Chief Sponsor: Stephen G. Handy

Senate Sponsor: ____________


8     General Description:
9          This bill amends definitions related to public entities.
10     Highlighted Provisions:
11          This bill:
12          ▸     provides that an institution of higher education is a public entity; and
13          ▸     makes technical and conforming changes.
14     Money Appropriated in this Bill:
15          None
16     Other Special Clauses:
17          None
18     Utah Code Sections Affected:
19     AMENDS:
20          73-1-4, as last amended by Laws of Utah 2017, Chapter 132

22     Be it enacted by the Legislature of the state of Utah:
23          Section 1. Section 73-1-4 is amended to read:
24          73-1-4. Reversion to the public by abandonment or forfeiture for nonuse within
25     seven years -- Nonuse application.
26          (1) As used in this section:
27          (a) "Public entity" means:

28          (i) the United States;
29          (ii) an agency of the United States;
30          (iii) the state;
31          (iv) a state agency;
32          (v) a political subdivision of the state; [or]
33          (vi) an agency of a political subdivision of the state[.]; or
34          (vii) an institution of higher education that is part of the state system of higher
35     education specifically identified in Section 53B-1-102.
36          (b) "Public water supplier" means an entity that:
37          (i) supplies water, directly or indirectly, to the public for municipal, domestic, or
38     industrial use; and
39          (ii) is:
40          (A) a public entity;
41          (B) a water corporation, as defined in Section 54-2-1, that is regulated by the Public
42     Service Commission;
43          (C) a community water system:
44          (I) that:
45          (Aa) supplies water to at least 100 service connections used by year-round residents; or
46          (Bb) regularly serves at least 200 year-round residents; and
47          (II) whose voting members:
48          (Aa) own a share in the community water system;
49          (Bb) receive water from the community water system in proportion to the member's
50     share in the community water system; and
51          (Cc) pay the rate set by the community water system based on the water the member
52     receives; or
53          (D) a water users association:
54          (I) in which one or more public entities own at least 70% of the outstanding shares; and
55          (II) that is a local sponsor of a water project constructed by the United States Bureau of
56     Reclamation.
57          (c) "Shareholder" means the same as that term is defined in Section 73-3-3.5.
58          (d) "Water company" means the same as that term is defined in Section 73-3-3.5.

59          (e) "Water supply entity" means an entity that supplies water as a utility service or for
60     irrigation purposes and is also:
61          (i) a municipality, water conservancy district, metropolitan water district, irrigation
62     district, or other public agency;
63          (ii) a water company regulated by the Public Service Commission; or
64          (iii) any other owner of a community water system.
65          (2) (a) Except as provided in Subsection (2)(b) or (e), when an appropriator or the
66     appropriator's successor in interest abandons or ceases to beneficially use all or a portion of a
67     water right for a period of at least seven years, the water right or the unused portion of that
68     water right is subject to forfeiture in accordance with Subsection (2)(c).
69          (b) (i) An appropriator or the appropriator's successor in interest may file an
70     application for nonuse with the state engineer.
71          (ii) A nonuse application may be filed on all or a portion of the water right, including
72     water rights held by a water company.
73          (iii) After giving written notice to the water company, a shareholder may file a nonuse
74     application with the state engineer on the water represented by the stock.
75          (iv) (A) The approval of a nonuse application excuses the requirement of beneficial use
76     of water from the date of filing.
77          (B) The time during which an approved nonuse application is in effect does not count
78     toward the seven-year period described in Subsection (2)(a).
79          (v) The filing or approval of a nonuse application or a series of nonuse applications
80     under Subsection (3) does not:
81          (A) constitute beneficial use of a water right;
82          (B) protect a water right that is already subject to forfeiture under this section; or
83          (C) bar a water right owner from:
84          (I) using the water under the water right as permitted under the water right; or
85          (II) claiming the benefit of Subsection (2)(e) or any other forfeiture defense provided
86     by law.
87          (c) (i) Except as provided in Subsection (2)(c)(ii), a water right or a portion of the
88     water right may not be forfeited unless a judicial action to declare the right forfeited is
89     commenced:

90          (A) within 15 years from the end of the latest period of nonuse of at least seven years;
91     or
92          (B) within the combined time of 15 years from the end of the most recent period of
93     nonuse of at least seven years and the time the water right was subject to one or more nonuse
94     applications.
95          (ii) (A) The state engineer, in a proposed determination of rights filed with the court
96     and prepared in accordance with Section 73-4-11, may not assert that a water right was
97     forfeited unless the most recent period of nonuse of seven years ends or occurs:
98          (I) during the 15 years immediately preceding the day on which the state engineer files
99     the proposed determination of rights with the court; or
100          (II) during the combined time immediately preceding the day on which the state
101     engineer files the proposed determination of rights consisting of 15 years and the time the
102     water right was subject to one or more approved nonuse applications.
103          (B) After the day on which a proposed determination of rights is filed with the court a
104     person may not assert that a water right subject to that determination was forfeited before the
105     issuance of the proposed determination, unless the state engineer asserts forfeiture in the
106     proposed determination, or a person, in accordance with Section 73-4-11, makes an objection
107     to the proposed determination that asserts forfeiture.
108          (iii) A water right, found to be valid in a decree entered in an action for general
109     determination of rights under Chapter 4, Determination of Water Rights, is subject to a claim
110     of forfeiture based on a seven-year period of nonuse that begins after the day on which the state
111     engineer filed the related proposed determination of rights with the court, unless the decree
112     provides otherwise.
113          (iv) If in a judicial action a court declares a water right forfeited, on the date on which
114     the water right is forfeited:
115          (A) the right to beneficially use the water reverts to the public; and
116          (B) the water made available by the forfeiture:
117          (I) first, satisfies other water rights in the hydrologic system in order of priority date;
118     and
119          (II) second, may be appropriated as provided in this title.
120          (d) Except as provided in Subsection (2)(e), this section applies whether the unused or

121     abandoned water or a portion of the water is:
122          (i) permitted to run to waste; or
123          (ii) beneficially used by others without right with the knowledge of the water right
124     holder.
125          (e) This section does not apply to:
126          (i) the beneficial use of water according to a lease or other agreement with the
127     appropriator or the appropriator's successor in interest;
128          (ii) a water right if its place of use is contracted under an approved state agreement or
129     federal conservation fallowing program;
130          (iii) those periods of time when a surface water or groundwater source fails to yield
131     sufficient water to satisfy the water right;
132          (iv) a water right when water is unavailable because of the water right's priority date;
133          (v) a water right to store water in a surface reservoir or an aquifer, in accordance with
134     Title 73, Chapter 3b, Groundwater Recharge and Recovery Act, if:
135          (A) the water is stored for present or future beneficial use; or
136          (B) storage is limited by a safety, regulatory, or engineering restraint that the
137     appropriator or the appropriator's successor in interest cannot reasonably correct;
138          (vi) a water right if a water user has beneficially used substantially all of the water right
139     within a seven-year period, provided that this exemption does not apply to the adjudication of a
140     water right in a general determination of water rights under Chapter 4, Determination of Water
141     Rights;
142          (vii) except as provided by Subsection (2)(g), a water right:
143          (A) (I) owned by a public water supplier;
144          (II) represented by a public water supplier's ownership interest in a water company; or
145          (III) to which a public water supplier owns the right of beneficial use; and
146          (B) conserved or held for the reasonable future water requirement of the public, which
147     is determined according to Subsection (2)(f);
148          (viii) a supplemental water right during a period of time when another water right
149     available to the appropriator or the appropriator's successor in interest provides sufficient water
150     so as to not require beneficial use of the supplemental water right; or
151          (ix) a period of nonuse of a water right during the time the water right is subject to an

152     approved change application where the applicant is diligently pursuing certification.
153          (f) (i) The reasonable future water requirement of the public is the amount of water
154     needed in the next 40 years by:
155          (A) the persons within the public water supplier's reasonably anticipated service area
156     based on reasonably anticipated population growth; or
157          (B) other water use demand.
158          (ii) For purposes of Subsection (2)(f)(i), a community water system's reasonably
159     anticipated service area:
160          (A) is the area served by the community water system's distribution facilities; and
161          (B) expands as the community water system expands the distribution facilities in
162     accordance with Title 19, Chapter 4, Safe Drinking Water Act.
163          (g) For a water right acquired by a public water supplier on or after May 5, 2008,
164     Subsection (2)(e)(vii) applies if:
165          (i) the public water supplier submits a change application under Section 73-3-3; and
166          (ii) the state engineer approves the change application.
167          (3) (a) The state engineer shall furnish a nonuse application form requiring the
168     following information:
169          (i) the name and address of the applicant;
170          (ii) a description of the water right or a portion of the water right, including the point of
171     diversion, place of use, and priority;
172          (iii) the quantity of water;
173          (iv) the period of use;
174          (v) the extension of time applied for;
175          (vi) a statement of the reason for the nonuse of the water; and
176          (vii) any other information that the state engineer requires.
177          (b) (i) Upon receipt of the application, the state engineer shall publish a notice of the
178     application once a week for two successive weeks:
179          (A) in a newspaper of general circulation in the county in which the source of the water
180     supply is located and where the water is to be beneficially used; and
181          (B) as required in Section 45-1-101.
182          (ii) The notice shall:

183          (A) state that an application has been made; and
184          (B) specify where the interested party may obtain additional information relating to the
185     application.
186          (c) Any interested person may file a written protest with the state engineer against the
187     granting of the application:
188          (i) within 20 days after the notice is published, if the adjudicative proceeding is
189     informal; and
190          (ii) within 30 days after the notice is published, if the adjudicative proceeding is
191     formal.
192          (d) In [any proceedings] a proceeding to determine whether the nonuse application
193     should be approved or rejected, the state engineer shall follow [the procedures and
194     requirements of] Title 63G, Chapter 4, Administrative Procedures Act.
195          (e) After further investigation, the state engineer may approve or reject the application.
196          (4) (a) The state engineer shall grant a nonuse application on all or a portion of a water
197     right for a period of time not exceeding seven years if the applicant shows a reasonable cause
198     for nonuse.
199          (b) A reasonable cause for nonuse includes:
200          (i) a demonstrable financial hardship or economic depression;
201          (ii) physical causes or changes that render use beyond the reasonable control of the
202     water right owner so long as the water right owner acts with reasonable diligence to resume or
203     restore the use;
204          (iii) the initiation of water conservation or efficiency practices, or the operation of a
205     groundwater recharge recovery program approved by the state engineer;
206          (iv) operation of legal proceedings;
207          (v) the holding of a water right or stock in a mutual water company without use by any
208     water supply entity to meet the reasonable future requirements of the public;
209          (vi) situations where, in the opinion of the state engineer, the nonuse would assist in
210     implementing an existing, approved water management plan; or
211          (vii) the loss of capacity caused by deterioration of the water supply or delivery
212     equipment if the applicant submits, with the application, a specific plan to resume full use of
213     the water right by replacing, restoring, or improving the equipment.

214          (5) (a) Sixty days before the expiration of a nonuse application, the state engineer shall
215     notify the applicant by mail or by [any] a form of electronic communication through which
216     receipt is verifiable, of the date when the nonuse application will expire.
217          (b) An applicant may file a subsequent nonuse application in accordance with this
218     section.