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7 LONG TITLE
8 General Description:
9 This bill addresses emergency shortages of water declared by the governor.
10 Highlighted Provisions:
11 This bill:
12 ▸ amends the powers of the Department of Agriculture and Food;
13 ▸ provides for the use of money in the Agriculture Resource Development Fund for
14 emergency water shortages loans;
15 ▸ addresses governmental immunity;
16 ▸ enacts the Water Preferences During Emergencies chapter, including:
17 • defining terms;
18 • providing for scope of the chapter;
19 • outlining the process for declaring a temporary water shortage emergency;
20 • addressing water use preferences under a temporary water shortage emergency;
21 • providing for compensation related to water use preferences; and
22 • addressing rulemaking by the Department of Agriculture and Food;
23 ▸ repeals existing statutes related to water preferences and a study; and
24 ▸ makes technical changes.
25 Money Appropriated in this Bill:
26 This bill appropriates for fiscal year 2024:
27 ▸ to the Department of Agriculture and Food - Agriculture Resource Development
28 Fund, as a one-time appropriation:
29 • from the General Fund, $10,000,000.
30 Other Special Clauses:
31 None
32 Utah Code Sections Affected:
33 AMENDS:
34 4-2-103, as last amended by Laws of Utah 2022, Chapters 68, 79
35 4-18-105, as last amended by Laws of Utah 2022, Chapter 68
36 4-18-106, as last amended by Laws of Utah 2022, Chapter 79
37 63G-7-302, as last amended by Laws of Utah 2022, Chapter 388
38 ENACTS:
39 73-3d-101, Utah Code Annotated 1953
40 73-3d-102, Utah Code Annotated 1953
41 73-3d-201, Utah Code Annotated 1953
42 73-3d-202, Utah Code Annotated 1953
43 73-3d-301, Utah Code Annotated 1953
44 73-3d-302, Utah Code Annotated 1953
45 73-3d-401, Utah Code Annotated 1953
46 73-3d-402, Utah Code Annotated 1953
47 73-3d-403, Utah Code Annotated 1953
48 REPEALS:
49 73-3-21.3, as enacted by Laws of Utah 2022, Chapter 311
50 73-3-21.5, as enacted by Laws of Utah 2022, Chapter 311
51
52 Be it enacted by the Legislature of the state of Utah:
53 Section 1. Section 4-2-103 is amended to read:
54 4-2-103. Functions, powers, and duties of department -- Fees for services --
55 Marketing orders -- Procedure -- Purchasing and auditing.
56 (1) The department shall:
57 (a) inquire into and promote the interests and products of agriculture and allied
58 industries;
59 (b) promote methods for increasing the production and facilitating the distribution of
60 the agricultural products of the state;
61 (c) (i) inquire into the cause of contagious, infectious, and communicable diseases
62 among livestock and the means for their prevention and cure; and
63 (ii) initiate, implement, and administer plans and programs to prevent the spread of
64 diseases among livestock;
65 (d) encourage experiments designed to determine the best means and methods for the
66 control of diseases among domestic and wild animals;
67 (e) issue marketing orders for any designated agricultural product to:
68 (i) promote orderly market conditions for any product;
69 (ii) give the producer a fair return on the producer's investment at the marketplace; and
70 (iii) only promote and not restrict or restrain the marketing of Utah agricultural
71 commodities;
72 (f) administer and enforce all laws assigned to the department by the Legislature;
73 (g) establish standards and grades for agricultural products and fix and collect
74 reasonable fees for services performed by the department in conjunction with the grading of
75 agricultural products;
76 (h) establish operational standards for any establishment that manufactures, processes,
77 produces, distributes, stores, sells, or offers for sale any agricultural product;
78 (i) adopt, according to Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
79 rules necessary for the effective administration of the agricultural laws of the state;
80 (j) when necessary, make investigations, subpoena witnesses and records, conduct
81 hearings, issue orders, and make recommendations concerning matters related to agriculture;
82 (k) (i) inspect any nursery, orchard, farm, garden, park, cemetery, greenhouse, or any
83 private or public place that may become infested or infected with harmful insects, plant
84 diseases, noxious or poisonous weeds, or other agricultural pests;
85 (ii) establish and enforce quarantines;
86 (iii) issue and enforce orders and rules for the control and eradication of pests,
87 wherever they may exist within the state; and
88 (iv) perform other duties relating to plants and plant products considered advisable and
89 not contrary to law;
90 (l) inspect apiaries for diseases inimical to bees and beekeeping;
91 (m) take charge of any agricultural exhibit within the state, if considered necessary by
92 the department, and award premiums at that exhibit;
93 (n) provide for the coordination of state conservation efforts, including by:
94 (i) assisting the Conservation Commission in the administration of Chapter 18,
95 Conservation Commission Act;
96 (ii) implementing Chapter 46, Conservation Coordination Act, including entering into
97 agreements with other state agencies; and
98 (iii) administering and disbursing money available to assist conservation districts in the
99 state in the conservation of the state's soil and water resources;
100 (o) participate in the United States Department of Agriculture certified agricultural
101 mediation program, in accordance with 7 U.S.C. Sec. 5101 and 7 C.F.R. Part 785;
102 (p) promote and support the multiple use of public lands;
103 (q) ensure that any training or certification required of a public official or public
104 employee, as those terms are defined in Section 63G-22-102, complies with Title 63G, Chapter
105 22, State Training and Certification Requirements, if the training or certification is required:
106 (i) under this title;
107 (ii) by the department; or
108 (iii) by an entity within the department; [
109 (r) in accordance with Title 73, Chapter 3d, Part 4, Compensation:
110 (i) conduct mediation or arbitration; and
111 (ii) assist in the issuance of loans by the Conservation Commission; and
112 [
113 (2) The department, by following the procedures and requirements of Section
114 63J-1-504, may adopt a schedule of fees assessed for services provided by the department.
115 (3) (a) A marketing order issued under Subsection (1)(e) may not take effect until:
116 (i) the department gives notice of the proposed order to the producers and handlers of
117 the affected product;
118 (ii) the commissioner conducts a hearing on the proposed order; and
119 (iii) at least 50% of the registered producers and handlers of the affected products vote
120 in favor of the proposed order.
121 (b) (i) The department may establish boards of control to administer marketing orders
122 and the proceeds derived from any order.
123 (ii) A board of control shall:
124 (A) ensure that proceeds are placed in an account in the board of control's name in a
125 depository institution; and
126 (B) ensure that the account is annually audited by an accountant approved by the
127 commissioner.
128 (4) Money collected by grain grading, as provided by Subsection (1)(g), shall be
129 deposited into the General Fund as dedicated credits for the grain grading program.
130 (5) In fulfilling the department's duties in this chapter, the department may:
131 (a) purchase, as authorized or required by law, services that the department is
132 responsible to provide for legally eligible persons;
133 (b) take necessary steps, including legal action, to recover money or the monetary value
134 of services provided to a recipient who is not eligible;
135 (c) examine and audit the expenditures of any public funds provided to a local
136 authority, agency, or organization that contracts with or receives funds from those authorities or
137 agencies;
138 (d) accept and administer grants from the federal government and from other sources,
139 public or private; and
140 (e) fund grants using money appropriated by the Legislature or money received from
141 any other source.
142 Section 2. Section 4-18-105 is amended to read:
143 4-18-105. Conservation Commission -- Functions and duties.
144 (1) The commission shall:
145 (a) facilitate the development and implementation of the strategies and programs
146 necessary to:
147 (i) protect, conserve, use, and develop the soil, water, and air resources of the state; and
148 (ii) promote the protection, integrity, and restoration of land for agricultural and other
149 beneficial purposes;
150 (b) disseminate information regarding districts' activities and programs;
151 (c) supervise the formation, reorganization, or dissolution of districts according to the
152 requirements of Title 17D, Chapter 3, Conservation District Act;
153 (d) prescribe uniform accounting and recordkeeping procedures for districts and
154 require each district to submit annually the information required in Section 17D-3-103;
155 (e) approve and make loans for [
156 through the loan advisory board described in Section 4-18-106, from the Agriculture Resource
157 Development Fund;
158 (f) seek to obtain and administer federal or state money in accordance with applicable
159 federal or state guidelines and make loans or grants from that money to an eligible entity, as
160 defined by the department by rule made in accordance with Title 63G, Chapter 3, Utah
161 Administrative Rulemaking Act, for the preservation of soil, water, and air resources, or for a
162 reason set forth in Section 4-18-108;
163 (g) seek to coordinate soil and water protection, conservation, and development
164 activities and programs of state agencies, local governmental units, other states, special interest
165 groups, and federal agencies;
166 (h) when assigned by the governor, when required by contract with the Department of
167 Environmental Quality, or when required by contract with the United States Environmental
168 Protection Agency:
169 (i) develop programs for the prevention, control, or abatement of new or existing
170 pollution to the soil, water, or air of the state;
171 (ii) advise, consult, and cooperate with affected parties to further the purpose of this
172 chapter;
173 (iii) conduct studies, investigations, research, and demonstrations relating to
174 agricultural pollution issues;
175 (iv) give reasonable consideration in the exercise of its powers and duties to the
176 economic impact on sustainable agriculture;
177 (v) meet the requirements of federal law related to water and air pollution in the
178 exercise of the commission's powers and duties; and
179 (vi) establish administrative penalties relating to agricultural discharges as defined in
180 Section 4-18-103 that are proportional to the seriousness of the resulting environmental harm;
181 and
182 (i) coordinate with the Division of Conservation created in Section 4-46-401.
183 (2) The commission may:
184 (a) employ, with the approval of the department, an administrator and necessary
185 technical experts and employees;
186 (b) execute contracts or other instruments necessary to exercise the commission's
187 powers;
188 (c) take necessary action to promote and enforce the purpose and findings of Section
189 4-18-102;
190 (d) sue and be sued; and
191 (e) adopt rules, in accordance with Title 63G, Chapter 3, Utah Administrative
192 Rulemaking Act, necessary to carry out the powers and duties described in Subsection (1) and
193 Subsections (2)(b) and (c).
194 Section 3. Section 4-18-106 is amended to read:
195 4-18-106. Agriculture Resource Development Fund -- Contents -- Use of fund
196 money -- Advisory board.
197 (1) As used in this section:
198 (a) "Disaster" means an extraordinary circumstance, including a flood, drought, or fire,
199 that results in:
200 (i) the president of the United States declaring an emergency or major disaster in the
201 state;
202 (ii) the governor declaring a state of emergency under Title 53, Chapter 2a, Part 2,
203 Disaster Response and Recovery Act; or
204 (iii) the chief executive officer of a local government declaring a local emergency
205 under Title 53, Chapter 2a, Part 2, Disaster Response and Recovery Act.
206 (b) "Fund" means the Agriculture Resource Development Fund created in this section.
207 [
208 53-2a-602.
209 (2) There is created a revolving loan fund known as the "Agriculture Resource
210 Development Fund."
211 (3) The [
212 (a) money appropriated to the fund by the Legislature;
213 (b) sales and use tax receipts transferred to the fund in accordance with Section
214 59-12-103;
215 (c) money received for the repayment of loans made from the fund;
216 (d) money from a preferential user to reimburse the commission for loans made from
217 the fund in accordance with Title 73, Chapter 3d, Part 4, Compensation;
218 [
219 temporary water shortage emergencies from any source; and
220 [
221 (4) The commission may make loans from the [
222
223 (a) a rangeland improvement and management project;
224 (b) a watershed protection or flood prevention project;
225 (c) a soil and water conservation project;
226 (d) a program designed to promote energy efficient farming practices;
227 (e) an improvement program for agriculture product storage or program designed to
228 protect a crop or animal resource;
229 (f) a hydroponic or aquaponic system;
230 (g) a project or program to improve water quality;
231 (h) a project to address other environmental issues; [
232 (i) subject to Subsection (5), a disaster relief program designed to aid the sustainability
233 of agriculture during and immediately following a disaster[
234 (j) subject to Subsection (6), authorized for temporary water shortage emergencies as
235 provided in Title 73, Chapter 3d, Part 4, Compensation.
236 (5) (a) Loans made through a disaster relief program described in Subsection (4)(i) may
237 not comprise more than 10% of the funds appropriated by the Legislature to the [
238
239 (b) Notwithstanding Subsection (5)(a), the department may use [
240 appropriated to the [
241 another source, without limitation, if the money is appropriated specifically for use in a disaster
242 relief program.
243 (c) (i) Until December 31, 2024, the department is authorized to borrow up to
244 $3,000,000 of General Fund appropriations from the Agricultural Water Optimization Account
245 created in Section 73-10g-204 to be used in making loans through a disaster relief program
246 described in Subsection (4)(i).
247 (ii) If the department borrows from the Agricultural Water Optimization Account
248 under Subsection (5)(c)(i), the department shall deposit the repayment of principal and interest
249 on loans made through a disaster relief program, regardless of the source of the funds used to
250 make those loans, into the Agricultural Water Optimization Account, with preference over the
251 repayment of any other source of funds, until the Agricultural Water Optimization Account is
252 repaid in full.
253 (6) The commission may not have at one time an aggregate amount of loans made
254 under Subsection (4)(j) that exceeds $5,000,000.
255 [
256 (a) oversee the award process for loans, as described in this section;
257 (b) approve loans; and
258 (c) recommend policies and procedures for the [
259
260 Section 4. Section 63G-7-302 is amended to read:
261 63G-7-302. Assessment of compensation and damages in an action for taking or
262 damaging private property.
263 (1) [
264
265 recovery of compensation from the governmental entity when the governmental entity has
266 taken or damaged private property for public uses without just compensation, compensation
267 and damages shall be assessed according to [
268 Eminent Domain.
269 (2) In an action brought under Utah Constitution, Article I, Section 22, for the recovery
270 of compensation for the interruption of water use in the case of a temporary water shortage
271 emergency that results in the taking or damage of property for public uses without just
272 compensation, compensation and damages shall be assessed in accordance with Title 73,
273 Chapter 3d, Water Preferences During Emergencies.
274 Section 5. Section 73-3d-101 is enacted to read:
275
276
277 73-3d-101. Definitions.
278 As used in this chapter:
279 (1) "Electric utility" means:
280 (a) a municipal electric utility, as defined in Section 10-19-102;
281 (b) an electric interlocal entity, as defined in Section 11-13-103;
282 (c) an energy services interlocal entity, as defined in Section 11-13-103;
283 (d) a project entity, as defined in Section 11-13-103;
284 (e) an electric improvement district, as defined in Section 17B-2a-406; or
285 (f) an electrical corporation, as defined in Section 54-2-1.
286 (2) "Military facility" means an installation, base, air field, camp, post, station, yard,
287 center, or other facility owned, leased, or operated by, or under the jurisdiction of, the United
288 States Department of Defense or the National Guard.
289 (3) "Person entitled to make a request" means:
290 (a) the holder of an approved but unperfected application to appropriate water;
291 (b) the record owner of a perfected water right; or
292 (c) a person who provides water using an approved but unperfected application or a
293 perfected water right with the written authorization of a person described in Subsection (3)(a)
294 or (b).
295 (4) "Temporary water shortage emergency" means an interruption of water delivery for
296 which the governor may declare an emergency in accordance with Section 73-3d-201.
297 Section 6. Section 73-3d-102 is enacted to read:
298 73-3d-102. Scope of chapter.
299 (1) (a) The powers vested in the governor under this chapter are in addition to, and not
300 in lieu of, any other emergency powers otherwise statutorily vested in the governor, including
301 the power of the governor to authorize the use of water sources as necessary for fire
302 suppression under Subsection 53-2a-204(1)(o).
303 (b) An executive order of the governor declaring a temporary water shortage
304 emergency under this chapter is not a declaration of a state of emergency under Section
305 53-2a-206 and is not subject to Title 53, Chapter 2a, Part 2, Disaster Response and Recovery
306 Act. To exercise an authority granted under Title 53, Chapter 2a, Part 2, Disaster Response and
307 Recovery Act, related to a declaration of a state of emergency, the governor shall issue an
308 executive order that is separate from an executive order declaring a temporary water shortage
309 emergency.
310 (2) Nothing in this chapter modifies:
311 (a) the statutory duties of the state engineer under this title; or
312 (b) except as specifically provided in an executive order declaring a temporary water
313 shortage emergency, Subsection 73-3-1(5)(a) or Section 73-3-21.1.
314 Section 7. Section 73-3d-201 is enacted to read:
315
316 73-3d-201. Declaration of a temporary water shortage emergency by the
317 governor.
318 (1) (a) Subject to the requirements of this section, the governor may declare a
319 temporary water shortage emergency by issuing an executive order if, on the governor's own
320 initiative or at the request of a person entitled to make a request, the governor determines that
321 an existing or imminent short-term interruption of water delivery in this state caused by
322 manmade or natural causes other than drought:
323 (i) threatens:
324 (A) the availability or quality of an essential water supply or water supply
325 infrastructure; or
326 (B) the operation of the economy; and
327 (ii) because of the threats described in Subsection (1)(a)(i), jeopardizes the peace,
328 health, safety, or welfare of the people of this state.
329 (b) The governor may only issue the executive order declaring a temporary water
330 shortage emergency described in Subsection (1)(a):
331 (i) with the advice and recommendation of the state engineer; and
332 (ii) in consultation with the emergency management administration committee created
333 by Section 53-2a-105.
334 (c) An executive order issued under this Subsection (1) shall state with specificity:
335 (i) the nature of the interruption of water supply;
336 (ii) subject to Subsection (2), the time period for which the temporary water shortage
337 emergency is declared;
338 (iii) a description of the geographic area that is subject to the executive order;
339 (iv) a list of the specific persons entitled to make a request who may exercise the
340 preferential use of water under Section 73-3d-301 during the effective period of the temporary
341 water shortage emergency; and
342 (v) the purposes outlined in Subsection 73-3d-301(1) for which a person who is
343 described in Subsection (1)(c)(iv) may take the water subject to Section 73-3d-301.
344 (d) Before providing a recommendation to the governor under Subsection (1)(b)(i), the
345 state engineer shall require a person entitled to make a request who is described in Subsection
346 (1)(c)(iv) to provide a written statement describing how the person entitled to make a request
347 has exhausted other reasonable means to acquire water.
348 (e) A person entitled to make a request who is described in Subsection (1)(c)(iv) may
349 take water preferentially during a temporary water shortage emergency only for a purpose
350 authorized by the executive order.
351 (f) (i) Within seven calendar days of the day on which the governor issues an executive
352 order declaring a temporary water shortage emergency, the Legislative Management
353 Committee shall:
354 (A) review the executive order; and
355 (B) advise the governor on the declaration of a temporary water shortage emergency.
356 (ii) The failure of the Legislative Management Committee to meet as required by
357 Subsection (1)(f)(i) does not affect the validity of the executive order declaring a temporary
358 water shortage emergency.
359 (2) (a) The governor shall state in an executive order declaring a temporary water
360 shortage emergency the time period for which the temporary water shortage emergency is
361 declared, except that the governor may not declare a temporary water shortage emergency for
362 longer than six months from the date the executive order is issued.
363 (b) The governor may terminate an executive order declaring a temporary water
364 shortage emergency before the expiration of the time period stated in the executive order.
365 (c) The Legislature may extend the time period of an executive order declaring a
366 temporary water shortage emergency by joint resolution, except that the Legislature may not
367 extend a temporary water shortage emergency for longer than one year from the day on which
368 the executive order declaring a temporary water shortage emergency is issued.
369 Section 8. Section 73-3d-202 is enacted to read:
370 73-3d-202. Existing agencies to be used in implementation.
371 The governor shall use, to the extent practicable, existing state boards, commissions, or
372 agencies, or officers or employees for the purpose of carrying out this chapter.
373 Section 9. Section 73-3d-301 is enacted to read:
374
375 73-3d-301. Preferences between persons using water.
376 (1) Notwithstanding Section 73-3-21.1, if the governor issues an executive order
377 declaring a temporary water shortage emergency under this chapter:
378 (a) use of water is preferred over other water use during the time period of the
379 temporary water shortage emergency under the executive order if the water is used in
380 accordance with the executive order:
381 (i) for one or more of the following purposes, with preference exercised in the order
382 listed:
383 (A) drinking;
384 (B) sanitation;
385 (C) fire suppression;
386 (D) commercial agriculture animal welfare needs; or
387 (E) generation of electricity; and
388 (ii) by one of the following:
389 (A) a public water supplier, as defined in Section 73-1-4;
390 (B) a military facility that was in operation on March 10, 2011;
391 (C) a commercial agriculture operation for purposes described in Subsection
392 (1)(a)(i)(D); or
393 (D) an electric utility; and
394 (b) use of water for agricultural purposes, including irrigation, livestock watering, or
395 food processing, is preferred over other rights, except as provided in Subsection (1)(a).
396 (2) A preference for fire suppression under Subsection (1) is in addition to the
397 governor's authorization to use water sources as necessary for fire suppression under
398 Subsection 53-2a-204(1)(o).
399 (3) The state engineer shall determine, consistent with the executive order declaring a
400 temporary water shortage emergency, through a priority schedule, which water rights a person
401 specified in the executive order as required by Subsection 73-3d-201(1)(c)(iv) may interrupt for
402 purposes of this section.
403 (4) (a) A person entitled to make a request who uses water preferentially during a
404 temporary water shortage emergency shall measure the water taken preferentially during the
405 temporary water shortage emergency.
406 (b) A duty to measure under this Subsection (4) does not replace or modify any other
407 duty to measure water under this title or rules made under this title.
408 Section 10. Section 73-3d-302 is enacted to read:
409 73-3d-302. Emergency planning by a person requesting the declaration of a
410 temporary water shortage emergency.
411 A person entitled to make a request seeking a preference under Section 73-3d-301 by
412 requesting that the governor declare a temporary water shortage emergency may exercise a
413 preference under Section 73-3d-301 only if:
414 (1) (a) the person entitled to make a request adopts an emergency response plan before
415 the declaration of a temporary water shortage emergency if the person entitled to make a
416 request is a community water system, as defined in Section 19-4-102, serving a population of
417 more than 3,300; or
418 (b) the governor includes a statement in the executive order that the person entitled to
419 make a request is eligible to exercise a preference under Section 73-3d-301 notwithstanding
420 that the person entitled to make a request who is described in Subsection (1)(a)(i) has not
421 adopted an emergency response plan before the declaration of a temporary water shortage
422 emergency; or
423 (2) the person entitled to make a request is not described in Subsection (1)(a).
424 Section 11. Section 73-3d-401 is enacted to read:
425
426 73-3d-401. Definitions.
427 As used in this part:
428 (1) "Arbitration" means a private hearing before a neutral or panel of neutrals from the
429 department who hear the evidence, consider the contentions of the parties, and enters a written
430 award to resolve the issues presented.
431 (2) "Commission" means the Conservation Commission created in Section 4-18-104.
432 (3) "Consequential damages" means the losses or injuries from the exercise of a
433 preference under this chapter that is reasonably foreseeable to someone familiar with the
434 industry where use is being made of the water at the time the preference is exercised.
435 (4) "Department" means the Department of Agriculture and Food.
436 (5) "Fund" means the Agriculture Resource Development Fund created in Section
437 4-18-106.
438 (6) "Interrupted user" means a person whose water use is interrupted by the preferential
439 use of water under this chapter.
440 (7) "Mediation" means a private forum in which one or more impartial persons from
441 the department facilitate communication between the interrupted user and the preferential user
442 to promote a mutually acceptable resolution or settlement.
443 (8) "Preferential user" means a person specified in the executive order declaring a
444 temporary water shortage emergency who uses water preferentially during the temporary water
445 shortage emergency.
446 Section 12. Section 73-3d-402 is enacted to read:
447 73-3d-402. Payment of compensation.
448 (1) (a) A preferential user shall pay an interrupted user an amount equal to the total of
449 the following:
450 (i) the reasonable value of the water interrupted by the preferential use;
451 (ii) applicable crop losses;
452 (iii) other consequential damages incurred as a result of the interruption; and
453 (iv) interest on the amounts described in Subsections (1)(a)(i), (ii), and (iii) in the
454 amount of 8% per annum.
455 (b) Interest described in Subsection (1)(a)(iv) shall start the day on which the
456 preferential user first begins to take water preferentially.
457 (c) A preferential user shall pay an interrupted user the amount described in Subsection
458 (1)(a) by the later of 30 days from the day on which:
459 (i) the preferential user stops diverting water preferentially under this chapter; or
460 (ii) mediation or arbitration under Subsection (2) is complete.
461 (d) (i) Once an interrupted user informs the preferential user of the amount owed under
462 Subsection (1)(a), the preferential user has the burden of proof to prove, by a preponderance of
463 the evidence, that an amount different from that asserted by the interrupted user is owed under
464 Subsection (1)(a).
465 (ii) The burden of proof described in this Subsection (1)(d) applies throughout the
466 process of paying compensation, including during mediation, arbitration, or a court action.
467 (2) (a) (i) If the interrupted user or the preferential user requests mediation, the
468 department shall mediate a dispute over the application of this section.
469 (ii) If the interrupted user and the preferential user jointly request arbitration, the
470 department shall arbitrate a dispute over the application of this section.
471 (b) In conducting mediation under this Subsection (2), Title 78B, Chapter 10, Utah
472 Uniform Mediation Act, applies.
473 (c) (i) In conducting arbitration under this Subsection (2), the department shall follow
474 the Title 78B, Chapter 11, Utah Uniform Arbitration Act.
475 (ii) In applying Title 78B, Chapter 11, Utah Uniform Arbitration Act, the arbitrator and
476 parties shall treat the matter as if:
477 (A) the arbitration was ordered by a court; and
478 (B) the department was appointed as arbitrator by the court.
479 (iii) For the purpose of an arbitration conducted under this section, if the dispute to be
480 arbitrated is not already the subject of legal action, the district court having jurisdiction over
481 the county where the preferential use of water involved in the dispute is located is the court
482 referred to in Title 78B, Chapter 11, Utah Uniform Arbitration Act.
483 (iv) Arbitration by the department is not necessary before bringing legal action to
484 adjudicate a claim under this section. The lack of arbitration by the department does not
485 constitute, and may not be interpreted as constituting, a failure to exhaust available
486 administrative remedies or as a bar to bringing legal action.
487 (v) Arbitration under this section is not subject to Title 63G, Chapter 4, Administrative
488 Procedures Act, or Title 78B, Chapter 6, Part 2, Alternative Dispute Resolution Act.
489 (vi) Within 30 days after an arbitrator issues a final award, any party to the arbitration
490 may submit the dispute, the award, or any issue upon which the award is based, to the district
491 court for review by trial de novo unless the parties agree in advance of arbitration that the
492 arbitration is binding and that no de novo review may occur.
493 (3) (a) If the persons described in Subsection (2) participate in mediation or arbitration
494 under Subsection (2), at the conclusion of the mediation or arbitration, the preferential user
495 shall pay the interrupted user an amount equal to the lesser of:
496 (i) the amount of actual attorney fees incurred; or
497 (ii) $15,000.
498 (b) An interrupted user or preferential user may not seek mediation or arbitration by the
499 Office of the Property Rights Ombudsman under Title 13, Chapter 43, Property Rights
500 Ombudsman Act.
501 (4) In an action when the court is asked to determine the amount described in
502 Subsection (1), the court shall award costs and reasonable attorney fees:
503 (a) to the interrupted user if the preferential user declines to participate in mediation or
504 arbitration under Subsection (2);
505 (b) to the preferential user if the interrupted user declines to participate in mediation or
506 arbitration under Subsection (2);
507 (c) to the interrupted user if the amount determined by the court is 85% or more of:
508 (i) the final amount offered by the interrupted user as part of the mediation described in
509 Subsection (2)(a); or
510 (ii) the final amount determined by the department as a result of arbitration described
511 in Subsection (2); and
512 (d) to the preferential user if the amount determined by the court is less than 85% of:
513 (i) the final amount offered by the interrupted user as part of the mediation described in
514 Subsection (2)(a); or
515 (ii) the final amount determined by the department as a result of arbitration described
516 in Subsection (2).
517 (5) (a) In accordance with this Subsection (5), an interrupted user may apply for one or
518 more 0% interest loans from the commission to compensate the interrupted user while the
519 interrupted user is waiting to be compensated by the preferential user under this section.
520 (b) Before the commission may make a loan under this Subsection (5) to an interrupted
521 user, the interrupted user shall apply for the loan by:
522 (i) providing information sufficient to establish to the satisfaction of the commission:
523 (A) the basis by which the person is entitled to use of the water;
524 (B) the use of water that would have been made by the person without the interruption;
525 (C) the length of the interruption;
526 (D) a good faith estimate of the amount of water the person entitled to the use of water
527 would otherwise have made;
528 (E) the losses and consequential damages incurred as a result of the interruption; and
529 (F) whether the interrupted user has previously received a loan under this Subsection
530 (5) for the same interruption of water use;
531 (ii) agreeing in writing to repay the amount of a loan within 30 days of the day on
532 which the interrupted user is paid in full by the preferential user; and
533 (iii) providing any other information required by rules made by the department in
534 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
535 (c) (i) Once the commission obtains a complete application under Subsection (5)(b),
536 the commission shall determine whether the interrupted user is eligible for a loan and the
537 amount to be loaned using reliable third-party market and producer information, when
538 available, as close as possible to the beginning date of the water delivery interruption, except
539 that a single loan may not exceed $150,000.
540 (ii) For agriculture commodities, the commission may determine unit prices and base
541 adjustments by using:
542 (A) applicable United States Department of Agriculture crop pricing data sets;
543 (B) Utah State University Extension data sets; and
544 (C) publications, fact sheets, and enterprise budgets data sets published by a university.
545 (iii) For agriculture commodities, the commission may consider documents filed under
546 Subsection (5)(b) to establish historical production records provided by the interrupted user.
547 (iv) For nonagricultural products or services, the commission may determine the loan
548 amount using information from:
549 (A) other state agencies;
550 (B) federal agencies; and
551 (C) industry leaders within the state associated with the goods or service forgone by the
552 interrupted user.
553 (v) For nonagricultural products or services, the commission shall determine the
554 quantity of units of nonagricultural good and services during the temporary water shortage
555 emergency by using:
556 (A) industry standards, if available; or
557 (B) recent product or service records.
558 (d) The commission may issue a loan to an interrupted user only to the extent that there
559 is money in the fund and the limit on outstanding loans from the fund under Subsection
560 4-18-106(6) has not been met. The commission shall issue loans from the fund in the order that
561 an interrupted user submits a completed application for the loan.
562 (e) An interrupted user who receives a loan under this Subsection (5) shall repay the
563 amount of the loan within 30 days of the day on which the interrupted user is paid in full by the
564 preferential user.
565 (6) (a) If the department determines that the preferential user fails to comply with
566 Subsection (1), the department may bring suit in a court of competent jurisdiction to require a
567 preferential user to reimburse the fund for a loan issued under Subsection (5) that is based on
568 the use of the water by the preferential user.
569 (b) If the department determines that an interrupted user fails to repay a loan in
570 accordance with Subsection (5), the department may bring suit in a court of competent
571 jurisdiction to require repayment of the loan.
572 (c) If the department prevails in an action brought under this Subsection (6), the
573 department may recover amounts owed, court costs, and reasonable attorney fees.
574 (7) The department shall establish by rule made in accordance with Title 63G, Chapter
575 3, Utah Administrative Rulemaking Act, procedures to:
576 (a) request mediation or arbitration under this section;
577 (b) apply for a loan under Subsection (5)
578 (c) determine the amount to be loaned to an interrupted user under Subsection (5); and
579 (d) provide for the repayment of a loan issued under Subsection (5).
580 Section 13. Section 73-3d-403 is enacted to read:
581 73-3d-403. Security requirements.
582 (1) As a condition of participating in mediation or arbitration under Section 73-3d-403,
583 a person specified in the executive order declaring a temporary water shortage emergency shall
584 post with the department a corporate surety bond, irrevocable letter of credit, trust fund
585 agreement, or any other security agreement considered reasonable in an amount not less than
586 $100,000.
587 (2) The bond or other security posted shall be conditioned upon:
588 (a) the faithful performance in mediation or arbitration; and
589 (b) the payment of amounts owed under Section 73-3d-403.
590 (3) If the department determines that the conditions of Subsection (2) are not met, the
591 commissioner of the department shall bring an action upon the bond or other security.
592 Section 14. Repealer.
593 This bill repeals:
594 Section 73-3-21.3, Study of preferences during temporary water shortage
595 emergency.
596 Section 73-3-21.5, Preferences between appropriators.
597 Section 15. Appropriation.
598 The following sums of money are appropriated for the fiscal year beginning July 1,
599 2023, and ending June 30, 2024. These are additions to amounts previously appropriated for
600 fiscal year 2024. Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures
601 Act, the Legislature appropriates the following sums of money from the funds or accounts
602 indicated for the use and support of the government of the state of Utah.
603 ITEM 1
604 To Department of Agriculture and Food - Agriculture Resource Development Fund
605 From General Fund, One-time
10,000,000
606 Schedule of Programs:
607 Agriculture Resource Development Fund 10,000,000