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Water Share Right Mutual Ditch Corporation

Concerning the use of a water right obtained through a mutual ditch corporation.
2021 Regular Session
Business & Economic Development
Natural Resources & Environment
Bill Summary

For a mutual ditch corporation, the bill creates a presumption, which may be changed by changing the corporation's articles of incorporation or bylaws, that the shares of stock owned by a stockholder in the corporation represent:

  • The right to use the water rights appropriated or purchased by the corporation; and
  • Corresponding rights to divert and deliver the stockholder's water rights through a ditch, canal, reservoir, or other works.

The bill also authorizes these water rights to be limited to a pro rata amount at times when shareholder demand exceeds available supply. A mutual ditch corporation may operate using traditional ditch operating practices.The bill clarifies that:

  • When a shareholder is not using some of or all of the available water under the shareholder's rights, the right to use the water rights does not include the right to prevent other stockholders from using any portion of the corporation's water rights; and
  • The statutes covering ditch and reservoir companies do not prevent a stockholder from changing the use of the stockholder's shares or change the standards for water court approval to change a water right.

The bill authorizes a mutual ditch corporation to deliver direct flow water to only water-requesting stockholders. Consistent with each stockholder's request and the available water supply, a mutual ditch corporation may provide water at rates of flow greater or less than each stockholder's pro-rata ownership. When total stockholder demand exceeds available water supply, a mutual ditch corporation must provide, to the extent possible, a pro rata amount of water to all stockholders that are requesting water.

If a water court decree authorizes a change in water use in a mutual ditch corporation and the decree contains volumetric limits, water diverted and delivered by the mutual ditch corporation only counts against the changed stockholder's volumetric limits if the stockholder takes delivery in accordance with the change in use decree.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)




Bill Text