AB109 - Revises provisions relating to water. (BDR 48-212)

REQUIRES TWO-THIRDS MAJORITY VOTE (§§ 1, 3, 6, 8 & NRS 533.435) A.B. 109 - *AB109* ASSEMBLY BILL NO. 109–ASSEMBLYMEMBER LA RUE HATCH PREFILED JANUARY 22, 2025 ____________ Referred to Committee on Natural Resources SUMMARY—Revises provisions relating to water. (BDR 48-212) FISCAL NOTE: Effect on Local Government: No. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to water; revising provisions governing the appropriation of water for geothermal wells or dissolved mineral resources; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law provides that, with certain exceptions, the consumptive use of 1 water brought to the surface outside of a geothermal well is subject to the 2 procedures governing the appropriation of water, except for: (1) water removed 3 from an aquifer or geothermal reservoir to develop and obtain geothermal resources 4 if the water is returned to or reinjected into the same aquifer or reservoir; and (2) 5 the reasonable loss of water under certain circumstances. (NRS 534A.040) Section 6 1 of this bill instead provides that any consumptive or nonconsumptive use of water 7 brought to the surface to develop and obtain geothermal resources is subject to 8 these procedures. Section 1 also removes the exception for water removed from an 9 aquifer or geothermal reservoir and instead creates an exception for water used for 10 an exploratory well. 11 Existing law provides that, with certain exceptions, the owner of real property 12 owns the rights to the underlying geothermal resources. (NRS 534A.050) Section 2 13 of this bill clarifies that underground waters belong to the public and the use of 14 such waters for the development of geothermal resources is subject to existing state 15 laws governing the appropriation of water. 16 Existing law requires a person to obtain a permit from the Administrator of the 17 Division of Minerals of the Commission on Mineral Resources and comply with 18 the conditions of the permit before he or she may drill or operate a geothermal well 19 or drill an exploratory well. (NRS 534A.060) Sections 3 and 4 of this bill require a 20 person to obtain a permit to appropriate water from the State Engineer before he or 21 she may drill or operate such a well, if the well uses water that is subject to the 22 procedures governing the appropriation of water. 23 Existing law provides that ownership of dissolved mineral resources is 24 determined by the applicable federal and state laws and regulations. (NRS 25 534B.010) Section 5 of this bill clarifies that underground waters containing 26 – 2 – - *AB109* dissolved mineral resources belong to the public and are subject to state laws 27 governing the appropriation of water. 28 Existing law exempts from the procedures governing the appropriation of water 29 the reasonable loss of water of not more than 5 acre-feet during the testing and 30 sampling of water pumped within a dissolved mineral resource exploration project. 31 (NRS 534B.110) Existing law also requires a person seeking to drill a dissolved 32 mineral resource exploration well to obtain a permit from the Administrator. (NRS 33 534B.080) Section 6 of this bill requires that, upon receipt of an application for 34 such a permit, the Administrator must transmit the application to the State Engineer 35 for review. If the State Engineer determines that the application may interfere with 36 existing rights or protectable interests in existing domestic wells or threaten the 37 public interest, section 6 requires the applicant to obtain a permit to appropriate 38 water before he or she may proceed with the application. Section 8 of this bill 39 provides that this requirement is an exception to the exemption for the reasonable 40 loss of water of not more than 5 acre-feet. 41 Existing law requires, with certain exceptions, the Administrator to approve or 42 reject an application to drill a dissolved mineral resource exploration well within 30 43 days after receiving the application. (NRS 534B.090) Section 7 of this bill provides 44 an exception from this requirement if the State Engineer requires the applicant to 45 obtain a permit to appropriate water. 46 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 534A.040 is hereby amended to read as 1 follows: 2 534A.040 A consumptive or nonconsumptive use of water 3 brought to the surface [outside of a] to develop and obtain 4 geothermal [well] resources is subject to the appropriation 5 procedures of chapters 533 and 534 of NRS, except for: 6 1. Water [that is removed from an aquifer or geothermal 7 reservoir to develop and obtain geothermal resources if the water is 8 returned to or reinjected into the same aquifer or reservoir;] used in 9 an exploratory well; or 10 2. The reasonable loss of water: 11 (a) During a test of a geothermal well; or 12 (b) From the temporary failure of all or part of a system that 13 removes water from an aquifer or geothermal reservoir, transfers the 14 heat from that water and reinjects that water into the same aquifer or 15 reservoir. 16 Sec. 2. NRS 534A.050 is hereby amended to read as follows: 17 534A.050 1. The owner of real property owns the rights to 18 the underlying geothermal resources unless they have been reserved 19 by or conveyed to another person. 20 2. In accordance with NRS 533.025 and 534.020, 21 underground waters belong to the public and the use of such 22 underground waters for the development of geothermal resources 23 – 3 – - *AB109* is subject to appropriation for beneficial use only under the laws 1 of this State. 2 Sec. 3. NRS 534A.060 is hereby amended to read as follows: 3 534A.060 1. A person may not drill or operate a geothermal 4 well or drill an exploratory well without obtaining [a] : 5 (a) A permit from the Administrator of the Division of Minerals 6 of the Commission on Mineral Resources ; and 7 (b) Except as otherwise provided in NRS 534A.040, a permit to 8 appropriate water from the State Engineer in accordance with the 9 requirements of chapters 533 and 534 of NRS, 10  and complying with the conditions of [the] each permit. 11 2. An application for a permit from the Administrator of the 12 Division of Minerals required pursuant to paragraph (a) of 13 subsection 1 must set forth such information as the Administrator 14 requires by regulation. 15 Sec. 4. NRS 534A.070 is hereby amended to read as follows: 16 534A.070 1. The Administrator of the Division of Minerals 17 of the Commission on Mineral Resources shall approve or reject an 18 application for a permit to drill an exploratory well within 10 days 19 after the Administrator receives the application in proper form. The 20 permit must not be effective for more than 2 years, but may be 21 extended by the Administrator. 22 2. Upon receipt of an application for a permit to drill or operate 23 a geothermal well, the Administrator of the Division of Minerals 24 shall transmit copies of the application to the State Engineer, the 25 Administrator of the Division of Environmental Protection of the 26 State Department of Conservation and Natural Resources, and 27 the Director of the Department of Wildlife. After consultation with 28 the State Engineer, the Administrator of the Division of 29 Environmental Protection, and the Director of the Department of 30 Wildlife, the Administrator of the Division of Minerals may issue a 31 permit to drill or operate a geothermal well if [it] : 32 (a) It is determined that issuance of a permit is consistent with: 33 [(a)] (1) The policies specified in NRS 445A.305 and 34 445B.100; 35 [(b)] (2) The [purposes] requirements of chapters 533 and 534 36 of NRS; and 37 [(c)] (3) The purposes specified in chapter 501 of NRS [.] ; and 38 (b) Except as otherwise provided in NRS 534A.040, the State 39 Engineer has issued a permit to appropriate water. 40 3. The Administrator of the Division of Minerals shall approve 41 or reject the application to drill or operate a geothermal well within 42 90 days after the Administrator receives it in proper form, unless it 43 is determined that a conflict exists pursuant to subsection 2 or a 44 public hearing is necessary pursuant to subsection 4. Notice of the 45 – 4 – - *AB109* conflict or need for a public hearing must be provided to the 1 applicant within the 90-day period. 2 4. The State Engineer and the Administrator of the Division of 3 Minerals may hold public hearings jointly or separately to gather 4 such evidence or information as they deem necessary for a full 5 understanding of all the rights involved and to guard properly the 6 public interest. 7 5. A permit issued pursuant to this section must include any 8 conditions: 9 (a) Deemed necessary by the Administrator of the Division of 10 Minerals to carry out the purposes of this section; and 11 (b) Imposed by the State Engineer consistent with the provisions 12 of chapters 533 and 534 of NRS. 13 Sec. 5. NRS 534B.010 is hereby amended to read as follows: 14 534B.010 1. The provisions of this chapter govern 15 exploration for dissolved mineral resources. 16 2. Ownership of dissolved mineral resources is determined by 17 the applicable federal and state laws or regulations. In accordance 18 with NRS 533.025 and 534.020, underground waters containing 19 dissolved mineral resources belong to the public and are subject to 20 appropriation for beneficial use only under the laws of this State. 21 3. Except as expressly provided, nothing in this chapter shall 22 be construed to abrogate the provisions of chapter 445A, 519A, 533, 23 534 or 534A of NRS. 24 Sec. 6. NRS 534B.080 is hereby amended to read as follows: 25 534B.080 1. A person may not drill a dissolved mineral 26 resource exploration well without first obtaining a permit from the 27 Administrator and complying with the conditions of the permit. 28 2. To obtain a permit to drill a dissolved mineral resource 29 exploration well, a person must submit an application for a permit to 30 the Administrator in the form and containing such information as 31 prescribed by the Administrator in accordance with regulations 32 adopted pursuant to this chapter. 33 3. An application submitted pursuant to subsection 2 must 34 include: 35 (a) The location, design and expected depth of the well; 36 (b) The materials of construction for the well; 37 (c) The status of the land on which the well will be constructed; 38 (d) A plan for monitoring the well and a plan for plugging and 39 abandoning the well in accordance with any regulations adopted 40 pursuant to this chapter; 41 (e) A plan for managing any fluids generated as part of testing 42 or sampling, which must include, without limitation, a description of 43 how the fluids will be managed in accordance with the requirements 44 of chapter 445A of NRS and as required by the Division of 45 – 5 – - *AB109* Environmental Protection of the State Department of Conservation 1 and Natural Resources; and 2 (f) Any other reporting, information or analysis necessary to 3 prevent the migration of fluids between aquifers and the degradation 4 of the water quality in accordance with any regulations adopted 5 pursuant to this chapter. 6 4. Upon receipt of an application submitted pursuant to 7 subsection 2, the Administrator shall transmit a copy of the 8 application to the State Engineer for review. If the State Engineer 9 determines that a dissolved mineral resource exploration well or a 10 dissolved mineral resource exploration borehole may impact 11 existing rights or protectable interests in existing domestic wells or 12 prove detrimental to the public interest, the State Engineer shall 13 require that the applicant obtain a permit to appropriate water in 14 accordance with the requirements of chapters 533 and 534 of 15 NRS. 16 5. In addition to any other requirement of this section, a 17 dissolved mineral resource exploration well or a dissolved mineral 18 resource exploration borehole must be drilled by a person who is 19 licensed to drill wells pursuant to NRS 534.140. 20 [5.] 6. The issuance of a permit pursuant to NRS 534B.090 21 does not authorize a person to produce dissolved mineral resources 22 without a water right. 23 Sec. 7. NRS 534B.090 is hereby amended to read as follows: 24 534B.090 1. The Administrator shall approve or reject an 25 application for a permit to drill a dissolved mineral resource 26 exploration well within 30 days after the Administrator receives an 27 application in proper form, unless [the] : 28 (a) The Administrator determines that the application conflicts 29 with the requirements of NRS 445A.300 to 445A.730, inclusive, 30 and any regulations adopted pursuant thereto, or any other laws and 31 regulations administered by the Division of Environmental 32 Protection of the State Department of Conservation and Natural 33 Resources [.] ; or 34 (b) The State Engineer requires the applicant to obtain a 35 permit to appropriate water pursuant to NRS 534B.080. 36 2. A permit issued pursuant to this section must not be 37 effective for more than 2 years, but may be extended one time by 38 the Administrator for an additional 2 years if he or she determines 39 that the permit complies with the requirements of this chapter and 40 any regulations adopted pursuant thereto. 41 3. The Administrator and the State Engineer may hold public 42 hearings jointly or separately to gather such evidence or information 43 as they deem necessary for a full understanding of all the rights 44 involved and to properly guard the public interest. The 45 – 6 – - *AB109* Administrator and the State Engineer, as applicable, must notify 1 the applicant [, the State Engineer] and the Administrator of the 2 Division of Environmental Protection of the State Department of 3 Conservation and Natural Resources in advance of any hearing held 4 pursuant to this section. 5 4. A permit issued pursuant to this section must include any 6 conditions and reporting requirements deemed necessary by the 7 Administrator. 8 5. The holder of any permit issued pursuant to this section must 9 comply with the requirements of NRS 4 [Text truncated for display. Full text available on LegiScan.]