Implementation of HB 25 - Water Law and Policy Seminars

1. Implementation Under HB 25 – Quantity Impairment Water Law and Policy SeminarsKent L. Jones, P.E. March 14, 2016 State Engineer

2. Jensen v Jones • Supreme Court Decision 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.

3. 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. • “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.

4. Jensen v Jones • Change application before the State Engineer was denied because no beneficial use of the water could be identified. Appeared 1954 was the last time it may have been used. • Supreme Court ruled that water rights are not forfeited except by court ruling and that loss by forfeiture couldn’t be considered by the State Engineer in a change application proceeding. • Gave the State Engineer options to pursue should a right appear to have not been used for longer than 7 years.

5. Jensen v Jones (continued) • State Engineer may bring suit to enjoin unlawful appropriation and diversion. • State Engineer may stay a change pending resolution of such adjudication. • State Engineer can grant conditional approval of a change application. • Cannot simply declare that a forfeiture has occurred and thereby deny the change application.

6. Jensen v Jones/ Big Ditch • 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 • Intent language given from the legislature

7. HB 51 Intent Language 2008 • 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.”

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

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

10. Quantity Impairment • 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 • Enlarging the quantity of water depleted by the proposed nature of use when compared with the current nature of use

11. Who Can File A Change Application? • A Person Entitled To The Use Of Water: • the holder of an approved but unperfected application to appropriate water; • the record owner of a perfected water right; • a person who has written authorization from a person described in Subsection (1)(b)(i) or (ii) to file a change application on that person's behalf; or • a shareholder in a water company who is authorized to file a change application in accordance with Section 73-3-3.5

12. HB 25 Water Law – Application Revisions • 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 (73-3-3; 73-3-8) • The change does not impair an existing right without just compensation or mitigation • The State Engineer approves the application.

13. Temporary Change Applications • The State Engineer shall investigate all Temporary (1 year) Change Applications. • If there is reason to believe there will be no impairment – APPROVE; • If reason to believe there will be impairment _ DENY.

14. Permanent Change Applications • The State Engineer shall follow the same procedures for approving applications to appropriate. • May condition approval to prevent an enlargement of the quantity of water depleted by the proposed nature of use; • May not include a reduction in the diversion rate solely to account for the difference in depletion.

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 73-3-8including: • That the change will not cause a specific existing right to experience quantity impairment; or • Rebutting the presumption of quantity impairment described in Subsection 73-3-8(6)(c).

16. HB 25 Water Law – Application Revisions • Rebuttable Presumption • Quantity Impairment • For a period of at least 7 years • Not diverted from the approved point of diversion; nor • Beneficially used at the approved place of use.

17. HB 25 Water Law – Application Revisions • Quantity Impairment under the rebuttable presumption may not be considered unless raised in a: • 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. • All rights don’t have to be identified.

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

19. HB 25 Water Law – Application Revisions • What To Expect: • 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 • Notifications will be sent within 90 days of filing or other water users must protest • Statutory requirements will be followed. • The GATEKEEPER is back…

20. Processing Change Applications Under HB 25 • Directions given to staff: • Nonuse and Change Applications Feb. 18, 2015 • Staff Consultations April 30, 2015 • Quantity Impairment June 23, 2015

21. Processing Change Applications Under HB 25 • Nonuse and Change Applications • Implemented HB 25 processes early . • Watched for protests concerning nonuse. • Sent notice within 90 days identifying impaired rights and nonuse concerns. • Sent notices to those potentially impaired.

22. Processing Change Applications Under HB 25 • Nonuse and Change Applications • Deferred action until HB25 enacted. • Clarification of concept embedded in statute. • 22 Change applications filed prior to the enactment of HB25 with nonuse issues. • Change can’t be made if it impairs. • If change pursued, forfeiture action will have to be initiated.

23. Processing Change Applications Under HB 25 • Staff Consultations • Consultation has always been part of our process. • In law now to acknowledge that all have a right to consultation. • In change statute, but we will apply it to all applications as we have in the past. • Pre-filing consultations nonbinding and are not part of the record.

24. Processing Change Applications Under HB 25 • Staff Consultations • Post-filing consultations should be documented and made part of the record and available to all parties. • Consultations can occur in the Salt Lake office or in the regional offices. • Signs have been provided in each of our offices acknowledging this service is provided.

25. Processing Change Applications Under HB 25 • Quantity Impairment – Nonuse Concerns • Protested during the protest period • Within 90 days, state engineer raises nonuse concerns • Rebuttable presumption of impairment based on nonuse • Notice sent to applicant and those thought to experience impairment • Not all rights have to be identified

26. Processing Change Applications Under HB 25 • Quantity Impairment – Rebuttable Presumption • Burden of persuasion shifts to the applicant to overcome the presumption of impairment • Show that the water has actually been beneficially used • Demonstrate that the nonuse was excused by statute • Mitigation can be provided or show physical constraints prevent impairment

27. Questions Questions?

28. Beneficial Use • What can be done to compensate agricultural users for conserving water? • Concern expressed that if we don’t divert all the water we are entitled to the state engineer will take the water away from us • Issue being discussed amongst legislators and may be a topic this session. • It’s important to understand the nature of a water right

29. 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. • Involves an amount of water and the purpose to which you are using the water.

30. Garner v Anderson 67 Utah 553, 248 P.496(1926) “The appropriator of water doesnot acquire title to the corpus of the water but acquires only the right to use the quantity reasonably necessary to mature the crops and for other beneficial purposes. Regardless of the amount of water originally appropriated or historically used, the amount reasonably necessary is the limitationof the quantity appropriated.” Becker v Marble Creek Irrigation Company 15 Utah 225, 49P. 892 (1897) “The rights of a prior appropriator are fixed by the extent of his appropriation for a beneficial use. His right being fixed, he cannot enlarge his rights to the detriment of junior appropriators by increasing his demands or by extending his use to other lands, even if used for a beneficial purpose.” Court Directives

31. Mitchell v Spanish Fork West Field Irrigation Company 1 Utah 2d 313, 265 P.2d 1016 (1954) “The quantity of water acquired under a water right is limited to that amount beneficially used on the land upon which the use was established.” Mt. Olivet Cemetery Ass’n v Salt Lake City 65 Utah 193, P. 1876 (1925) “The extent of the right of an appropriator is limited to his reasonable necessities. The diversion and use of water creates a legal right only to the quantity necessary for the use.” Court Directives

32. Irrigation Efficiency Improvements Where does “saved” water come from? Where should it go?

33. Beneficial Use • What is the amount of water reasonably necessary? • Duty of water is established upon a 50% efficient flood irrigated system which provided that carrier water and inefficient water distribution would allow for enough water to irrigate the allowed acreage. • What happens to that amount of water that is not used by the crops?

34. Irrigation Water Use Concepts

35. Reducing Waste to Maximize Benefit is Encouraged.Reducing Waste to Enlarge Use Impairs Other Rights

36. Beneficial Use • Each type of use has an associated impact to the hydrologic system. • 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.

37. Beneficial Use • It’s critical to keep return flows in balance. • Downstream rights are dependent on return flows. • If a determination can be made that historical depletions are not exceeded, some type of compensation could be considered if it can be assured that downstream rights will not be impaired.

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

39. Delta Canal Company et al vs Frank Vincent Family Ranch • 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.”