Section 1. Section 16-6a-606 is amended to read:16-6a-606. Transfers.(1)Except as provided in Subsection (3), and unless otherwise provided in the articles of incorporation or the bylaws, a member of a nonprofit corporation may not transfer:(a)a membership; or(b)any right arising from a membership.(2)Except as provided in Subsection (3), where transfer rights have been provided in the articles of incorporation or the bylaws of a nonprofit corporation, a restriction on transfer rights may not be binding with respect to a member holding a membership issued before the adoption of the restriction, unless the restriction is approved by the affected member.(3)(a)For a water company, unless otherwise provided by the articles of incorporation or bylaws,:(i) ownership of sharesa share is transferrable.; and(ii)notwithstanding Subsection (3)(a)(i):(A)a shareholder may not transfer a share on or after May 14, 2013, except in accordance with Title 70A, Chapter 8, Uniform Commercial Code - Investment Securities; and(B)a share is not appurtenant to land.(b)Any A restriction on the transfer of ownership under Subsection (3)(a)(3)(a)(i):(i)shall be reasonable;(ii)shall be adopted in good faith and for a legitimate purpose;(iii)shall be adopted in the best interest of the water company and itsthe water company's shareholders; and(iv)may not discriminate against anyan individual shareholder or class of shareholders, but in a water company where there are classes or divisions of stock, restrictions may differ between the classes or divisions.(c)A person who receives a water company share transferred under this section assumes the obligation for any unpaid assessment related to the share.(d)When by way of a water company's articles of incorporation or bylaws the water company designates a specific unit of land or location on the unit of land to which the water company delivers water, the designation obligates the water company to deliver water only to the unit of land or location so designated unless the water company consents in writing for the water to be delivered to a different unit of land or a different location.(c)(e)Nothing in this section is intended to alter any right or remedy a shareholder may have under Sections 16-6a-612, 16-6a-808, 16-6a-809, 16-6a-822, 16-6a-824, and 16-6a-825, or any other applicable law.

Section 2. Section 73-1-10 is amended to read:73-1-10. Conveyance of water rights -- Deed -- Exceptions -- Filing and recording of deed -- Report of water right conveyance.(1)(a)A water rightperson shall transfer a water right by deed in substantially the same manner as real estate, whether the water right is evidenced by:(i) a decree,;(ii) a certificate of appropriation,;(iii) a diligence claim to the use of surface or underground water, filed with the state engineer in accordance with Section 73-5-13 or as otherwise provided by law; or (iv)a water user's claim filed in general determination proceedings, shall be transferred by deed in substantially the same manner as is real estate.(b)The deed must be recorded A person shall record the deed described in Subsection (1)(a) in the office of the recorder of:(i) the county where the point of diversion of the water is located; and in (ii)the county where the water is used.(c)A recorded deed of a water right shall from the time of itsthe deed's recording in the office of the county recorder constitute notice of itsthe recorded deed's contents to all persons.(d)(i)Beginning July 1, 2011, a deed under Subsection (1)(a) may include a water rights addendum as provided in Section 57-3-109.(ii)The state engineer shall consider a water rights addendum that is recorded and forwarded to the state engineer by a county recorder, in accordance with Section 57-3-109, as a submitted report of water right conveyance under Subsection (3).(2)(a)A transfer of ownership of a share of stock in a water company, as defined in Section 16-4-102, is accomplished only in accordance with Section 16-6a-606.(i)The records of a water company, and not the records of the state engineer, determine a person's ownership of a share of stock in the water company.(2)The right to the use of water evidenced by shares of stock in a corporation shall be transferred in accordance with the procedures applicable to securities set forth in Title 70A, Chapter 8, Uniform Commercial Code - Investment Securities.(3)(a)To update water right ownership on the records of the state engineer, a water right owner shall submit a report of water right conveyance to the state engineer.(b)The report of water right conveyance shall be on forms provided by the state engineer.(c)The report shall be prepared by:(i)or prepared under the direction of and certified by, any of the following persons licensed in Utah:(A)an attorney;(B)a professional engineer;(C)a title insurance producer; or(D)a professional land surveyor; or(ii)the water right owner as authorized by rule of the state engineer.(d)The filing and processing of a report of water right conveyance with the state engineer is neither an adjudication of water right ownership nor an opinion as to title or validity of the water right.(e)The state engineer shall adoptmake rules, in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, that specify:(i)the information required in a report of water right conveyance; and(ii)the procedures for processing the reportsa report of water right conveyance.

Section 3. Section 73-1-11 is amended to read:73-1-11. Appurtenant water rights pass to grantee of land -- Exceptions -- Conveyance of a portion of irrigated land -- Right to the use of water evidenced by shares of stock -- Appurtenant water rights -- Evidence -- Where appurtenant -- Partial conveyances of water and land.(1)(a)A water right appurtenant to land shall passpasses to the grantee of the land unless the grantor:(i)specifically reserves the water right or any part of the water right in the land conveyance document;(ii)conveys a part of the water right in the land conveyance document; or(iii)conveys the water right in a separate conveyance document prior tobefore or contemporaneously with the execution of the land conveyance document.(b)If a county recorder records a document that conveys a water right appurtenant to land as described in Subsection (1)(a) and relies on the document to maintain a tract index described in Section 17-71-302, the state engineer shall rely on the document as an effective conveyance of a water right appurtenant to land.(2)(a)If the water right has been exercisedbeneficially used in irrigating different parcels of land at different times, it shall pass to the grantee of a parcel of land on which the water right was exercisedbeneficially used next preceding the time the land conveyance was executed.(b)Subsection (2)(a) applies only to land conveyances executed before May 4, 1998.(3)In any conveyance, the grantee assumes the obligation for any unpaid assessment described in Subsection 73-5-1(3).(4)(a)The right to the use of water evidenced by shares of stock in a corporation A share of stock in a water company, as defined in Section 16-4-102:(i)is not a water right;(ii)unless specifically provided for in Section 16-6a-606, is not appurtenant to land.; and(iii)is transferred only as provided in Section 16-6a-606.(b)A person may not use a share of stock in a water company, as defined in Section 16-4-102, for which the water company designates a specific unit of land or a location on a specific unit of land where the water company delivers water in accordance with Section 16-6a-606 as the basis for transferring ownership of or changing title to a water right belonging to the water company.(b)On or after May 14, 2013, unless provided otherwise in a corporation's articles of incorporation or bylaws, the right to the use of water evidenced by shares of stock in a corporation shall transfer only as provided in Subsection 73-1-10(2).(5)(a)This Subsection (5) governs land conveyances executed on or after May 4, 1998, and has no retrospective operation.(b)For purposes of land conveyances only, a water right evidenced by any of the following documents is appurtenant to land:(i)a decree entered by a court;(ii)a certificate issued under Section 73-3-17;(iii)a diligence claim for surface or underground water filed pursuant to Section 73-5-13;(iv)a water user's claim executed for general determination of water rights proceedings conducted pursuant to Title 73, Chapter 4, Determination of Water Rights, or pursuant to Section 73-3-16;(v)an approval for an application to appropriate water issued under Section 73-3-10;(vi)an approval for an application to permanently change the place of use of water issued under Section 73-3-10; or(vii)an approval for an application to exchange water issued under Section 73-3-20.(c)For purposes of land conveyances only, the land to which a water right is appurtenant is the authorized place of use of water as described in the:(i)decree;(ii)certificate;(iii)diligence claim;(iv)water user's claim;(v)approved application to appropriate water;(vi)approved application to permanently change the place of use of water; or(vii)approved exchange application.(d)If a grantor conveys part of the water right in a land conveyance document pursuant to Subsection (1)(b), the portion of the water right not conveyed is presumed to be reserved by the grantor.(e)If the land conveyed constitutes only a portion of the authorized place of use for the water right, the amount of the appurtenant water right that passes to the grantee shall be proportionate to the conveyed portion of the authorized place of use.(6)Beginning July 1, 2011, a deed conveying fee simple title to land may include a water rights addendum as provided in Section 57-3-109.

Section 4. Effective Date.This bill takes effect on May 6, 2026.