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S.B. 27 Enrolled
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LAKE POWELL PIPELINE DEVELOPMENT
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ACT
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2006 GENERAL SESSION
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STATE OF UTAH
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Chief Sponsor: Thomas V. Hatch
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House Sponsor:
David Clark
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LONG TITLE
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General Description:
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This bill authorizes the Board of Water Resources to build the Lake Powell Pipeline
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project.
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Highlighted Provisions:
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This bill:
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. enacts the Lake Powell Pipeline Development Act;
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. defines terms;
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. authorizes the Board of Water Resources to:
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. make rules;
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. build the Lake Powell Pipeline project; and
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. contract for the sale of developed water and operation of the project;
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. creates the Project Management Committee;
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. authorizes the building of hydroelectric generating works;
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. authorizes the water districts to use, exchange, or sell developed water; and
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. establishes an enterprise fund for the operation and maintenance of the project.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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None
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Utah Code Sections Affected:
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ENACTS:
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73-28-101, Utah Code Annotated 1953
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73-28-102, Utah Code Annotated 1953
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73-28-103, Utah Code Annotated 1953
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73-28-104, Utah Code Annotated 1953
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73-28-105, Utah Code Annotated 1953
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73-28-201, Utah Code Annotated 1953
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73-28-202, Utah Code Annotated 1953
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73-28-203, Utah Code Annotated 1953
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73-28-301, Utah Code Annotated 1953
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73-28-302, Utah Code Annotated 1953
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73-28-401, Utah Code Annotated 1953
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73-28-402, Utah Code Annotated 1953
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73-28-403, Utah Code Annotated 1953
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73-28-404, Utah Code Annotated 1953
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73-28-405, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
73-28-101
is enacted to read:
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CHAPTER 28. LAKE POWELL PIPELINE DEVELOPMENT ACT
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Part 1. General Provisions
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73-28-101. Title.
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This chapter is known as the "Lake Powell Pipeline Development Act."
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Section 2.
Section
73-28-102
is enacted to read:
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73-28-102. Scope.
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Nothing in this chapter may be construed to prevent any person, subject to other
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provisions of law, from developing the waters of the Colorado River.
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Section 3.
Section
73-28-103
is enacted to read:
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73-28-103. Definitions.
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As used in this chapter:
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(1) "Board" means the Board of Water Resources.
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(2) "Committee" means the Project Management Committee created in Section
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73-28-105
.
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(3) (a) "Construction costs" means all costs related to the construction of the project,
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including the environmental mitigation costs.
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(b) Construction costs include:
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(i) acquisition of land and rights-of-way;
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(ii) board and division expenses related to the project;
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(iii) compensation for impairment of existing water rights;
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(iv) construction of the project;
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(v) design;
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(vi) engineering;
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(vii) environmental studies;
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(viii) legal work;
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(ix) permitting;
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(x) planning; and
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(xi) rebuilding and relocating highways or other facilities affected by the project.
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(4) "Developed water" means surface water developed by the project.
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(5) "District" means:
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(a) the Central Iron County Water Conservancy District;
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(b) the Kane County Water Conservancy District;
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(c) the Washington County Water Conservancy District; or
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(d) any combination of those districts listed in Subsections (5)(a) through (c).
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(6) "Division" means the Division of Water Resources.
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(7) "Environmental mitigation costs" means costs associated with obtaining permits
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required by federal, state, or local governmental agencies.
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(8) "Preconstruction costs" means any of the following costs incurred before project
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construction begins:
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(a) planning;
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(b) design;
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(c) engineering studies;
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(d) legal work;
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(e) permitting;
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(f) acquisition of land and rights-of-way;
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(g) compensation for impairment of existing water rights;
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(h) environmental studies; or
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(i) any combination of Subsections (8)(a) through (h).
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(9) (a) "Project" means the Lake Powell Pipeline project and associated facilities,
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including:
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(i) facilities associated with environmental mitigation;
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(ii) hydroelectric generating works and incidental electrical facilities;
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(iii) pipelines; and
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(iv) pumping stations.
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(b) Notwithstanding Subsection (9)(a), associated facilities does not include the local
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facilities necessary for the treatment and local delivery of the developed water.
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(10) "Project costs" include preconstruction costs, construction costs, and project
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operation, maintenance, repair, and replacement costs.
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Section 4.
Section
73-28-104
is enacted to read:
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73-28-104. Powers of the board.
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(1) The board may contract with:
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(a) a district for the sale of developed water;
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(b) a qualified entity for the development or construction of the project; or
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(c) a district or other qualified entity for the operation, maintenance, repair, or
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replacement of the project.
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(2) By following the procedures and requirements of Title 63, Chapter 46a, Utah
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Administrative Rulemaking Act, the board may make rules to:
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(a) establish prices, in consultation with the committee and in accordance with Section
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73-28-403
, for:
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(i) developed water sold to the districts; and
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(ii) electricity made available by the project;
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(b) establish procedures for reviewing offers to contract for the sale of developed water
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and electricity;
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(c) establish the interest rate for repayment of preconstruction and construction costs;
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(d) establish a reasonable time period for the districts to offer to purchase water; and
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(e) administer and operate the project.
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(3) The board may exercise eminent domain, as provided in Title 78, Chapter 34,
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Eminent Domain, to construct the project.
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Section 5.
Section
73-28-105
is enacted to read:
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73-28-105. Project Management Committee created.
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(1) There is created a Project Management Committee within the division.
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(2) (a) The committee shall be comprised of one representative appointed by:
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(i) the division director;
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(ii) the board; and
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(iii) each of the participating districts.
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(b) The division representative is the chair of the committee.
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(3) (a) The members shall serve a four-year term.
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(b) When a vacancy occurs in the membership for any reason, the replacement shall be
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appointed for the unexpired term in the same manner as the vacated member was appointed.
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(4) (a) A majority of the members of the committee constitute a quorum of the
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committee.
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(b) The action of a majority of a quorum constitutes the action of the committee.
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(5) The committee shall:
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(a) consult with the board on a regular basis concerning:
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(i) the development and construction of the project;
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(ii) the operation, maintenance, repair, and replacement of the project; and
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(iii) the prices of developed water and electricity; and
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(b) approve all expenditures from the fund created in Section
73-28-404
.
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Section 6.
Section
73-28-201
is enacted to read:
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Part 2. Board of Water Resources to Construct the Lake Powell Pipeline
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73-28-201. Lake Powell Pipeline project.
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(1) The board shall:
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(a) construct the project as funded by the Legislature;
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(b) own, operate, and maintain the project until the title is transferred under Section
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73-28-405
; and
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(c) consult with the committee on a regular basis concerning the development,
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construction, operation, maintenance, repair, and replacement of the project.
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(2) (a) The board may contract with the state of Arizona to participate in the project to
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develop its water rights.
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(b) The board shall ensure that the contract requires the state of Arizona to pay for all
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project costs represented by its share of the project.
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Section 7.
Section
73-28-202
is enacted to read:
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73-28-202. Construction contingent upon sale of water.
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(1) Except as provided in Subsection (3), the board may not expend monies for
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construction costs for any phase of the project until:
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(a) the board has contracted with the districts for the sale of at least 70% of the water
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developed by that phase of the project; and
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(b) all permits required by the environmental impact statement have been obtained.
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(2) Construction of the project and implementation of any environmental mitigation
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requirements may proceed concurrently.
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(3) The board may make expenditures for preconstruction costs if monies are expressly
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appropriated or earmarked by statute for that purpose by the Legislature.
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Section 8.
Section
73-28-203
is enacted to read:
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73-28-203. Development of hydroelectric generating works -- Electricity offered to
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public utilities or municipalities.
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(1) The board may construct and own hydroelectric generating works and incidental
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electrical facilities in association with the project.
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(2) (a) Except for electricity needed for project operations, the board shall first offer to
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sell electricity derived from any hydroelectric generating works owned by it to public utilities
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or municipalities providing electricity to consumers in Utah.
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(b) The board, in consultation with the committee and in accordance with Section
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73-28-403
, shall establish the prices at which the electricity is sold.
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(3) In accordance with Section
51-4-1
, the board shall deposit:
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(a) revenues received from the sale of electricity designated for the repayment of
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preconstruction and construction costs and interest into the Water Resources Conservation and
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Development Fund;
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(b) revenues received from the sale of electricity designated for project operation,
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maintenance, repair, and replacement costs into the Lake Powell Pipeline Project Operation
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and Maintenance Fund; and
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(c) any additional revenues received from the sale of electricity into the Water
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Resources Conservation and Development Fund.
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Section 9.
Section
73-28-301
is enacted to read:
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Part 3. Allocation of Developed Water
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73-28-301. Entities eligible to receive developed water.
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(1) Except for developed water reserved for wildlife or public recreation, the board
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shall make the developed water available by contract exclusively to the districts listed in
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Subsection
73-28-103
(5).
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(2) A district that purchases developed water may:
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(a) use the water directly;
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(b) exchange the water by following the procedures and requirements of Section
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73-3-20
; or
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(c) sell the water to any entity or person.
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(3) Districts purchasing developed water shall build any facilities necessary for the
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treatment and local delivery of the developed water.
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Section 10.
Section
73-28-302
is enacted to read:
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73-28-302. Limits on amount of water available to any district -- Exception.
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(1) Except as provided in Subsection (2), the total amount of developed water that the
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board may make available to any district is limited as follows:
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(a) The Kane Water Conservancy District may purchase no more than 10,000 acre-feet
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of developed water per calendar year.
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(b) The Washington County Water Conservancy District may purchase no more than
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69,000 acre-feet of developed water per calendar year.
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(c) The Central Iron County Water Conservancy District may purchase no more than
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the amount of Colorado River water it acquires.
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(2) (a) A district may purchase developed water in excess of the limits specified in
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Subsection (1) for that calendar year if:
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(i) developed water is available; and
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(ii) no other district eligible to receive the developed water has offered to purchase it.
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(b) The board may expand the size of the project and exceed the limits in Subsection
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(1) if the board or a district acquires additional water rights.
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(3) Before beginning the final design of the project, the board shall make rules
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establishing a reasonable time during which the districts may offer to purchase developed
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water.
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(4) If the Central Iron County Water Conservancy District acquires water rights and
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participates in the project, the board shall ensure that:
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(a) the project is sized and constructed to transport the Central Iron County Water
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Conservancy District's water from Lake Powell; and
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(b) facilities from Washington County to Cedar City are included in the project.
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Section 11.
Section
73-28-401
is enacted to read:
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Part 4. Financing and Cost Recovery
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73-28-401. Analysis of benefits and costs -- Allocation of costs.
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(1) The board shall allocate project costs based on the economic costs and benefits of
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the developed water and electricity among the following water uses:
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(a) municipal and industrial;
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(b) electricity;
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(c) public recreation; and
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(d) fish and wildlife.
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(2) The state shall pay the nonreimbursable project costs allocated to recreation and
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fish and wildlife.
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Section 12.
Section
73-28-402
is enacted to read:
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73-28-402. Agreement for delivery -- Period for repayment of costs.
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(1) The board and each district shall establish by contract the timing and amount of
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developed water to be delivered to the district.
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(2) If a contract was made before the project's completion, the district shall repay the
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preconstruction and construction costs within 50 years from the date of:
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(a) the delivery of developed water to the district during the first ten years after the
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project is completed; or
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(b) the project's completion for any developed water delivered to the district after the
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tenth anniversary date of the project's completion.
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(3) If a contract was made after the project's completion date, the district shall repay
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the preconstruction and construction costs within a period not to exceed 50 years from the date
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that the contract was made.
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(4) The board shall establish and charge a reasonable interest rate for the unpaid
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balance of reimbursable preconstruction and construction costs.
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Section 13.
Section
73-28-403
is enacted to read:
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73-28-403. Water and electricity charges.
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The board, in consultation with the committee, shall establish prices for the developed
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water sold to the districts and electricity sufficient to:
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(1) recover the reimbursable preconstruction costs, construction costs, and interest on
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those costs within the time period specified in Section
73-28-402
;
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(2) pay for operation and maintenance costs;
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(3) accumulate an adequate reserve for repair and replacement; and
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(4) allocate the proportionate cost of the project facilities required to deliver the
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developed water to each district.
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Section 14.
Section
73-28-404
is enacted to read:
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73-28-404. Repayments returned to Water Resources Conservation and
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Development Fund -- Establishment of an enterprise fund.
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(1) The board shall deposit, in accordance with Section
51-4-1
, into the Water
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Resources Conservation and Development Fund:
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(a) repayments of preconstruction and construction costs; and
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(b) the interest charged.
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(2) (a) There is created an enterprise fund, as defined in Subsection
51-5-4
(8), entitled
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the "Lake Powell Pipeline Project Operation and Maintenance Fund."
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(b) The fund consists of:
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(i) revenues received from the sale of developed water that is designated for project
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operation, maintenance, repair, and replacement costs;
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(ii) revenues received from the sale of electricity that are deposited in the fund in
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accordance with Subsection
73-28-203
(3); and
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(iii) all interest earned by the fund.
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(3) (a) Any unexpended monies remaining in the fund at the end of the fiscal year are
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nonlapsing.
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(b) Notwithstanding Section
63-38-3.6
, the Legislature may not appropriate any monies
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from the Lake Powell Pipeline Project Operation and Maintenance Fund.
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(4) The state treasurer shall:
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(a) invest the monies in the enterprise fund by following the procedures and
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requirements of Title 51, Chapter 7, State Money Management Act; and
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(b) deposit all interest or other earnings derived from those investments into the Lake
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Powell Pipeline Operation and Maintenance Fund.
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(5) The committee shall approve the expenditure of fund monies to cover the project
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operation, maintenance, repair, and replacement costs, subject to:
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(a) monies available in the fund; and
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(b) rules established by the board under Subsection
73-28-104
(2).
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(6) If title to the project is transferred under Section
73-28-405
, the agreement shall
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direct the disposition of the monies remaining in the fund.
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Section 15.
Section
73-28-405
is enacted to read:
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73-28-405. Transfer of title to project and water rights to districts.
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(1) The board shall convey the project's title and its associated water rights to the
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districts if:
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(a) the state has been fully compensated for all of its reimbursable costs;
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(b) the board finds that the conveyance of the project's title would be in the best interest
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of the state, the districts, and those receiving developed water; and
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(c) the districts enter into an agreement with each other and the board that would
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ensure the continued operation, maintenance, repair, and replacement of the project.
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(2) The board shall convey the project's title and its associated water rights to the
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districts in proportion to the amount each district paid for the developed water it received.
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