HB 494 — Transfer of Water Interests

02-23HB0494S01 13:20compared H.B.with HB0494 {Omitted text} shows text that was in HB0494 but was omitted in HB0494S01 inserted text shows text that was not in HB0494 but was inserted into HB0494S01 DISCLAIMER:

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DougSometimes Owensthis Senateautomated Sponsor:comparison will NOT be completely accurate.

DerrinTherefore, R.you need to read the actual bills.

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Transfer of Water Interests GENERAL SESSION STATE OF UTAH Chief Sponsor:

Doug Owens Senate Sponsor:Derrin R.

None H Other Special Clauses:

B None 4 Utah Code Sections Affected:

9 HB0494 compared with HB0494S01 AMENDS:

16-6a-606,16-6a-606 , as last amended by Laws of Utah 2017, Chapter 358 73-1-10,73-1-10 , as last amended by Laws of Utah 2013, Chapter 363 73-1-11,73-1-11 , as last amended by Laws of Utah 2025, First Special Session, Chapter 17 H B Be it enacted by the Legislature of the state of Utah:

916-6a-606. 16-6a-606 .

4 (1) Except as provided in Subsection (3), and unless otherwise provided in the articles of incorporation or the bylaws, a member of a nonprofit corporation may not transfer:

or H.B.(b) any right arising from a membership.

494 02-23 13:20 (b) any right arising from a membership.

(3)(a)(3) (a) For a water company, unless otherwise provided by the articles of incorporation or bylaws[,] :

(i) ownership[ ]ownership of [shares] a share is transferrable[.] ;

- 2 - HB0494 compared with HB0494S01 (c) A person who receives a water company share transferred under this section assumes the obligation for any unpaid assessment related to the share.

(d) When by{by way of } a water company's articles of incorporation or bylaws authorize the water company designates{designates } to designate a specific unit of land or location on the unit of land to which the water company delivers{delivers } will deliver water, the designation obligates the water company to deliver water only to the unit of land or location so designated unless the water company consents in writing for the water to be delivered to a different unit of land or a different location.

-73-1-10. 2 - 02-23 13:20 H.B.

494 73-1-10 .

(1)(a)(1) (a) A [water right] person shall transfer a water right by deed in substantially the same manner as real estate, whether the water right is evidenced by:

(i) a[ ]a decree[,] ;

(ii) a[ ]a certificate of appropriation[,] ;

(iii) a[ [diligence]]a {[diligence{]} { Ĥ→ diligence} {} {diligence}{} ←Ĥ } claim to the use of surface or underground water[,] ;{ Ĥ→ [{} 71a{[} filed{filed with the ]} or ]} (iv) {{ ←Ĥ } { Ĥ→ [state} {} {[} {state engineer } a water user's claim filed in accordance{accordance with Section 73-5-13 or as otherwise provided by 72alaw} law]general determination proceedings{]} {} ←Ĥ ;} ;[{ or } , shall be transferred by deed in substantially the same manner as is real estate (iv) ]{a water user's claim filed in general determination proceedings} .

or(b) (iv)[{, ashall waterbe user'stransferred claimby fileddeed in generalsubstantially determinationthe proceedings[,same shallmanner as is real estate} The deed must be transferredrecorded by] A person shall record the deed described in substantiallySubsection (1)(a) {.} in the sameoffice mannerof asthe isrecorder realof estate].{(b)} {[} }:

(b)(i) [The[ ]{The deed must be recorded ]} Athe county where the point of diversion of the water is located{]} {A person shall record the deed described in Subsection (1)(a) in} ;{in the office of the recorder of:of} and{:

(i)- 3 - HB0494 compared with HB0494S01 {(i)} [{ the county where the point of diversion of the water is located;located} in ] (ii) {;

and[and} in ] (ii) the county where the water is used.

(c) {[{ in } A recorded deed of a water right shall from the time of [its]{]} {(ii)} [{the county where the deed'swater is used.} its {(c)} ] the deed's{A recorded deed of a water right shall from the time } recording in the office of the county recorder constitute notice of [its] the recorded deed'sdeed's{ recording in the office of the county recorder constitute notice of } contents to all persons.

(d)(i)(d) (i) {[{its} Beginning July 1, 2011, a deed under Subsection (1)(a) may include a water rights addendum as provided in Section 57-3-109.57-3-109.{]} the recorded deed's} (ii) { contents to all persons} The state engineer shall consider a water rights addendum that is recorded and forwarded to the state engineer by a county recorder, in accordance with Section 57-3-109, as a submitted report of water right conveyance under Subsection (3).

(ii)(2) The(a) stateA engineertransfer shallof considerownership of a watershare rightsof addendumstock thatin isa recordedwater andcompany, forwardedas todefined thein stateSection engineer16-4-102, byis aaccomplished countyonly recorder, in accordance with Section 57-3-109,16-6a-606. as a submitted report of water right conveyance under Subsection (3).

(2)(a)(b) AThe transferrecords of ownershipa ofwater acompany, shareand ofnot stockthe inrecords aof waterthe company,state asengineer, defineddetermine ina Sectionperson's 16-4-102,ownership isof accomplisheda onlyshare inof accordancestock within Sectionthe 16-6a-606.water company.

Ĥ→[{(d)} [(i)](2) (b){(i)} ←Ĥ{Beginning TheJuly records1, of2011, a} waterThe company,right andto not the recordsuse of thewater stateevidenced 90aby engineer,shares determineof stock in a person's{deed ownershipunder ofSubsection (1)(a) may include a sharewater ofrights stockaddendum as provided in Section 57-3-109} corporation shall be transferred in accordance with the waterprocedures company.applicable to securities set forth in Title 70A, Chapter 8, Uniform Commercial Code - Investment Securities.

[(2){(ii)} The] right(3) to(a) the{The usestate ofengineer watershall evidencedconsider bya shares} ofTo stockupdate inwater a{rights corporationaddendum shallthat beis transferredrecorded inand accordanceforwarded withto the} proceduresright applicableownership toon securitiesthe setrecords forthof inthe Titlestate 70A,engineer Chapter{by 8,} Uniform, Commerciala Code{county -recorder, Investmentin Securities.]accordance (3)(a)with ToSection update57-3-109, as } water right ownershipowner onshall thesubmit recordsa of{submitted the} statereport engineer,of a water right -conveyance 3{under -Subsection H.B.(3)} to the state engineer.

494{(2)} 02-23- 13:204 - HB0494 compared with HB0494S01 {(a)} {A transfer of ownership of a share of stock in a water company, as defined in Section 16-4-102, is accomplished only in accordance with Section 16-6a-606.} { Ĥ→ [(i)] (b) ←Ĥ } The records of a water company, and not the records of the state engineer, determine a person's ownership of a share of stock in the water company.} {[{(2)} (b) }The {report } right to the use of water {right conveyance } evidenced by shares of stock in a corporation shall be {on forms provided by } transferred in accordance with the {state engineer} procedures applicable to securities set forth in Title 70A, Chapter 8, Uniform Commercial Code - Investment Securities.{]} {(3)} (c) {(a)} To update water right ownership on the records of the state engineer, a water right owner } The report shall submit{submit a report of water right conveyance to the state engineer.engineer.} be prepared by:

(b){(b)} The(i) {The report of water right conveyance shall be on forms provided } or prepared under the direction of and certified by , any of the state{state engineer.engineer.} following persons licensed in Utah: