1. Water Right Issues of the State Engineer Utah Water Users Workshop March 17, 2015 Kent L. Jones, P.E. State Engineer

2. 2015 Water Bills HB 25 Water Law – Application Revisions - Snow ; New Law HB 25 Water Law – Application Revisions - Snow ; New Law HB 43S4 Water Rights – Change Application Amendments – McIff; New Law HB 43S4 Water Rights – Change Application Amendments – McIff; New Law HB 47 Protection of Water Rights – McIff; House Rules HB 47 Protection of Water Rights – McIff; House Rules HB 58 Change Application Modifications – Grover; New Law HB 58 Change Application Modifications – Grover; New Law

3. 2015 Water Bills HB 161 Utah Revised Nonprofit Corporation Act – McIff; House Committee HB 161 Utah Revised Nonprofit Corporation Act – McIff; House Committee HB 258 Employee Classification Amendments – Chew; New Law HB 258 Employee Classification Amendments – Chew; New Law

4. 2015 Water Bills SB 15 Water Law – Forfeiture Exemptions – Dayton; New Law SB 15 Water Law – Forfeiture Exemptions – Dayton; New Law SB 35 Water Rights Amendments – Dayton; Passed Senate to House Floor/Circled. Same bill as HB 58; New Law SB 35 Water Rights Amendments – Dayton; Passed Senate to House Floor/Circled. Same bill as HB 58; New Law SB 40 Water Law – Application Withdrawal – Dayton; New Law SB 40 Water Law – Application Withdrawal – Dayton; New Law SB 126 Water Amendments – Dayton; Senate Rules SB 126 Water Amendments – Dayton; Senate Rules

5. 2015 Water Bills SB 142 Water Rights – Change Application Revisions – Stevenson; Senate Rules. Same as HB 43 SB 142 Water Rights – Change Application Revisions – Stevenson; Senate Rules. Same as HB 43 SB 225 Irrigation Service Water Rights Amendments – Van Tassel ; New Law SB 225 Irrigation Service Water Rights Amendments – Van Tassel ; New Law SCR 2 Concurrent Resolution Regarding Navajo Water Rights Settlement – Hinkins; New Law SCR 2 Concurrent Resolution Regarding Navajo Water Rights Settlement – Hinkins; New Law

6. O X - Senate O - House O O O OO OO XX X X X X X X

7. Jensen v Jones/ Big Ditch Supreme Court Decisions 2011 Supreme Court Decisions 2011 Restricted state engineer’s ability to address beneficial use of water in a change application based on the right being subject to forfeiture from nonuse. Restricted state engineer’s ability to address beneficial use of water in a change application based on the right being subject to forfeiture from nonuse. Allowed contract holders to file change applications as “one entitled to the use of water.” Allowed contract holders to file change applications as “one entitled to the use of water.”

8. Jensen v Jones (continued) State Engineer has historically been the “gatekeeper” to help protect the water rights of others from impairment. Only beneficial uses of water that can be given up when the change is reviewed are allowed to be transferred. State Engineer has historically been the “gatekeeper” to help protect the water rights of others from impairment. Only beneficial uses of water that can be given up when the change is reviewed are allowed to be transferred. “If you want to get something new, you have to give something up” There appears to be nothing to give up if a right is subject to challenge for forfeiture and hasn’t been used in a long time. “If you want to get something new, you have to give something up” There appears to be nothing to give up if a right is subject to challenge for forfeiture and hasn’t been used in a long time.

9. Jensen v Jones/ Big Ditch Requested direction from the legislature Requested direction from the legislature Action tied back to 2008 HB 51 where concern was expressed that the state engineer may not be able to continue to do what he has always done on change applications Action tied back to 2008 HB 51 where concern was expressed that the state engineer may not be able to continue to do what he has always done on change applications Intent language given from the legislature Intent language given from the legislature

10. HB 51 Intent Language 2008 Intent language with the 2008 changes said these changes are : Intent language with the 2008 changes said these changes are : “not intended to change the way the State Engineer evaluates change applications based on historic beneficial use or validate any invalid water rights.” “not intended to change the way the State Engineer evaluates change applications based on historic beneficial use or validate any invalid water rights.”

11. HB 25 Water Law – Application Revisions Water community wanted to have the legislature reconfirm State Engineer’s “Gatekeeper” role. Water community wanted to have the legislature reconfirm State Engineer’s “Gatekeeper” role. Efforts were made over the last three years to get the right balance and provide proper protection to all water right holders. Efforts were made over the last three years to get the right balance and provide proper protection to all water right holders. Have not been able to reach agreement. Have not been able to reach agreement.

12. HB 25 Water Law – Application Revisions Focus Group: Focus Group: 4 Representatives from the 4 biggest water Conservancy Districts. 4 Representatives from the 4 biggest water Conservancy Districts. 4 Representatives from the League of Cities and Towns. 4 Representatives from the League of Cities and Towns. 2 Representatives from the Farm Bureau. 2 Representatives from the Farm Bureau. Efforts were focused on impairment of right and defined “Quantity Impairment”

13. Quantity Impairment Diminishing the quantity of water in the source of supply for the existing right. Diminishing the quantity of water in the source of supply for the existing right. Changing the timing of availability of water from the source of supply for the existing right, or Changing the timing of availability of water from the source of supply for the existing right, or Enlarging the quantity of water depleted by the proposed nature of use when compared with the current nature of use Enlarging the quantity of water depleted by the proposed nature of use when compared with the current nature of use

14. HB 25 Water Law – Application Revisions A person entitled to the use of water may make a change to a water right if: A person entitled to the use of water may make a change to a water right if: The person makes a change in accordance with this section The person makes a change in accordance with this section The change does not impair an existing right without just compensation or mitigation The change does not impair an existing right without just compensation or mitigation The State Engineer approves the right. The State Engineer approves the right.

15. HB 25 Water Law – Application Revisions The applicant has the burden of producing evidence sufficient to support a reasonable belief that the change can be made in compliance with this section and section 73-3-8 The applicant has the burden of producing evidence sufficient to support a reasonable belief that the change can be made in compliance with this section and section 73-3-8 Rebuttable Presumption Rebuttable Presumption Quantity Impairment Quantity Impairment For a period of at least 7 years For a period of at least 7 years Not diverted from the approved point of diversion; nor Not diverted from the approved point of diversion; nor Beneficially used at the approved place of use. Beneficially used at the approved place of use.

16. HB 25 Water Law – Application Revisions Quantity Impairment under the rebuttable presumption may not be considered unless raised in a: Quantity Impairment under the rebuttable presumption may not be considered unless raised in a: Timely protest identifying the rights that may be impaired. Timely protest identifying the rights that may be impaired. Written notice from the State Engineer within 90 days from the filing of the application and identifying the rights that may be impaired. Written notice from the State Engineer within 90 days from the filing of the application and identifying the rights that may be impaired. All rights don’t have to be identified. All rights don’t have to be identified.

17. HB 25 Water Law – Application Revisions Consultation with the State Engineer or designee may be requested before filing an application… (nonbinding). Consultation with the State Engineer or designee may be requested before filing an application… (nonbinding).

18. HB 25 Water Law – Application Revisions What To Expect: What To Expect: The Division will continue to look for impairment issues associated with change applications. The Division will continue to look for impairment issues associated with change applications. In instances where water hasn’t been used continuously for more than 7 years, impairment will be investigated when it is proposed to put the water back to use through a change application process In instances where water hasn’t been used continuously for more than 7 years, impairment will be investigated when it is proposed to put the water back to use through a change application process Notifications will be sent within 90 days of filing or other water users must protest Notifications will be sent within 90 days of filing or other water users must protest The GATEKEEPER is back… The GATEKEEPER is back…

19. SB35/HB 58 Water Rights Amendments Proposal defines: “a person entitled to the use of water” Proposal defines: “a person entitled to the use of water” The holder of an approved but unperfected application to appropriate water The holder of an approved but unperfected application to appropriate water The record holder of a perfected right The record holder of a perfected right A person who has written authorization from the person described in 1 or 2 A person who has written authorization from the person described in 1 or 2 A shareholder in a water company who files in accordance with section 73-3-3.5 A shareholder in a water company who files in accordance with section 73-3-3.5

20. SB35/HB 58 Water Rights Amendments What To Expect: What To Expect: Required to have owner sign the change application, or Required to have owner sign the change application, or Require the owner to give written authorization. Require the owner to give written authorization. File change based on shares of stock by going through 73-3-3.5 criteria File change based on shares of stock by going through 73-3-3.5 criteria

21. SB 15 Water Law – Forfeiture Exemptions Forfeiture does not apply to a water right during the period of time the water right is subject to an approved change application where the applicant is diligently pursuing certification. Forfeiture does not apply to a water right during the period of time the water right is subject to an approved change application where the applicant is diligently pursuing certification. This bill is not retroactive and does not cover any periods of time before the change application is approved. This bill is not retroactive and does not cover any periods of time before the change application is approved.

22. SB 15 Water Law – Forfeiture Exemptions What To Expect: What To Expect: In considering a water right before the State Engineer, forfeiture considerations will not be evaluated if there is an approved change application as long as the water right owner is working toward certification. In considering a water right before the State Engineer, forfeiture considerations will not be evaluated if there is an approved change application as long as the water right owner is working toward certification. Must be diligent or have reasonable cause for delay in getting certification Must be diligent or have reasonable cause for delay in getting certification

23. SB 40 Application Withdrawal Authorizes an individual to withdraw an application that the individual owns. Authorizes an individual to withdraw an application that the individual owns. Requires the individual to send written notice to withdraw Requires the individual to send written notice to withdraw Requires the State Engineer to update the State Engineer’s records Requires the State Engineer to update the State Engineer’s records Individuals who withdraw unperfected applications are not entitled to a refund of fees Individuals who withdraw unperfected applications are not entitled to a refund of fees

24. SB 40 Application Withdrawal What To Expect: What To Expect: If you want to withdraw your unperfected application, you must do so in writing. If you want to withdraw your unperfected application, you must do so in writing. The State Engineer will update the water right records to reflect that it has been withdrawn and is of no further force or effect. No other action is required The State Engineer will update the water right records to reflect that it has been withdrawn and is of no further force or effect. No other action is required If the Division of Water Rights has had to expend funds in processing the application, fees will generally not be refunded. If you are not ready to file an application and have it processed…don’t file it. If the Division of Water Rights has had to expend funds in processing the application, fees will generally not be refunded. If you are not ready to file an application and have it processed…don’t file it.

25. Limitations of a Water Right 73-1-3: Beneficial use shall be the basis, the measure and the limit of all rights to the use of water in this state. 73-1-3: Beneficial use shall be the basis, the measure and the limit of all rights to the use of water in this state. Involves an amount of water and the purpose to which you are using the water. Involves an amount of water and the purpose to which you are using the water.

26. Beneficial Use Each type of use has an associated impact to the hydrologic system. Each type of use has an associated impact to the hydrologic system. Diversion: The reasonable amount of water required to be diverted. Diversion: The reasonable amount of water required to be diverted. Depletion: The amount of water that is lost from the hydrologic system based on the associated beneficial use. Depletion: The amount of water that is lost from the hydrologic system based on the associated beneficial use.

27. Delta Canal Company et al vs Frank Vincent Family Ranch Supreme Court Ruling November 2013 : Supreme Court Ruling November 2013 : “The number of acres irrigated is not determinative in a forfeiture analysis, though it may be relevant insofar as it indicates the volume of water used or whether water usage was beneficial. Farmers may reduce the total acres irrigated to grow a more water-intensive crop so long as they beneficially use their full entitlement. The central question in any forfeiture proceeding is whether the appropriator used all of its water allowance in a reasonable manner and for a beneficial purpose.” “The number of acres irrigated is not determinative in a forfeiture analysis, though it may be relevant insofar as it indicates the volume of water used or whether water usage was beneficial. Farmers may reduce the total acres irrigated to grow a more water-intensive crop so long as they beneficially use their full entitlement. The central question in any forfeiture proceeding is whether the appropriator used all of its water allowance in a reasonable manner and for a beneficial purpose.”

28. Questions Questions?

29. Understanding Water Rights When dealing with water rights, it is important to understand the underlying nature of the water right you are dealing with. When dealing with water rights, it is important to understand the underlying nature of the water right you are dealing with. Point of Diversion, Place of Use, Nature of Use, Period of Use, Priority, Consumptive Nature of the Right. Point of Diversion, Place of Use, Nature of Use, Period of Use, Priority, Consumptive Nature of the Right.

30. Waters Declared Property of the Public 73-1-1: All waters in this state, whether above or under the ground are hereby declared to be the property of the public, subject to all existing rights to the use thereof. 73-1-1: All waters in this state, whether above or under the ground are hereby declared to be the property of the public, subject to all existing rights to the use thereof.

31. Acquiring A Water Right 73-3-1(1) A person may acquire a right to the use of the unappropriated public waters in this state only as provided for in this title. 73-3-1(1) A person may acquire a right to the use of the unappropriated public waters in this state only as provided for in this title. Applications to Appropriate Applications to Appropriate Diligence Claims Diligence Claims Change Applications Change Applications Exchange Applications Exchange Applications Purchase as an appurtenance to land or as an individual right Purchase as an appurtenance to land or as an individual right

32. Perfecting a Water Right Application filed and approved Application filed and approved Diligently pursuing certification Diligently pursuing certification Extensions can be granted 14 year, 50 year Extensions can be granted 14 year, 50 year Diligence must be show or a reasonable cause for delay Diligence must be show or a reasonable cause for delay Proof submitted Proof submitted Certificate issued … continued use required Certificate issued … continued use required

33. Irrigation Return Flow Diversion = 4.0 Ac Ft/Ac ET = 2.0 Ac Ft/Ac Return Flow = 2.0 Ac Ft/Ac

34. Forfeiture 73-1-4(2)(a): Except as provided in Subsection (2)(b) (nonuse application) or (e) (exemptions from nonuse), when an appropriator or the appropriator’s successor in interest abandons or ceases to use all or a portion of a water right for a period of seven years, the water right or the unused portion of that water right is subject to forfeiture in accordance with Subsection (2)(c) (judicial action). 73-1-4(2)(a): Except as provided in Subsection (2)(b) (nonuse application) or (e) (exemptions from nonuse), when an appropriator or the appropriator’s successor in interest abandons or ceases to use all or a portion of a water right for a period of seven years, the water right or the unused portion of that water right is subject to forfeiture in accordance with Subsection (2)(c) (judicial action).

35. Change Applications 73-3-3(2)(a) … a person entitled to the use of water may make permanent or temporary changes in the point of diversion; place of use; or purpose of use for which the water was originally appropriated. 73-3-3(2)(a) … a person entitled to the use of water may make permanent or temporary changes in the point of diversion; place of use; or purpose of use for which the water was originally appropriated. A change may not be made if it impairs a vested water right without just compensation. A change may not be made if it impairs a vested water right without just compensation.

36. Changing an Irrigation Water Right to Industrial Uses Water right is for 100 acres of irrigation Water right is for 100 acres of irrigation 100 ac x 4.0 ac-ft /ac = 400 ac-ft 100 ac x 4.0 ac-ft /ac = 400 ac-ft Historical Depletion = 200 ac-ft Historical Depletion = 200 ac-ft Industrial use is 100% consumptive Therefore, diversion & depletion limited to 200 ac ft. Industrial use is 100% consumptive Therefore, diversion & depletion limited to 200 ac ft.

37. Paper Right Examples 1 cfs/ 60 acres irrigation. Spring source 1 cfs/ 60 acres irrigation. Spring source A. Spring flows full flow, full season – 240 af A. Spring flows full flow, full season – 240 af B. Spring only flows May and June – 120 af B. Spring only flows May and June – 120 af C. Spring only flows once every 5 years – C. Spring only flows once every 5 years – D. Used with 3 other rights all on the same 60 acres – D. Used with 3 other rights all on the same 60 acres – E. Spring flows full, full season, not used in 20 years E. Spring flows full, full season, not used in 20 years

38. Evaluation of a Water Right Major Elements Flow: 2.50 CFS Source: Spring Creek Use: Irrigation of 100 acres Period of Use: April 1-Oct 31 Major Elements Flow: 2.50 CFS Source: Spring Creek Use: Irrigation of 100 acres Period of Use: April 1-Oct 31 What is the beneficial use? What is the beneficial use? What are the diversion and depletion limitations? What are the diversion and depletion limitations?

39. 53-109 53-110 53-536 53-374 53-95

40. 11 Water Use Groups Unanswered Questions How much beneficial use does each water right contribute to each water use group? How much beneficial use does each water right contribute to each water use group? What is the total beneficial use in each water use group? What is the total beneficial use in each water use group? What is the sole supply of each water right? What is the sole supply of each water right? What is the total irrigated area? What is the total irrigated area?