Water; the life blood of a community. Lose it and a community can wither and die. Some in Carbon and Emery counties are afraid that a bill coursing its way through the Utah Legislature this year will do just that.
Representative Kay McIff, the bill sponsor, disagrees and feels there is much misinformation floating about.
House Bill 49: Water Right – Change Application Amendments proposes a change to the way that water rights in irrigation companies may be transferred. In the state of Utah, 80 percent of water rights are held by shareholders for irrigation use, according to Division of Water Rights Deputy State Engineer Boyd Clayton.
According to the Division of Water rights, a water right is a stock in a mutual irrigation company. Many irrigation companies exist in Utah, which own water rights used by their shareholders. The amount of water the company allows each shareholder to divert is usually determined by the company stock shares owned or rented by that shareholder. Shares in an irrigation company are not water rights. The company collectively owns the water rights, the benefits from which are distributed to the shareholders.
Clayton explained as it stands currently, a shareholder in a water company can ask the water company for permission to transfer the water associated with the shareholders ownership out of the company. The water company can agree, disagree or not respond. If the company says no or does not respond, the shareholder must engage legal help to fight that.
Clayton said he has had many discussions with Rep. McIff and said what appears to be driving the bill is a need to balance the playing field for the shareholders. The bill is set to force a quick response from the water companies. If the shareholder does not agree with the response, they may then take their request to the state engineer at the Division of Water Rights for a ruling.
Rep. McIff echoed that interpretation and said that he is in no way trying to undermine water companies, he is just looking to force them away from using “no response” as a way to deal with shareholders requests to move water shares.
“This will change the fundamental process so that both sides will have to lay their cards on the table and justify their decisions.,” he explained. “If moving the rights will hurt the water company, then I will back them up.”
He also stated he has good buy in from water companies in the Richfield area after he went over his bill line for line so they could understand what he was trying to do.
Emery County Water Conservancy District Manager Jay Humphrey does not agree with the direction the bill is going. He said this bill does nothing to help the citizens of either Carbon or Emery counties. He worries the change could devastate the irrigation companies if shareholders can take their water and move it elsewhere at will. Humphrey cites that Pacific Corp is a large owner of water shares in the county and if they quit producing power in the area, they could pull those rights and it would be a disaster for Emery County.
Humphrey also said he has had discussions with McIff over the course of the last several years and expressed his opposition to this bill, but is not sure what the underlying driving force is to keep it moving forward. He stated that all the irrigation companies and the Farm Bureau oppose this bill. Humphrey agreed that the bill would force the irrigation companies to be more responsive, but the bill goes too far in taking any ability of a water company to say “no” away.
“Emery County is totally scared of what this might do to the economy,” Humphrey stated. “I see no benefit to the area. He (McIff) is supposed to represent our area and he should be listening to his constituents.”
Humphrey said that 95 percent of all water requests with industry have been worked out without any conflict. He explained that in 1972, three water companies worked hand-in-hand with Pacific Corp to assure them the rights they needed. It was positive for all parties involved. Emery County’s water resources were worth about $14 million in 1962, before Joe’s Valley water project was complete. It is now worth over two billion as a result of the water development in the county.
“This bill could be completely devastating for any community with large industrial users,” said Brock Johansen, a concerned shareholder in an Emery County irrigation company. “Irrigation companies design their systems and their loan payments based upon the water owned by the company and the owners of the company. To pay for the systems, the companies assume that the users and water will stay in the system. In particular, many loans are structured around funds received from industrial users. This bill would allow these users to transfer water out of the system, potentially leaving the other shareholders on the hook for the payment of the loans and could also leave a company with insufficient water to operate its system.”
Johansen clarified the bill with a simple analogy. “Let’s say that a group of people pool their money to form a company that builds a building. Then one of the owners decides that he wants out of the company, so he asks for a law allowing him to take his portion of the bricks in the building out of the building, which would ruin the building,” he explained. “This is exactly what the change in law would allow. These irrigation companies were formed by people pooling their water. Then, based on this pooling, millions of dollars were invested on building systems. Now people are trying to strip these companies of the water, which will decimate the actual pool and the systems that were built. The shareholders own a portion of the irrigation company, not an actual water right that can be moved out of the system.”
Division of Water Rights Deputy State Engineer Clayton admitted that if he had shares in an irrigation company, he would oppose the bill. The foundation of an irrigation company is based on the water rights as a whole, when some are pulled out, it affects the rest of the water use. A fragmented use affects the ability to set prices, adjust water use and economic growth.
No matter which side of the canal a person sits on, the time to take action is running out. HB49 has made it through the subcommittee with substitution language and is currently scheduled for its third reading in the house. No date for that is available.
To voice your opinion on this bill, can contact Representative McIff at (801) 608-4331 or e-mail at kaymciff@le.utah.gov. McIff represents Emery, Grand, Sanpete and Sevier counties.