Senator Michael K. McKell proposes the following substitute bill:




Chief Sponsor: Michael K. McKell

House Sponsor: Timothy D. Hawkes


8     General Description:
9          This bill addresses issues related to water.
10     Highlighted Provisions:
11          This bill:
12          ▸     addresses secondary water metering;
13          ▸     directs the Legislative Water Development Commission to support the development
14     of a unified, statewide water strategy to promote water conservation and efficiency;
15     and
16          ▸     makes technical changes.
17     Money Appropriated in this Bill:
18          This bill appropriates in fiscal year 2022:
19          ▸     to the Department of Natural Resources - Division of Water Resources, as an
20     ongoing appropriation:
21               •     from the General Fund, $2,000,000.
22     Other Special Clauses:
23          None
24     Utah Code Sections Affected:
25     AMENDS:

26          73-10-34, as last amended by Laws of Utah 2020, Chapter 350
27          73-27-103, as last amended by Laws of Utah 2020, Chapter 28

29     Be it enacted by the Legislature of the state of Utah:
30          Section 1. Section 73-10-34 is amended to read:
31          73-10-34. Secondary water metering.
32          (1) As used in this section:
33          (a) (i) "Commercial user" means a secondary water user that is a place of business.
34          (ii) "Commercial user" does not include a multi-family residence, an agricultural user,
35     or a customer that falls within the industrial or institutional classification.
36          (b) (i) "Industrial user" means a secondary water user that manufactures or produces
37     materials.
38          (ii) "Industrial user" includes a manufacturing plant, an oil and gas producer, and a
39     mining company.
40          (c) (i) "Institutional user" means a secondary water user that is dedicated to public
41     service, regardless of ownership.
42          (ii) "Institutional user" includes a school, church, hospital, park, golf course, and
43     government facility.
44          (d) (i) "Residential user" means a secondary water user in a residence.
45          (ii) "Residential user" includes a single-family or multi-family home, apartment,
46     duplex, twin home, condominium, or planned community.
47          (e) "Secondary water" means water that is:
48          (i) not culinary or water used on land assessed under Title 59, Chapter 2, Part 5,
49     Farmland Assessment Act; and
50          (ii) delivered to and used by an end [consumer] user for the irrigation of landscaping or
51     a garden.
52          (f) "Secondary water supplier" means an entity that supplies pressurized secondary
53     water.
54          (g) "Small secondary water retail supplier" means an entity that:
55          (i) supplies pressurized secondary water only to the end user of the secondary water;
56     and

57          (ii) (A) is a city, town, or metro township; or
58          (B) supplies 8,000 or fewer connections.
59          (2) (a) A secondary water supplier that begins design work for new service on or after
60     April 1, 2020, to a commercial, industrial, institutional, or residential user shall meter the use
61     of pressurized secondary water by the users receiving that new service.
62          (b) Beginning January 1, 2022, a secondary water supplier shall establish a meter
63     installation reserve for metering installation and replacement projects.
64          (c) A secondary water supplier, including a small secondary water retail supplier, may
65     not raise the rates charged for secondary water:
66          (i) by more than 10% in a calendar year for costs associated with metering secondary
67     water unless the rise in rates is necessary because the secondary water supplier experiences a
68     catastrophic failure or other similar event; and
69          (ii) unless, before raising the rates on the end user, the entity charging the end user
70     provides a statement explaining the basis for why the needs of the secondary water supplier
71     required an increase in rates.
72          (d) (i) A secondary water supplier that provides pressurized secondary water to a
73     commercial, industrial, institutional, or residential user shall develop a plan, or if the secondary
74     water supplier previously filed a similar plan, update the plan for metering the use of the
75     pressurized water.
76          (ii) The plan required by this Subsection (2)(d) shall be filed or updated with the
77     Division of Water Resources by no later than December 31, 2025, and address the process the
78     secondary water supplier will follow to implement metering, including:
79          (A) the costs of full metering by the secondary water supplier;
80          (B) how long it would take the secondary water supplier to complete full metering by
81     no later than December 31, 2040, including an anticipated beginning date and completion date;
82     and
83          (C) how the secondary water supplier will finance metering.
84          (3) A secondary water supplier shall on or before March 31 of each year, report to the
85     Division of Water Rights:
86          (a) for commercial, industrial, institutional, and residential users whose pressurized
87     secondary water use is metered, the number of acre feet of pressurized secondary water the

88     secondary water supplier supplied to the commercial, industrial, institutional, and residential
89     users during the preceding 12-month period;
90          (b) the number of secondary water meters within the secondary water supplier's service
91     boundary;
92          (c) a description of the secondary water supplier's service boundary;
93          (d) the number of connections in each of the following categories through which the
94     secondary water supplier supplies pressurized secondary water:
95          (i) commercial;
96          (ii) industrial;
97          (iii) institutional; and
98          (iv) residential;
99          (e) the total volume of water that the secondary water supplier receives from [its] the
100     secondary water supplier's sources; and
101          (f) the dates of service during the preceding 12-month period in which the secondary
102     water supplier supplied pressurized secondary water.
103          (4) (a) Beginning July 1, 2019, the Board of Water Resources may make up to
104     $10,000,000 in low-interest loans available each year:
105          (i) from the Water Resources Conservation and Development Fund, created in Section
106     73-10-24; and
107          (ii) for financing the cost of secondary water metering.
108          (b) The Division of Water Resources and the Board of Water Resources shall make
109     rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
110     establishing the criteria and process for receiving a loan described in this Subsection (4), except
111     the rules may not include prepayment penalties.
112          (5) (a) Beginning July 1, 2021, subject to appropriation, the Division of Water
113     Resources may make matching grants each year for financing the cost of secondary water
114     metering for a commercial, industrial, institutional, or residential user by a small secondary
115     water retail supplier that:
116          (i) is not for new service described in Subsection (2)(a); and
117          (ii) matches the amount of the grant.
118          (b) For purposes of issuing grants under this section, the division shall prioritize the

119     small secondary water retail suppliers that can demonstrate the greatest need or greatest
120     inability to pay the entire cost of installing secondary water meters.
121          (c) The amount of a grant under this Subsection (5) may not:
122          (i) exceed 50% of the small secondary water retail supplier's cost of installing
123     secondary water meters; or
124          (ii) supplant federal, state, or local money previously allocated to pay the small
125     secondary water retail supplier's cost of installing secondary water meters.
126          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
127     Board of Water Resources shall make rules establishing:
128          (i) the procedure for applying for a grant under this Subsection (5); and
129          (ii) how a small secondary water retail supplier can establish that the small secondary
130     water retail supplier meets the eligibility requirements of this Subsection (5).
131          [(5)] (6) This section does not apply to a secondary water supplier to the extent that:
132          (a) the secondary water supplier supplies secondary water within a county of the third,
133     fourth, fifth, or sixth class; or
134          (b) there is no meter that a meter manufacturer will warranty because of the water
135     quality within a specific location.
136          [(6)] (7) Nothing in this section affects a water right holder's obligation to measure and
137     report water usage as described in Sections 73-5-4 and 73-5-8.
138          Section 2. Section 73-27-103 is amended to read:
139          73-27-103. Duties and powers of commission.
140          (1) The commission shall consider and make recommendations to the Legislature and
141     governor on the following issues:
142          (a) how the water needs of the state's growing agricultural, municipal, and industrial
143     sectors will be met;
144          (b) what the impact of federal regulations and legislation will be on the ability of the
145     state to manage and develop its compacted water rights;
146          (c) how the state will fund water projects;
147          (d) whether the state should become an owner and operator of water projects;
148          (e) how the state will encourage the implementation of water conservation programs;
149     and

150          (f) other water issues of statewide importance.
151          (2) The commission shall consult with the Division of Water Resources and the Board
152     of Water Resources regarding:
153          (a) recommendations for rules, criteria, targets, processes, and plans described in
154     Subsection 73-10g-105(3); and
155          (b) the scope of any request for proposals that may be issued by the Division of Water
156     Resources and Board of Water Resources to assist in creating the rules, criteria, targets,
157     processes, and plans described in Subsection 73-10g-105(3) .
158          (3) The commission shall support community efforts to develop a unified, state water
159     strategy to promote water conservation and efficiency that:
160          (a) is consistent with Section 73-1-21;
161          (b) is created with the aid of stakeholders including water conservancy districts created
162     under Title 17B, Chapter 2a, Part 10, Water Conservancy District Act;
163          (c) includes model ordinances or policies consistent with the unified, statewide water
164     strategy that may be adopted by political subdivisions; and
165          (d) respects different needs of different political subdivisions or geographic regions of
166     the state.
167          [(3)] (4) The commission may:
168          (a) form one or more working groups from the membership of the commission to
169     consider and study the issues described in this section; and
170          (b) meet up to six times per calendar year without approval from the Legislative
171     Management Committee.
172          Section 3. Appropriation.
173          The following sums of money are appropriated for the fiscal year beginning July 1,
174     2021, and ending June 30, 2022. These are additions to amounts previously appropriated for
175     fiscal year 2022. Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures
176     Act, the Legislature appropriates the following sums of money from the funds or accounts
177     indicated for the use and support of the government of the state of Utah.
178     ITEM 1
179          To the Department of Natural Resources - Division of Water Resources
180               From General Fund

181               Schedule of Programs:
182                    Planning                         $2,000,000
183          The Legislature intends that the appropriation under this item be used to fund grants as
184     described in Subsection 73-10-34(5) enacted in this bill.