It is not without controversy, its naysayers and organizations opposed to the new tax burden it imposes on extraction industries operating on the Great Salt Lake, but a legislative measure advanced Tuesday out of a Senate legislative committee.
Rep. Casey Snider, R-Paradise, said reforms contained in HB453 are badly needed if there is a common goal to restore the health of the Great Salt Lake.
“I want to make sure that the committee is fully aware under the current statutory framework that every drop of water that we save through conservation is available for extraction. Every drop of agricultural water that we send to the Great Salt Lake because of our efficiencies is available for extraction. Everything that a city, municipality or anyone does to save water does nothing more than set additional water aside for extraction as it sits right now,” he said.
“Industry has the ability to take the lake to zero.”
Snider said there is nothing “nefarious” in the way the system is set up, it has simply been that way because the Great Salt Lake has had enough water over the years.
Since it has dropped to historic lows — and the state Legislature has spent nearly a billion dollars over the last two years to help the lake and the state with water conservation — changes are necessary.
The measure proposes to set up a distribution management plan, which is in place for other water bodies in the state, including Utah Lake and for water in Iron County.
“What this will do is make sure that there is fairness in the Great Salt Lake system for all users and it will ensure that the doctrine of prior appropriation will be instilled there and hopefully (invoke) a process which will also allow these companies to operate now,” he said.
He’s had pushback from some mineral extraction companies about the new rules that are proposed.
Snider, who hails from a rural community and has been involved in public land issues for years, said his response has been to stress there has to be a responsibility embraced by all to arrive at solutions to the Great Salt Lake’s ailing condition. And, he added, he tells them: “Welcome to agriculture.”
Water for crops, cities and extraction
Agriculture has long been the target to blame for the depletion of the Great Salt Lake, which has reached historic lows and diminished to half its size.
While there has been emphasis on municipal water savings with secondary water metering, turf replacement programs and pushing for xeriscaping on new development, the extraction industries operating on the Great Salt Lake have generally been overlooked, Snider said.
Lawmakers, however, have begun to take notice — with House Speaker Mike Schultz, R-Hooper, comparing some of the actions to the “wild wild West.”
Snider said while some operators have been open to negotiations over provisions in the bill, others have not.
Rhonda Anderson Lauritzen, executive vice president of Mineral Resources International, spoke to some of the inequities in mineral extraction on the lake and said she favors the bill.
She said 10 companies are in the mineral extraction industry on the lake, using 703,000 acre-feet of water. Two of those companies have 700,000 acre-feet of water, while the rest are left with what remains.
As is the case of the prior appropriation doctrine, senior water rights holders are the last to have to curtail that water use in years of water shortages. That leaves others not being able to put a straw in the bucket and at a perpetual disadvantage.
Severance taxes, royalty rates and fairness
Snider’s bill also proposes to increase the severance tax for these companies from 2.6% to 7.8%, which is on top of the royalty rate already assessed.
Sen. Gregg Buxton, R-Roy, said that is cause for concern, and he ultimately voted not to advance the bill.
“That is a pretty big hit,” he said.
Rusty Cannon, with the Utah Taxpayers Association, also argued against the measure due to the tax provisions.
“If you’re trying to encourage more of something, you should tax it less — this is going in exactly the opposite direction. And that’s our concern. As has been mentioned, a rate somewhat tripling or whatever ends up happening, we think is detrimental to good tax policy,” he added.
The bill, which has already passed a House committee and received a 7-1 vote out of the Senate Natural Resources, Agriculture and Environment Committee, advances to the House for additional consideration.
