SB11 - Revises provisions relating to permits to appropriate water. (BDR 48-182)

S.B. 11 - *SB11* SENATE BILL NO. 11–COMMITTEE ON NATURAL RESOURCES (ON BEHALF OF THE DIVISION OF WATER RESOURCES OF THE STATE DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES) PREFILED OCTOBER 28, 2026 ____________ Referred to Committee on Natural Resources SUMMARY—Revises provisions relating to permits to appropriate water. (BDR 48-182) FISCAL NOTE: Effect on Local Government: No. Effect on the State: No. Effect on the State Highway Fund: No. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to water; revising provisions relating to the cancellation of a permit to appropriate water; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Under existing law, any person who wishes to appropriate public waters, or to 1 change the place of diversion, manner of use or place of use of water already 2 appropriated, must apply to the State Engineer for a permit to do so. (NRS 533.325) 3 If the State Engineer judges that the holder of any permit to appropriate public 4 water is not proceeding in good faith and with reasonable diligence to perfect the 5 appropriation, existing law requires the State Engineer to cancel the permit and 6 authorizes the holder of a cancelled permit to file a written petition with the 7 State Engineer to review the permit cancellation by way of a public hearing. 8 (NRS 533.395) 9 Section 1 of this bill provides that the State Engineer may rescind the 10 cancellation of a permit without holding a public hearing and, in such a case, the 11 effective date of the permit is not vacated. 12 Existing law: (1) authorizes, after receiving and considering evidence, the State 13 Engineer to affirm, modify or rescind the cancellation; and (2) provides that if the 14 State Engineer modifies or rescinds the cancellation of the permit, the effective date 15 of the appropriation under the permit is vacated and replaced by the date of the 16 filing of the written petition with the State Engineer. (NRS 533.395) Section 1 17 instead requires the State Engineer, when determining whether to vacate and 18 replace the effective date of the appropriation under the permit, to consider: (1) the 19 procedural history of the permit; (2) whether construction of the works of diversion 20 commenced before cancellation or rescission of the permit; and (3) whether any or 21 – 2 – - *SB11* all of the appropriation under the permit was placed to beneficial use before the 22 notice of cancellation. 23 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 533.395 is hereby amended to read as follows: 1 533.395 1. If, at any time in the judgment of the State 2 Engineer, the holder of any permit to appropriate the public water is 3 not proceeding in good faith and with reasonable diligence to 4 perfect the appropriation, the State Engineer shall require the 5 submission of such proof and evidence as may be necessary to show 6 a compliance with the law. If, in the judgment of the State Engineer, 7 the holder of a permit is not proceeding in good faith and with 8 reasonable diligence to perfect the appropriation, the State Engineer 9 shall cancel the permit, and advise the holder of its cancellation. The 10 failure to provide the proof and evidence required pursuant to this 11 subsection is prima facie evidence that the holder is not proceeding 12 in good faith and with reasonable diligence to perfect the 13 appropriation. 14 2. If any permit is cancelled under the provisions of this section 15 or NRS 533.390 or 533.410, the holder of the permit may [within] , 16 not later than 60 days [of] after the date of the notice of 17 cancellation of the permit , file a written petition with the State 18 Engineer requesting a review of the cancellation by the State 19 Engineer at a public hearing. [The] Except as otherwise provided in 20 subsection 3, the State Engineer shall hold a public hearing and 21 may, after receiving and considering evidence, affirm, modify or 22 rescind the cancellation. 23 3. [If] The State Engineer may, without holding a public 24 hearing, rescind the cancellation of a permit. If the State Engineer 25 rescinds the cancellation pursuant to this subsection, the effective 26 date of the appropriation under the permit is not vacated. 27 4. Except as otherwise provided in subsection 3, if the 28 decision of the State Engineer modifies or rescinds the cancellation 29 of a permit, the effective date of the appropriation under the permit 30 [is] may be vacated and replaced by the date of the filing of the 31 written petition with the State Engineer. In determining whether to 32 vacate and replace the effective date of the appropriation under 33 the permit, the State Engineer shall consider, without limitation: 34 (a) The procedural history of the permit, including, without 35 limitation, previous cancellations, rescissions of cancellations and 36 extensions; 37 (b) Whether construction of the works of diversion commenced 38 before the cancellation or rescission of the permit; and 39 – 3 – - *SB11* (c) Whether any or all of the appropriation under the permit 1 was placed to beneficial use before the notice of cancellation. 2 [4.] 5. The cancellation of a permit may not be reviewed or be 3 the subject of any judicial proceedings unless a written petition for 4 review has been filed and the cancellation has been affirmed, 5 modified or rescinded pursuant to [subsection 2.] this section. 6 [5.] 6. For the purposes of this section, the measure of 7 reasonable diligence is the steady application of effort to perfect the 8 appropriation in a reasonably expedient and efficient manner under 9 all the facts and circumstances. When a project or integrated system 10 is comprised of several features, work on one feature of the project 11 or system may be considered in finding that reasonable diligence 12 has been shown in the development of water rights for all features of 13 the entire project or system. 14 [6.] 7. The appropriation of water or the acquisition or lease of 15 appropriated water from any: 16 (a) Stream system as provided for in this chapter; or 17 (b) Underground water as provided for in NRS 534.080, 18  by a political subdivision of this State or a public utility, as 19 defined in NRS 704.020, to serve the present or the reasonably 20 anticipated future municipal, industrial or domestic needs of its 21 customers for water, as determined in accordance with a master plan 22 adopted pursuant to chapter 278 of NRS or a plan approved by the 23 State Engineer, must be considered when reviewing an extension of 24 time. 25 H