-ft. 1 of the sources is perfected for 400 ac-ft. All sources may be used but the 400 ac-ft of beneficial use could not be used to prove up on 400 ac-ft for each water right which would total 1200 ac-ft. All sources may be used but the 400 ac-ft of beneficial use could not be used to prove up on 400 ac-ft for each water right which would total 1200 ac-ft.

32. Proving Up on Municipal Water Rights For water rights held by a public water supplier which are not municipal rights, proof would have to show the actual beneficial uses to which the water used for. i.e. houses, animals, irrigated acres, etc. For water rights held by a public water supplier which are not municipal rights, proof would have to show the actual beneficial uses to which the water used for. i.e. houses, animals, irrigated acres, etc. Or, they could be converted to municipal use and when proof is submitted, evidence would have to be shown that the historical diversion and depletion limits have not been exceeded. Or, they could be converted to municipal use and when proof is submitted, evidence would have to be shown that the historical diversion and depletion limits have not been exceeded.

33. Questions Questions?