H.B. 57 Enrolled

FORFEITED WATER RIGHT ALLOCATION
2002 GENERAL SESSION
STATE OF UTAH
Sponsor: Darin G. Peterson
This act modifies the Water and Irrigation Code to allow a water company to allocate water
rights lost by forfeiture.
This act affects sections of Utah Code Annotated 1953 as follows:
ENACTS:
73-1-4.5, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 73-1-4.5 is enacted to read:
73-1-4.5. Authorization for water companies to allocate water rights lost by forfeiture
or nonuse -- Redemption and retirement of water shares.
(1) (a) If a water right, to which a mutual water company holds title, ceases or is lost due
to forfeiture or abandonment for lack of beneficial use, in whole or in part, the water company
shall, through procedures consistent with this section, and as defined in the company's articles of
incorporation or bylaws, apportion the loss to each stockholder whose failure to make beneficial
use caused the loss of the water right.
(b) The water company shall make an apportionment if the Utah Division of Water Rights
or a court of proper jurisdiction makes a final decision that a loss has occurred.
(c) The water company shall also reduce the amount of water provided to the shareholder
in proportion to the amount of the lost water right during an appeal of a decision that reduced the
company water rights, unless otherwise ordered by a court of proper jurisdiction.
(d) The water company may take any action under this Subsection (1), whether the loss
occurred:
(i) under Utah Code Annotated Section 73-1-4 , including losses that occur as part of a
general determination under Title 73, Chapter 4, Determination of Water Rights; or
(ii) through any other decision by a court of proper jurisdiction.
(2) (a) If the water company apportions a water right under Subsection (1), a sufficient

number of shares to account for the water right lost, including necessary transport or "carrier water"
losses, shall be treated by the water company as shares redeemed by the company from the
stockholder responsible for the loss.
(b) The number of shares owned by that shareholder shall be reduced accordingly on the
records of the company.
(c) Upon the redemption, the authorized shares of the company shall be reduced by the
amount of shares that were redeemed under this Subsection (2).
(3) The redemption and retirement under this section of shares belonging to a stockholder
does not relieve the stockholder of liability for unpaid assessments on the stock or debts the
shareholder may owe to the water company.

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