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Bill Detail: SB22-029

 

Title Investment Water Speculation
Status Senate Committee on Agriculture & Natural Resources Lay Over Amended (04/21/2022)
Bill Subjects
  • Water
House Sponsors K. McCormick (D)
Senate Sponsors D. Coram (R)
K. Donovan (D)
House Committee
Senate Committee Agriculture and Natural Resources
Date Introduced 01/12/2022
Summary

Water Resources Review Committee. Section 1 of the bill
prohibits a purchaser of agricultural water rights that are represented by
shares in a mutual ditch company from engaging in investment water
speculation. Investment water speculation is the purchase of agricultural
water rights that are represented by shares in a mutual ditch company in
the state with the intent, at the time of purchase, to profit from an increase
in the water's value in a subsequent transaction or by receiving payment
from another person for nonuse of all or a portion of the water subject to

the water right.
On or after January 1, 2023, the state engineer or the state
engineer's designee (state engineer) may investigate complaints of
investment water speculation. If a purchaser holds, or by virtue of a
proposed sale or transfer, will hold at least a minimum percent of the
shares in a mutual ditch company, about which minimum percent the
mutual ditch company must determine and notify the state engineer on or
before December 31, 2022, there is a rebuttable presumption that the
purchaser is engaged in investment water speculation. The state engineer
may fine a purchaser up to $10,000 for a violation and require, for a
period of up to 2 years after a fine has been imposed, that any sale or
transfer of shares in a mutual ditch company to the purchaser be subject
to approval by the state engineer.
If the state engineer believes that a complaint is frivolous or was
filed for the purpose of harassing a seller or purchaser, the state engineer
may refer the matter to the attorney general's office for the attorney
general or the attorney general's designee (attorney general) to investigate
and, if the attorney general determines that enforcement is warranted,
bring a civil action in a court of competent jurisdiction alleging the
complaint is frivolous or was filed for the purpose of harassment. If the
attorney general prevails in the civil action, the court may fine a
complainant up to $1,000, prohibit the complainant from filing any
complaints alleging investment water speculation for up to one year, and
grant attorney fees and court costs. Section 3 authorizes the attorney
general to bring a civil action against a complainant if the state engineer
refers the matter to the attorney general.
Section 2 requires the board of directors of a mutual ditch
company to determine the minimum percent of agricultural water rights
held by all of the shareholders in the mutual ditch company that a
purchaser holds or, by virtue of the sale or transfer of shares in the mutual
ditch company, will hold that creates a rebuttable presumption that the
purchaser is engaging in investment water speculation.

Committee Reports
with Amendments
None
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