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Agricultural Water Transition Amendments

⭐⭐ It is a 500-acre alfalfa outfit putting 80 acres into grazed pasture and berries, drying the other 420, and clearing $107,383 a year against the $47,250 it makes now on all five hundred. Two and a quarter times the money on sixteen percent of the water, and the family is still standing on the ground.

All it needs is a butcher, a baker and a candlestick maker. The other bill takes the discount away — this one builds the chiller, the cooler and the butcher, because the crop was never the problem.

$322 Mappropriated
3%the loan rate
0crops named
0rights curtailed
800,000acre-feet a year
$85per acre-foot, cheapest line

What this is

A working draft of a companion bill. The state pays the capital cost of converting an irrigated acre away from its current use, lends the rest at three percent, and then leases the water that conversion frees — every year, instream, all the way to the lake.

This was not drafted by a lawyer and it is not legal advice. It was drafted by a layman with machine assistance, against the live Utah Code. It is published in order to be corrected. Every figure below comes out of a script you can run, and every source in it is public and none of it is ours.

The programme it amends already exists. Utah enacted the Agricultural Water Optimization Act at 73-10g-201 and appropriated $200 million to it. As of November 2024, $48 million was obligated across 209 projects and $152 million was still sitting there. This bill is mostly instructions for money the state has already set aside and not yet spent.

The specification, and the correction

The HIL's specification for the berry was water-wise perma-hydro hugelkultur vertical-mounded shaded-by-solar passively-geo-cooled strawberries.

The human in the loop was wrong. Two of those cost more than everything else combined, and the berry is a labour business wearing a water business's clothes. What survived the arithmetic is better than what went into it — and it is not a crop at all.

Why alfalfa wins, and it is not agronomy

Alfalfa is shelf-stable, mechanised, and sells to anyone on any day. Everything that would replace it needs the same thing, and it is not water. A cherry, a peach, a bunch of cut flowers, a hundredweight of onions and a finished steer all need cold, a place to be cut or packed, and a van going somewhere on Thursday.

So the commodity does not survive because it is the best use of an acre. It survives because it is the only crop that does not need the plant this state stopped building fifty years ago. Every water-retirement scheme in the West has been an argument about which crop to plant, aimed at a farmer whose real constraint was a cold room he does not have.

Build the process and distribution and the conversion happens on its own. Nobody has to be paid to stop growing alfalfa. They have to be able to sell something else on Thursday.

What the money actually buys

Not a crop. Four pieces of plant, sized for a valley rather than a continent:

the piecewhat it unlocks
chillers — field heat off within the houronions, garlic, potatoes, orchard fruit, cut flowers
coolers — hanging and aging spacepasture-raised, grass-finished beef and lamb
the butcher — a licensed small-scale kill floorevery animal that currently ships out of state to be cut and ships back
the spur — aggregation, pack, and a van routea farm too small to interest a distributor

⭐⭐ Owned by the farms it serves. A co-operative, one member one vote, capitalised by a grant to get it standing and patient-money loans at three percent to pay it off. Not a company that buys from farmers — a facility that belongs to them. The grant is the part the state keeps, because the state is the one getting the water; the loan is the part that becomes a business, because the farmer keeps the upside.

And it must never be the employer and the landlord and the only buyer at once. That is a company store with a nicer sign. Separate the co-operative that owns the cold room from anyone who owns the ground, publish the schedule of charges, and let a member sell somewhere else on a Tuesday.

The chiller is a hole in the ground

A ground-to-air heat exchanger costs $4.25 to $7.14 a square foot under greenhouse glass. Buy one for an open acre and it is $185,000 to $311,000 of buried pipe, fans and electrical. So don't buy one.

Three hundred cubic yards of earth, four feet deep, is the thermal mass a climate battery pays fans to reach. The mound is the battery. The line item is corrugated tube and a day with a machine: $900.

A two-hundred-fold cost reduction, achieved by shaping dirt instead of buying a machine to do what dirt already does. Below grade a cold room holds temperature because the ground is fifty-five degrees in August and fifty-five degrees in January. The same move as rejecting heat to rock instead of evaporating water, and as digging a hole to make head instead of building a dam. The physics is free. The machine is the markup.

And the same buried tube runs backwards. Fifty-five degrees is cold in August and warm in February. A passive geothermal greenhouse is the identical hole with glass on top — which is how the bill buys a growing season instead of only a shelf life.

And the cheapest envelope is the one already standing

The farmhouse is the hardest building on the place to heat. Single brick or balloon frame, no insulation worth the name, a furnace fighting January through a wall built in 1912. Every retrofit anyone proposes ends with tearing into a historic structure and losing what made it worth keeping.

So don't touch it. Wrap it. Glass onto the south face and the two flanks, tied into the same buried tube that runs the cold room, and the old house stops being a building in the weather — it is now a thermal mass sitting indoors. Its terrible envelope no longer matters, because there is no longer any outside on that side of it.

⭐⭐ The house heats the greenhouse at night and the greenhouse heats the house all day, and the original structure is preserved exactly — not restored, not gutted, not re-clad. Wrapped. A hundred-year-old farmhouse with a bad furnace becomes the warmest building in the county, and the growing space starts at the kitchen door.

Which is where "perma-ponic passive geo building envelope" stops being three words stapled together and turns into one object: the mound, the glass, the pond and the house are a single thermal machine, and each piece is doing a job for the other three. The tropics, in Cache Valley, in February, around a farmhouse nobody had to modernise.

The same deal, pointed at the panels

Utah needs megawatts faster than it can retire coal, and the queue for a grid connection runs eighteen to twenty-two months. A farm with a water right, a substation in reach and a hole already dug is the site that skips it.

So the bill leases rather than builds. The farmer is paid to host generation — panels over the parking and the south slope, a turbine on a fencerow — and private capital brings the hardware on exactly the terms the farmer gets: a grant to stand it up, and the rest at three percent.

Which sets the downside where it belongs. If it lands, the state is repaid at three percent and the coal plant runs less. If it goes bust, the state has covered a dig and a greenhouse — and the farmer's worst case is some junk to haul off, on ground he still owns.

Agrivoltaic means the shade is a feature, not a sacrifice. Panels over the road, the yard and the slope — never the good field — and a shaded crop transpires less, which is the second time this bill saves water without asking anyone to farm less.

Start with what was already grown here

When these water rights were written, this valley fed itself. Onions, garlic, potatoes, sugar beets, small grains, orchard fruit, dairy, and cattle on pasture — not as a heritage exhibit, as the ordinary economy. Then the processing left, and what remained was the crop that could be baled and shipped anywhere.

Cherries are not the opening. Tart cherries already run under a marketing order — growers fight for allotment, and anyone in the industry knows it. Widening that structure to crops that have none is the move; holding cherries up as the opportunity is not.

The opening is what has no order and no plant: pasture-raised, grass-finished local beef. Onions, garlic, potatoes. Cut flowers, which are pure margin and pure cold chain. Then, with glass over a warm hole, the things that were never possible here at all — greens and fruiting crops in February, and aquaponics, where the fish and the plants share the same water twice.

And a pond under glass barely evaporates. Enclosed water, recirculated, is the cheapest possible position under Dust — pay for what leaves as vapour, which is nearly nothing, and keep the rest. The two instruments agree again without referring to each other.

Farm first, lake second

This is not a save-the-lake bill and it would be dishonest to sell it as one. It is a save-the-farm bill, and it is riding on save-the-lake money. That sentence goes at the top rather than in a footnote, because there is no fine print on this.

The other two instruments only take. A bill that only takes has nobody in the room arguing for it. This is the one with a constituency that gains — and it is the cheapest of the three.

⭐ The people who want the lake saved and the people who farm next to it are already allies in this state, and everyone outside it gets that wrong. The Farm Bureau and the conservation groups have worked the same water bills for years. The coalition doesn't need building. It needs telling there's money in it.

⚠ And the loan pool does not have to be the General Fund. Conservation capital currently buys water rights at $609 to $25,000 an acre-foot and retires them — one purchase, one acre-foot, one dead farm. This offers the same water at $85 to $176, with the farm still standing and the principal coming back at three percent to do it again.

It still never names a crop

Dust doesn't know what alfalfa is. Neither does this one. The three tiers below are defined by acre-feet of verified depletion reduction and by how much capital the conversion needs — not by what gets planted.

Which matters more here than it does over there. A bill that pays for one crop is a bill about that crop, and it dies in committee alongside everybody who doesn't grow it. A bill that pays for an acre-foot is a bill about an acre-foot.

The three tiers, per irrigated acre

The baseline is one acre of Utah alfalfa: 3.5 tons at $256 a ton is $896 of revenue against $802 of cost, on 4.25 acre-feet applied and 3.40 depleted. It nets $94.

Grant is the capital the state buys because the state is the one getting the water. Loan is the part that becomes a business, at 3% over 20 years, because the farmer keeps the upside. Net is after debt service.
tiergrantloannet/yrvs alfalfaAF freed$/AF
X · dryland grass$440$24−$703.40$129
Y · grass-finished beef$2,701$2,150$679+$5850.84$3,215
Z · the year-3000 berry$6,800$13,300see belowsee below1.88$3,617

$129 an acre-foot is the cheapest water in the American West, and tier X is the tier nobody wants: retire the irrigation, seed a perennial dryland stand, keep it mown and alive and earning nothing. Buying the right outright runs $609 to $25,000 an acre-foot in Utah.

Tier X doesn't close, and the number that closes it is small

The capital grant leaves the dryland farmer $70 an acre a year worse off, which means the grant buys nothing that stays bought. He plants grass, watches a neighbour make money, and puts the pivot back on in year four.

So the bill leases the freed water annually instead. The break-even lease is $20.59 an acre-foot. The historic average for environmental water leases in the West is $30above break-even. At $30 the dryland acre pays $32 a year more than alfalfa did, forever, for doing nothing.

All-in, twenty-year NPV: $576 an acre-foot. That is the whole cost of the water — capital, lease, discounting — and it is below the bottom of the range for simply buying the right, without ending the farm to get it.

What is not in tier Z, and it is the most important line here

The original specification for the high-value tier was water-wise, perma-hydro, hugelkultur, vertical-mounded, shaded-by-solar, passively-geo-cooled. Two of those cost more than everything else combined — and the finding underneath is the most useful line in this document.

the exotic lineper acre
agrivoltaic canopy — 250 kW/acre at $1.35/W installed$337,500
ground-to-air heat exchanger, greenhouse rate, per open acre$185,130 – $311,018
tier Z, farmer side, as actually designed$20,100

Neither is bought. The canopy is seventeen times the entire conversion; it never goes on a farmer's balance sheet. It is owned by whoever wanted the interconnect anyway, and the farmer receives shade and a lease cheque.

Which is the ratchet again, one scale down. No developer shows up and the farm is still a farm. A developer shows up and the shade arrives for free.

the passive geothermal line item

$900

A ground-to-air heat exchanger costs $4.25 to $7.14 a square foot under greenhouse glass. Buy one for an open acre and it is $185,000 to $311,000 of buried pipe, fans and electrical.

So don't buy one. Three hundred cubic yards of earth per acre, four feet deep, is the thermal mass a climate battery pays fans to reach. The mound is the climate battery. The line item is corrugated tube and a day with a machine.

A two-hundred-fold cost reduction, achieved by shaping dirt instead of buying a machine to do what dirt already does. It is the same move as rejecting heat to rock instead of evaporating water, and the same move as digging a hole to make head instead of building a dam. The physics is free. The machine is the markup.

What works, and what makes it work

Every one of these fails or clears at the same place, and it is never the field. Tart cherry costs 26.5 cents a pound to grow and the grower is paid 18.8. On the shelf it is a dollar to two dollars. Being second in the country is not a business.

⭐⭐⭐ So the variable was never the crop. It is the buyer. The margin lives three miles down the road in a building somebody else owns. You own the asset that makes the value and none of the assets that keep it — which is why "just farm better" has never once worked, and why §304(2)(b) lends for the freezer, the press, the dryer and the packing shed, with a stated preference and a lower collateral test.

The same acre, at the gate and owning the shelf. Net is after debt service at 3%.
the acreat the gateowning the shelf
tart cherry, revenue$1,278$3,740
tart cherry, net/yr−$856+$303
grass-finished beef, net/yr+$679

Same trees. Same water. The freezer is the whole difference — $6,000 an acre at three percent, which is $403 a year. Owning it is literally what moves a family across.

The crops with no order and no plant

The opening is not the crop somebody already fought for a medallion to grow. It is the ones with no marketing order, no processor, and nobody's allotment to defend:

Onions. Garlic. Potatoes. Cut flowers. Field-grown, storable or cold-chained, and every one of them was ordinary here when these water rights were written. Pasture-raised, grass-finished beef — the only thing on the list a butcher unlocks by itself.

Their enterprise budgets are not on this page yet. Every other number here comes out of a script you can run, against USU and USDA figures, and these will too — but they are not going up until they do. The structure is the claim; the arithmetic follows it, not the other way round.

And the one the machines are about to change

The berry failed on one line and one line only. UC Davis costed organic strawberries at $112,000 an acre gross, netting $8,555 — a 7.6% margin, because harvest alone is $65,727. Not water. Not land. Hands.

The same acre, same everything, as harvest labour falls. Arithmetic on the UC Davis budget.
harvest costper acrenet/yrmargin
as costed$65,727$8,5557.6%
−30%$46,009$28,27325.2%
−50%$32,864$41,41837.0%
−70%$19,718$54,56448.7%

⭐⭐ Put that under glass and the gross moves too. A greenhouse acre at twice the field yield, with harvest down by half, is $224,000 gross and $115,700 net — on an acre that grows in February, in a state whose shelves have nothing local on them that month.

Stated as a sensitivity, not a forecast. The labour number is the input; whether robotic harvest actually delivers 50% on soft fruit is not settled and this page does not pretend it is. What is settled is that the margin is entirely a labour question — so anyone building the cold room should build it where the glass can go up next to it.

Only one tier can close the deficit, and it is the tier nobody wants

USU puts cattle-feed water in the basin at 908,729 acre-feet a year — about 267,273 irrigated acres. That is the whole board. The lake's stated deficit is 800,000.

Tier Y would need 952,381 acres and tier Z would need 425,532. Neither exists. Every acre in the basin converted to grazed pasture does not close the gap. Only dryland does, and it only just does.

And tier Z has a ceiling that has nothing to do with money or water. A fresh perishable is sized by how much of it 3.5 million people eat. One or two thousand acres saturates the entire state's appetite for any single fresh crop, and after that the price falls out from under the acre that grew it. This tier is a garnish, not an industry, and any version of this document that implies otherwise is lying.

So the bill is a blend, and the blend is the bill

tieracresAF/yrgrantsloans
X · dryland grass224,395762,942$98,733,677
Y · grass-finished beef41,87935,178$113,113,871$90,038,809
Z · the year-3000 berry1,0001,880$6,800,000$13,300,000
total267,273800,000$218,647,547$103,338,809

One-time: $218.6 million in grants and $103.3 million into a revolving fund that comes back. Ongoing: $22.9 million a year in instream leases at $30 an acre-foot.

Read it per farm, because that is where the politics live

Sixteen percent of the ground stays irrigated and eighty-four percent goes to dry grass. Written that way it reads as the end of farming in northern Utah, and it should be written the other way, because it is the other way.

⭐⭐ It is a 500-acre alfalfa outfit putting 80 acres into grazed pasture and berries, drying the other 420, and clearing $107,383 a year against the $47,250 it makes now on all five hundred. Two and a quarter times the money on sixteen percent of the water, and the family is still standing on the ground.

Every competing scheme in the West says sell your right and go. That is why every competing scheme loses. Make Farmers Great Again is Sum's slogan for this and it is the correct one, which is an uncomfortable sentence to write and it stays in.

The hard parts, named

The hay price recovered. The Farm Bureau's "Alfalfa in the Red" was −$203 an acre at $171 a ton in 2025. Utah auction hay is $256 now — the national herd is at a 74-year low and hay followed it up. At $256 alfalfa makes money again. The argument can no longer rest on the crop losing money. It rests on the water, which is stable, and on the herd rebuild ending, which it will.

Irrigated pasture uses more water than alfalfa. Four to six acre-feet against 4.25. The saving in tier Y is the grazing, not the seeding — irrigating to four inches of forage rather than cutting two feet of hay. Anyone who claims a water saving from putting cows on green grass is wrong, and tier Y's 0.84 acre-feet is the honest number.

Retired water does not reach the lake by itself. Absent protected instream flow the whole way down, a junior downstream user picks it up and the lake sees nothing. That is why §305 leases the water rather than simply paying for the grass, and routes it to the division that HB 33 authorised in 2022 to hold it.

Seven years of non-use forfeits a water right under 73-1-4. No one converts an acre under a statute that takes the right away for converting it. §7 of this bill is the amendment that fixes that, and it is the section a hostile reader should be sent to first.

The water saving in tier X starts in year three, not year one. A dryland stand needs two seasons of irrigation to take. A bill that promises the acre-feet immediately is lying about the only thing it is selling.

Outside the bill — the farmer's bunker not in the instrument

None of this is in the appropriation and none of it needs to be. It is last on the page on purpose — a farm that does everything above is already finished and already profitable. This is only what the same hole is worth if somebody else pays to fill it.

⭐⭐⭐ And that is the whole trick: by the time you have farmed right for this century, the data centre is nearly free to add. A greenfield hall pays $10–13M a megawatt for land, shell, dig, power, cooling and heat rejection. This farm has already dug the hole, poured the envelope, built the heat sink, run the loop, sunk the pond and put up the generation — for the greenhouse, for the cold room, for the house. What is left to add is racks and a door.

The move: the farmer owns the ground and digs the hole. Big data and its capital bring the racks, the panels and the turbines. The exhaust goes into glass, the roof drains to an at-grade pond, and the surface above stays a garden.

A farm-scale node at 5 MW. Capex per MW from the corridor model; hall floor at 200 W/sq ft of white space plus support. Order-of-magnitude, unsurveyed.
the linethe number
white space25,000 sq ft — 0.6 acres
the hole, gross floor37,500 sq ft — 0.9 acres
capex it holds, traditional$50M – $65M
capex it holds, AI-optimised$75M – $100M
that same acre, as alfalfa$81 a year

⭐⭐ One acre. Eighty-one dollars a year of hay, or a hole holding fifty to a hundred million dollars of equipment that somebody else bought. The farmer is not selling the farm. He is renting the basement.

If you build it, they will come

A county does not have to become a technology company to sell megawatts of compute. It has to own ground with power and water rights and a hole in it. The panels, the turbines and the racks are somebody else's balance sheet — and that somebody is currently standing in an interconnection queue eighteen to twenty-two months long, looking for exactly this.

The scarce thing is not capital and it is not silicon. It is a site that can already deliver power. A farm with generation, a water right and a basement skips the line that money cannot buy its way past. The county leases; it does not build.

The heat is the actual payment

A rack turns essentially all of its power into heat, and a data centre spends real money getting rid of it. Put it under glass instead and the disposal problem becomes the growing season.

5 MW of rejected heat, into greenhouse, at winter heating loads.
glazingW/m²acres kept warm
single, January peak3004.1
typical2006.2
insulated1508.2

Dig one acre, heat six. February greens, February fish, February flowers — grown on the waste product of a business that was going to throw it into the sky anyway. The lease cheque is the smaller half of this deal.

What is not costed here: the ground lease itself. Data-centre ground rents vary enormously by interconnect, and no number goes on this page until one carries a URL. That is the farmer's negotiation, and it is the number to get advice on before signing anything.

And the rest of the surface still farms

The panels go on the south slope and the parking and the road, not the field — agrivoltaic, where the shade is a feature, because a shaded crop transpires less and a panel runs cooler over a plant than over asphalt. The turbines take a fencerow. The roof of the bunker drains to an at-grade pond, which is the fire supply, the aquaponics tank, the irrigation buffer and the thing that makes the whole site read as a farm from the road.

⭐ Every one of those is a revenue line the farm did not have: compute rent · generation · the heat · the pond · and the crop, which is now growing in February. Nothing here asks the state for a dollar. The bill builds the cold chain; this is what a farmer can do with the hole once he owns one.

The instrument

AGRICULTURAL WATER TRANSITION AMENDMENTS

LONG TITLE

General Description:
        This bill creates a program to pay the capital cost of converting irrigated
agricultural land to a use that depletes less water, to lend the balance at a reduced rate, and
to lease the water so freed.

Highlighted Provisions:
        This bill:
        ▸ creates the Agricultural Water Transition Program;
        ▸ provides transition grants by tier, determined by verified reduction in depletion
and by the capital required, and not by the crop or product produced;
        ▸ creates a revolving loan fund at a rate of three percent;
        ▸ provides for the annual lease of water freed by a conversion, and directs that water
instream to the Great Salt Lake;
        ▸ provides that a conversion under this part is not non-use for purposes of
forfeiture; and
        ▸ appropriates money.

Money Appropriated in this Bill:
        This bill appropriates:
        ▸ $218,650,000 as a one-time appropriation from the General Fund for fiscal year
2028, to the Agricultural Water Transition Program;
        ▸ $103,350,000 as a one-time appropriation from the General Fund for fiscal year
2028, to the Agricultural Water Transition Revolving Loan Fund; and
        ▸ $22,900,000 as an ongoing appropriation from the General Fund, beginning in
fiscal year 2029, for leases under Section 73-10g-305.

Other Special Clauses:
        None

Utah Code Sections Affected:
AMENDS:
        73-1-4, as last amended by Laws of Utah 2024
        65A-16-201, as last amended by Laws of Utah 2023
ENACTS:
        73-10g-301, 73-10g-302, 73-10g-303, 73-10g-304, 73-10g-305, 73-10g-306,
                Utah Code Annotated 1953

Be it enacted by the Legislature of the state of Utah:

Section 1. Section 73-10g-301 is enacted to read:

Part 3. Agricultural Water Transition

73-10g-301. Definitions.
        As used in this part:
        (1) "Basin" means the Great Salt Lake watershed as defined in Section 65A-16-101.
        (2) "Conversion" means a change in the use of a converted acre that results in a
verified reduction in depletion, and that does not consist solely of a change in the method of
irrigation.
        (3) "Converted acre" means an acre of land within the basin that:
                (a) was irrigated in at least five of the seven calendar years preceding the
application; and
                (b) is the subject of an agreement under Section 73-10g-302.
        (4) "Depletion" means water consumed and not returned to the basin, determined under
Subsection 73-10g-306(1).
        (5) "Freed water" means the reduction in depletion attributable to a conversion,
expressed in acre-feet per year.
        (6) "Program" means the Agricultural Water Transition Program created in Section
73-10g-302.

Section 2. Section 73-10g-302 is enacted to read:

73-10g-302. Agricultural Water Transition Program.
        (1) There is created the Agricultural Water Transition Program, administered by the
department in consultation with the Division of Water Resources and the state engineer.
        (2) The Legislature finds that:
                (a) the capital cost of changing the use of an irrigated acre, and not the
economics of the use itself, is the principal obstacle to a change in use;
                (b) a program that acquires water by ending an agricultural operation acquires
the water once and forecloses the acre; and
                (c) a program that pays the cost of conversion acquires the same water and
leaves an operating farm on the land.
        (3) The department shall enter into an agreement with an applicant that provides for:
                (a) the grant payable under Section 73-10g-303;
                (b) any loan under Section 73-10g-304;
                (c) the lease of freed water under Section 73-10g-305; and
                (d) the term of the agreement, which may not be less than 10 years.
        (4) An agreement under this section is voluntary, and the department may not condition
any other benefit, permit, approval or program eligibility on entering into one.

Section 3. Section 73-10g-303 is enacted to read:

73-10g-303. Transition grants.
        (1) The department shall pay a transition grant per converted acre, not to exceed:
                (a) $500, where the conversion is to perennial cover that is not irrigated after
the establishment period;
                (b) $2,750, where the acre remains in irrigated production and freed water is at
least 0.5 acre-feet per acre per year; or
                (c) $7,000, where the acre remains in irrigated production, freed water is at
least 1.5 acre-feet per acre per year, and the conversion includes a durable improvement to the
soil profile or a permanent structure.
        (2) A grant under this section is determined by the tier under Subsection (1) and by
documented cost, and is not determined by:
                (a) the crop, animal, product or process produced on the converted acre;
                (b) the identity, priority date or seniority of any water right; or
                (c) whether the converted acre produces any marketable product at all.
        (3) A grant may not exceed the documented cost of the conversion.
        (4) The department may pay up to 40% of a grant on execution of the agreement, and the
balance on verification under Section 73-10g-306.
        (5) An establishment period under Subsection (1)(a) may not exceed three irrigation
seasons, and water applied during that period is not a breach of the agreement.

Section 4. Section 73-10g-304 is enacted to read:

73-10g-304. Agricultural Water Transition Revolving Loan Fund.
        (1) There is created an enterprise fund known as the Agricultural Water Transition
Revolving Loan Fund.
        (2) The department may lend from the fund to a person party to an agreement under
Section 73-10g-302, for the acquisition of:
                (a) livestock, plants, trees, equipment, handling facilities or working capital
placed in service on a converted acre; and
                (b) processing, storage, cold chain, packaging or market access capacity, whether
or not located on a converted acre, and whether held individually or through a cooperative,
association or other entity in which the borrower holds an interest.
        (3) The department shall give preference to a loan under Subsection (2)(b), and may accept
a lower ratio of collateral to principal for such a loan, on a finding that the capacity financed
increases the price received by the borrower for a product of the converted acre.
        (4) A loan under this section shall bear interest at three percent per annum, for a term
not exceeding 20 years.
        (5) Repayments of principal and interest shall be deposited in the fund.
        (6) The department may subordinate a loan under this section to a first lien held by a
commercial lender.
        (7) A loan under this section is not secured by, and default on it may not be satisfied
by, a water right.

Section 5. Section 73-10g-305 is enacted to read:

73-10g-305. Lease of freed water.
        (1) The department shall lease the freed water attributable to a converted acre for the
term of the agreement, and shall pay for it annually at the rate published under Subsection (4).
        (2) Water leased under this section shall be:
                (a) assigned to the Division of Forestry, Fire, and State Lands for the purposes
described in Section 65A-16-201; and
                (b) protected from diversion by an intervening user for the length of the stream
between the converted acre and the Great Salt Lake.
        (3) A lease under this section is a beneficial use of the water leased.
        (4) The Division of Water Resources shall publish, on or before January 31 of each year,
the rate payable under this section, which may not be less than $30 per acre-foot, adjusted
annually for inflation.
        (5) The department shall reduce the payment under this section, pro rata, for any portion
of the freed water that Subsection (2)(b) cannot protect.

Section 6. Section 73-10g-306 is enacted to read:

73-10g-306. Verification and reporting.
        (1) The Division of Water Resources shall determine depletion and freed water by remote
sensing of evapotranspiration, using a published methodology, and not by measurement of
diversion alone.
        (2) The department shall verify each converted acre before paying the balance of a grant,
and at least once every three years thereafter.
        (3) The department shall report annually to the Natural Resources, Agriculture, and
Environment Interim Committee:
                (a) acres converted, by tier;
                (b) freed water, by tier, in acre-feet;
                (c) cost per acre-foot of freed water, by tier, including grants, loans and
leases; and
                (d) the number of agreements terminated, and the reason for each.
        (4) If the cost per acre-foot under Subsection (3)(c) for a tier exceeds the cost of
acquiring an equivalent quantity by purchase of a water right, the department shall state so
plainly in the report.

Section 7. Section 73-1-4 is amended to read:

73-1-4. Reversion to the public by abandonment or forfeiture for nonuse.
        ...
        (2)(e) The period of nonuse described in Subsection (2)(a) does not include a period
during which the water right is subject to an agreement under Section 73-10g-302, or during
which water is leased under Section 73-10g-305.

Section 8. Section 65A-16-201 is amended to read:

65A-16-201. Great Salt Lake Watershed Enhancement Program.
        ...
        ( ) The division may expend money in the program for leases under Section 73-10g-305.

Section 9. Appropriation.

        The following sums of money are appropriated for the fiscal year beginning July 1, 2027
and ending June 30, 2028. These are additions to amounts previously appropriated for fiscal year
2028.

        To the Department of Agriculture and Food — Agricultural Water Transition Program
                From the General Fund, one-time                              $218,650,000

        To the Agricultural Water Transition Revolving Loan Fund
                From the General Fund, one-time                              $103,350,000

        The following sums of money are appropriated for the fiscal year beginning July 1, 2028
and ending June 30, 2029, and annually thereafter.

        To the Department of Agriculture and Food — leases under Section 73-10g-305
                From the General Fund                                         $22,900,000

Section 10. Effective date.

        This bill takes effect on May 4, 2028.

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