SB36 - Revises provisions relating to water. (BDR 48-384)

- 83rd Session (2025) Senate Bill No. 36–Committee on Natural Resources CHAPTER.......... AN ACT relating to water; requiring the State Engineer to retire certain groundwater rights; creating the Nevada Conservation and Recreation Program; creating the Account for Retiring Water Rights; establishing the Nevada Voluntary Water Rights Retirement Program; requiring the Director of the State Department of Conservation and Natural Resources to purchase certain water rights for the purpose of retiring the water rights; revising provisions governing a program to provide grants of money for certain purposes relating to improvements to water systems and to conserve 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 change the place of diversion, manner of use or place of use of water already appropriated, must apply to the State Engineer for a permit to do so. (NRS 533.325) Existing law further provides that all underground waters within the boundaries of the State are subject to appropriation for beneficial use only under the laws of this State relating to the appropriation and use of water. (NRS 534.020) Section 10.5 of this bill creates the Account for Retiring Water Rights, to be administered by the Director of the State Department of Conservation and Natural Resources, and requires that the money in the Account only be used for the purchase of decreed or certificated groundwater rights for certain purposes. Section 10.7 of this bill establishes the Nevada Voluntary Water Rights Retirement Program in the Nevada Conservation and Recreation Program, to be administered by the Director and establishes requirements for: (1) the purchase and retirement of decreed or certificated groundwater rights; and (2) the acceptance of donations of decreed or certificated groundwater rights. Section 10.7 also prohibits the Director from accepting donations or applications for the purchase and retirement of such groundwater rights after June 30, 2035. Section 16 of this bill makes conforming changes to reflect that the Director may not accept applications or donations after this date. Section 8 of this bill: (1) requires the State Engineer to retire all decreed or certificated groundwater rights purchased by or donated to the Nevada Voluntary Water Rights Retirement Program; and (2) prohibits the State Engineer from retiring any groundwater rights from the Program unless the purchase or donation of the groundwater right was approved by the Director on or before June 30, 2035. Sections 1-3 of this bill prohibit the appropriation of water for which rights have been retired pursuant to the Nevada Voluntary Water Rights Retirement Program. Existing law requires the Department to make grants to state agencies, local governments, water conservancy districts, conservation districts and certain nonprofit organizations to protect, preserve and obtain the benefits of the property and natural and cultural resources of this State and requires the Director to adopt regulations to make such grants. (Section 2 of Assembly Bill No. 84, chapter 480, Statutes of Nevada 2019, at page 2861) Existing regulations establish the Nevada Conservation and Recreation Program to make such grants. (LCB File No. R025- 22) Section 10.3 of this bill creates the Program in statute. Section 10.3 further – 2 – - 83rd Session (2025) provides that the Program consists of a grant program to make such grants and the Nevada Voluntary Water Rights Retirement Program. Section 12 of this bill provides that the Program is within the Department. Section 11 of this bill applies the definitions in existing law relating to the Department to the provisions of sections 10.3-10.7. Existing law establishes a program to provide grants of money to purveyors of water and eligible recipients to pay for certain costs related to capital improvements to water systems and water conservation. Under this program, eligible recipients may receive grants of money to pay the cost of improvements to conserve water. (NRS 349.981) Section 14 of this bill includes the permanent retirement of groundwater rights for certain purposes in the types of improvements for which an eligible recipient could receive a grant. Existing law requires certain recipients of a grant of money from this program to provide an amount of money determined by the Board for Financing Water Projects that will be used for the same purpose as the grant and which must be based upon the average household income of the customers of the recipient. (NRS 349.983) Section 15 of this bill instead requires the amount of money provided by a recipient to be based upon the median household income of the customers of the recipient. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. NRS 533.030 is hereby amended to read as follows: 533.030 1. Subject to existing rights, and except as otherwise provided in this section and NRS 533.0241, 533.027 and 533.028, and section 8 of this act, all water may be appropriated for beneficial use as provided in this chapter and not otherwise. 2. The use of water, from any stream system as provided in this chapter and from underground water as provided in NRS 534.080, for any recreational purpose, or the use of water from the Muddy River or the Virgin River to create any developed shortage supply or intentionally created surplus, is hereby declared to be a beneficial use. As used in this subsection: (a) “Developed shortage supply” has the meaning ascribed to it in Volume 73 of the Federal Register at page 19884, April 11, 2008, and any subsequent amendment thereto. (b) “Intentionally created surplus” has the meaning ascribed to it in Volume 73 of the Federal Register at page 19884, April 11, 2008, and any subsequent amendment thereto. 3. Except as otherwise provided in subsection 4, in any county whose population is 700,000 or more: (a) The board of county commissioners may prohibit or restrict by ordinance the use of water and effluent for recreational purposes – 3 – - 83rd Session (2025) in any artificially created lake or stream located within the unincorporated areas of the county. (b) The governing body of a city may prohibit or restrict by ordinance the use of water and effluent for recreational purposes in any artificially created lake or stream located within the boundaries of the city. 4. In any county whose population is 700,000 or more, the provisions of subsection 1 and of any ordinance adopted pursuant to subsection 3 do not apply to: (a) Water stored in an artificially created reservoir for use in flood control, in meeting peak water demands or for purposes relating to the treatment of sewage; (b) Water used in a mining reclamation project; or (c) A body of water located in a recreational facility that is open to the public and owned or operated by the United States or the State of Nevada. Sec. 2. NRS 533.370 is hereby amended to read as follows: 533.370 1. Except as otherwise provided in this section and NRS 533.0241, 533.345, 533.371, 533.372 and 533.503, and section 8 of this act, the State Engineer shall approve an application submitted in proper form which contemplates the application of water to beneficial use if: (a) The application is accompanied by the prescribed fees; (b) The proposed use or change, if within an irrigation district, does not adversely affect the cost of water for other holders of water rights in the district or lessen the efficiency of the district in its delivery or use of water; and (c) The applicant provides proof satisfactory to the State Engineer of the applicant’s: (1) Intention in good faith to construct any work necessary to apply the water to the intended beneficial use with reasonable diligence; and (2) Financial ability and reasonable expectation actually to construct the work and apply the water to the intended beneficial use with reasonable diligence. 2. Except as otherwise provided in subsection 10, [where there] the State Engineer shall reject an application and refuse to issue the requested permit if: (a) There is no unappropriated water in the proposed source of supply [, where the] ; (b) The groundwater that has not been committed for use has been reserved pursuant to NRS 533.0241 ; – 4 – - 83rd Session (2025) (c) The application requests a change to or reinstatement of groundwater rights that have been retired pursuant to section 8 of this act; or [where its] (d) The proposed use or change conflicts with existing rights or with protectable interests in existing domestic wells as set forth in NRS 533.024, or threatens to prove detrimental to the public interest . [, the State Engineer shall reject the application and refuse to issue the requested permit.]  If a previous application for a similar use of water within the same basin has been rejected on those grounds, the new application may be denied without publication. 3. In addition to the criteria set forth in subsections 1 and 2, in determining whether an application for an interbasin transfer of groundwater must be rejected pursuant to this section, the State Engineer shall consider: (a) Whether the applicant has justified the need to import the water from another basin; (b) If the State Engineer determines that a plan for conservation of water is advisable for the basin into which the water is to be imported, whether the applicant has demonstrated that such a plan has been adopted and is being effectively carried out; (c) Whether the proposed action is environmentally sound as it relates to the basin from which the water is exported; (d) Whether the proposed action is an appropriate long-term use which will not unduly limit the future growth and development in the basin from which the water is exported; and (e) Any other factor the State Engineer determines to be relevant. 4. Except as otherwise provided in this subsection and subsections 6 and 10 and NRS 533.365, the State Engineer shall approve or reject each application within 2 years after the final date for filing a protest. The State Engineer may postpone action: (a) Upon written authorization to do so by the applicant. (b) If an application is protested. (c) If the purpose for which the application was made is municipal use. (d) In areas where studies of water supplies have been determined to be necessary by the State Engineer pursuant to NRS 533.368. (e) Where court actions or adjudications are pending, which may affect the outcome of the application. (f) In areas in which adjudication of vested water rights is deemed necessary by the State Engineer. – 5 – - 83rd Session (2025) (g) On an application for a permit to change a vested water right in a basin where vested water rights have not been adjudicated. (h) Where authorized entry to any land needed to use the water for which the application is submitted is required from a governmental agency. (i) On an application for which the State Engineer has required additional information pursuant to NRS 533.375. 5. If the State Engineer does not act upon an application in accordance with subsections 4 and 6, the application remains active until approved or rejected by the State Engineer. 6. Except as otherwise provided in this subsection and subsection 10, the State Engineer shall approve or reject, within 6 months after the final date for filing a protest, an application filed to change the point of diversion of water already appropriated when the existing and proposed points of diversion are on the same property for which the water has already been appropriated under the existing water right or the proposed point of diversion is on real property that is proven to be owned by the applicant and is contiguous to the place of use of the existing water right. The State Engineer may postpone action on the application pursuant to subsection 4. 7. If the State Engineer has not approved, rejected or held a hearing on an application within 7 years after the final date for filing a protest, the State Engineer shall cause notice of the application to be republished and reposted pursuant to NRS 533.360 immediately preceding the time at which the State Engineer is ready to approve or reject the application. The cost of the republication must be paid by the applicant. After such republication and reposting, a protest may be filed in accordance with NRS 533.365. 8. If a hearing is held regarding an application, the decision of the State Engineer must be in writing and include findings of fact, conclusions of law and a statement of the underlying facts supporting the findings of fact. The written decision may take the form of a transcription of an oral ruling. The rejection or approval of an application must be endorsed on a copy of the original application, and a record must be made of the endorsement in the records of the State Engineer. The copy of the application so endorsed must be returned to the applicant. Except as otherwise provided in subsection 11, if the application is approved, the applicant may, on receipt thereof, proceed with the construction of the necessary works and take all steps required to apply the water to beneficial use and to perfect the proposed appropriation. If the application is rejected, the applicant may take no steps toward the – 6 – - 83rd Session (2025) prosecution of the proposed work or the diversion and use of the public water while the rejection continues in force. 9. If a person is the successor in interest of an owner of a water right or an owner of real property upon which a domestic well is located and if the former owner of the water right or real property on which a domestic well is located had previously filed a written protest against the granting of an application, the successor in interest must be allowed to pursue that protest in the same manner as if the successor in interest were the former owner whose interest he or she succeeded. If the successor in interest wishes to pursue the protest, the successor in interest must notify the State Engineer in a timely manner on a form provided by the State Engineer. 10. The provisions of subsections 1 to 9, inclusive, do not apply to an application for an environmental permit or a temporary permit issued pursuant to NRS 533.436 or 533.504. 11. The provisions of subsection 8 do not authorize the recipien [Text truncated for display. Full text available on LegiScan.]