AB9 - Revises provisions relating to water. (BDR 48-391)

(Reprinted with amendments adopted on April 14, 2025) FIRST REPRINT A.B. 9 - *AB9_R1* ASSEMBLY BILL NO. 9–COMMITTEE ON NATURAL RESOURCES (ON BEHALF OF THE JOINT INTERIM STANDING COMMITTEE ON NATURAL RESOURCES) PREFILED OCTOBER 29, 2024 ____________ Referred to Committee on Natural Resources SUMMARY—Revises provisions relating to water. (BDR 48-391) FISCAL NOTE: Effect on Local Government: No. Effect on the State: No. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to water; revising the duration of time in which agricultural water rights may be temporarily converted for certain purposes; providing an exception to provisions relating to the forfeiture and abandonment of a water right; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Under existing law, a person or entity may apply to temporarily convert 1 agricultural water rights for wildlife purposes or to improve the quality or flow of 2 water for a duration not to exceed 3 years and a temporary conversion may be 3 extended in increments not to exceed 3 years in duration each. (NRS 533.0243) 4 Section 1 of this bill instead provides that a temporary conversion of agricultural 5 water rights may not exceed 5 years in duration and may be extended in increments 6 that may not exceed 5 years in duration each. Section 1: (1) authorizes the State 7 Engineer to deny an application to temporarily convert an agricultural water right 8 or limit the duration of a temporary conversion or an extension of a temporary 9 conversion; and (2) prohibits the State Engineer from approving an application for 10 a temporary conversion under certain circumstances. Section 1 further provides that 11 upon the expiration of a temporary conversion, the agricultural water right must 12 revert to the previous beneficial use. 13 Existing law requires, under certain circumstances, the State Engineer to notify 14 the owner of a water right that the owner has 1 year after the date of the notice to: 15 (1) use the water right beneficially and provide proof of such use to the State 16 Engineer; or (2) apply to the State Engineer for an extension of time to work a 17 forfeiture of the water right. If, after 1 year of the date of the notice, the owner fails 18 to act, the State Engineer is required to declare the right forfeited. Existing law also 19 provides that a right to use underground water may be lost by abandonment under 20 – 2 – - *AB9_R1* certain circumstances. (NRS 534.090) Section 2 of this bill provides that these 21 provisions relating to forfeiture and abandonment do not apply to water rights 22 which are subject to certain federal or state programs. 23 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 533.0243 is hereby amended to read as 1 follows: 2 533.0243 1. [The Legislature hereby finds and declares that it 3 is the policy of this State to allow] Except as otherwise provided in 4 subsection 3, the State Engineer may authorize the temporary 5 conversion of agricultural water rights for wildlife purposes or to 6 improve the quality , quantity or flow of water [.] in accordance 7 with the provisions of this section. 8 2. If a person or entity proposes to temporarily convert 9 agricultural water rights [for wildlife purposes or to improve the 10 quality or flow of water,] pursuant to this section, such temporary 11 conversion: 12 (a) Must not be carried out unless the person or entity first 13 applies for and receives from the State Engineer any necessary 14 permits or approvals required pursuant to: 15 (1) The provisions of this chapter; and 16 (2) Any applicable decisions, orders, procedures and 17 regulations of the State Engineer. 18 (b) [Except as otherwise provided in this paragraph, must] Must 19 not exceed [3] 5 years in duration [. A temporary conversion of 20 agricultural water rights for wildlife purposes or to improve the 21 quality or flow of water] and may be extended in increments not to 22 exceed [3] 5 years in duration each, provided that the person or 23 entity seeking the extension first applies for and receives from the 24 State Engineer any necessary permits or approvals, as described in 25 paragraph (a). 26 3. The State Engineer: 27 (a) May deny an application to temporarily convert an 28 agricultural water right received pursuant to subsection 2 or limit 29 the temporary conversion or extension of the temporary 30 conversion to any duration of less than 5 years if the State 31 Engineer determines that the temporary conversion or duration of 32 the temporary conversion would not meet the purposes set forth in 33 subsection 1 or would not otherwise be in the public interest; and 34 (b) Shall not approve an application to temporarily convert an 35 agricultural water right if the water right is a groundwater right 36 and the owner has received notice from the State Engineer 37 – 3 – - *AB9_R1* pursuant to subsection 2 of NRS 534.090 indicating 4 or more 1 consecutive years of nonuse. 2 4. If the State Engineer authorizes the temporary conversion 3 of an agricultural water right pursuant to this section, the 4 temporarily converted water right: 5 (a) Must not be considered a beneficial use for the purpose of 6 perfecting the water right or proving that beneficial use of the 7 water right has resumed; 8 (b) Must not be claimed or considered a consumptive use for 9 the purposes of NRS 533.3703; 10 (c) Remains subject to the provisions of NRS 534.037 and any 11 groundwater management plan or modification thereto; and 12 (d) Remains subject to any order of the State Engineer 13 requiring that withdrawals be restricted to conform to priority 14 rights. 15 5. Upon the expiration of the temporary conversion and any 16 extension granted pursuant to subsection 2, an agricultural water 17 right that is temporarily converted must revert to the existing 18 beneficial use of the agricultural water right before the water right 19 was temporarily converted. 20 Sec. 2. NRS 534.090 is hereby amended to read as follows: 21 534.090 1. Except as otherwise provided in this section, 22 failure for 5 successive years after April 15, 1967, on the part of the 23 holder of any right, whether it is an adjudicated right, an 24 unadjudicated right or a right for which a certificate has been issued 25 pursuant to NRS 533.425, and further whether the right is initiated 26 after or before March 25, 1939, to use beneficially all or any part of 27 the underground water for the purpose for which the right is 28 acquired or claimed, works a forfeiture of both undetermined rights 29 and determined rights to the use of that water to the extent of the 30 nonuse. 31 2. If the records of the State Engineer or any other documents 32 obtained by or provided to the State Engineer indicate 4 or more 33 consecutive years of nonuse of all or any part of a water right which 34 is governed by this chapter: 35 (a) The State Engineer shall notify the owner of the water right, 36 as determined in the records of the Office of the State Engineer, by 37 registered or certified mail of the nonuse and that the owner has 1 38 year after the date of the notice of nonuse in which to use the water 39 right beneficially and to provide proof of such use to the State 40 Engineer or apply for relief pursuant to subsection 3 to avoid 41 forfeiting the water right. 42 (b) If, after 1 year after the date of the notice of nonuse pursuant 43 to paragraph (a), proof of resumption of beneficial use is not filed in 44 the Office of the State Engineer, the State Engineer shall, unless the 45 – 4 – - *AB9_R1* State Engineer has granted a request to extend the time necessary to 1 work a forfeiture of the water right, send a final notice to the owner 2 of the water right, as determined in the records of the Office of the 3 State Engineer, by registered or certified mail, that the water right is 4 held for forfeiture. If the owner of the water right, within 30 days 5 after the date of such final notice, fails to file the required proof of 6 resumption of beneficial use or an application for an extension of 7 time to prevent forfeiture, the State Engineer shall declare the right, 8 or the portion of the right not returned to beneficial use, forfeited. 9 The State Engineer shall send notice of the declaration of forfeiture, 10 by registered or certified mail, to the owner of record, as determined 11 in the records of the Office of the State Engineer, of the water right 12 that has been declared forfeited. 13 (c) If, after receipt of a notice of the declaration of forfeiture 14 pursuant to paragraph (b), the owner of record of the water right 15 fails to appeal the ruling in the manner provided for in NRS 16 533.450, and within the time provided for therein, the forfeiture 17 becomes final. Upon the forfeiture of the water right, the water 18 reverts to the public and is available for further appropriation, 19 subject to existing rights. 20 3. The State Engineer may, upon the request of the holder of 21 any right described in subsection 1, extend the time necessary to 22 work a forfeiture under subsection 2 if the request is made before 23 the expiration of the time necessary to work a forfeiture. Except as 24 otherwise provided in subsection 4, the State Engineer may grant, 25 upon request and for good cause shown, any number of extensions, 26 but a single extension must not exceed 1 year. In determining 27 whether to grant or deny a request, the State Engineer shall, among 28 other reasons, consider: 29 (a) Whether the holder has submitted proof and evidence that 30 the holder is proceeding in good faith and with reasonable diligence 31 to resume use of the water beneficially for the purpose for which the 32 holder’s right is acquired or claimed; 33 (b) The number of years during which the water has not been 34 put to the beneficial use for which the right is acquired or claimed; 35 (c) Any economic conditions or natural disasters which made 36 the holder unable to put the water to that use; 37 (d) Whether the water right is located in a basin within a county 38 under a declaration of drought by the Governor, United States 39 Secretary of Agriculture or the President of the United States; 40 (e) Whether the holder has demonstrated efforts to conserve 41 water which have resulted in a reduction in water consumption; 42 (f) Whether the water right is located in a basin that has been 43 designated as a critical management area by the State Engineer 44 pursuant to subsection 7 of NRS 534.110; 45 – 5 – - *AB9_R1* (g) The date of priority of the water right as it relates to the 1 potential curtailment of water use in the basin; 2 (h) The availability of water in the basin, including, without 3 limitation, whether withdrawals of water consistently exceed the 4 perennial yield of the basin; and 5 (i) Any orders restricting use or appropriation of water in the 6 basin. 7  The State Engineer shall notify, by registered or certified mail, 8 the owner of the water right, as determined in the records of the 9 Office of the State Engineer, of whether the State Engineer has 10 granted or denied the holder’s request for an extension pursuant to 11 this subsection. If the State Engineer grants an extension pursuant to 12 this subsection and, before the expiration of that extension, proof of 13 resumption of beneficial use or another request for an extension is 14 not filed in the Office of the State Engineer, the State Engineer shall 15 send a final notice to the owner of the water right, by registered or 16 certified mail, that the water right will be declared forfeited if the 17 owner of the water right fails to file the required proof of 18 resumption of beneficial use or an application for an extension of 19 time to prevent forfeiture within 30 days after the date of the final 20 notice. If the owner of the water right fails to file the required proof 21 of resumption of beneficial use or an application for an extension of 22 time to prevent forfeiture within 30 days after the date of such final 23 notice, the State Engineer shall declare the water right, or the 24 portion of the right not returned to beneficial use, forfeited. 25 4. If the State Engineer grants an extension pursuant to 26 subsection 1 in a basin: 27 (a) Where withdrawals of groundwater consistently exceed the 28 perennial yield of the basin; or 29 (b) That has been designated as a critical management area by 30 the State Engineer pursuant to subsection 7 of NRS 534.110, 31  a single extension must not exceed 3 years, but any number of 32 extensions may be granted to the holder of such a right. 33 5. The failure to receive a notice pursuant to subsection 2 or 3 34 does not nullify the forfeiture or extend the time necessary to work 35 the forfeiture of a water right. 36 6. A right to use underground water whether it is vested or 37 otherwise may be lost by abandonment. If the State Engineer, in 38 investigating a groundwater source, upon which there has been a 39 prior right, for the purpose of acting upon an application to 40 appropriate water from the same source, is of the belief from his or 41 her examination that an abandonment has taken place, the State 42 Engineer shall so state in the ruling approving the application. If, 43 upon notice by registered or certified mail to the owner of record 44 who had the prior right, the owner of record of the prior right fails to 45 – 6 – - *AB9_R1* appeal the ruling in the manner provided for in NRS 533.450, and 1 within the time provided for therein, the alleged abandonment 2 declaration as set forth by the State Engineer becomes final. 3 7. The provisions of this section do not apply to a water right 4 which is subject to: 5 (a) A contract or agreement entered into in accordance with 6 an official federal program for the conservation of land or water; 7 or 8 (b) An official program for the conservation of water that is 9 administered by an agency of this State. 10 H