EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. Chapter 533 of NRS is hereby amended by adding thereto a

1-3 1. The priority of a water right acquired by a person for use in a

1-4 federal reclamation project is determined according to the date on which

1-5 the United States appropriated water for initiation of the project.

1-6 Notwithstanding the fact that the water right so appropriated and

1-7 acquired may ultimately vest in the name of the person at a later date, all

1-8 such water rights so acquired are governed by the applicable law of this

1-9 state in effect on the date on which the United States appropriated water

2-1 for initiation of the project, unless the water rights vested under the law

2-2 in this state before the time the United States first appropriated or

2-3 otherwise acquired the water for initiation of the project. If the water

2-4 right vested under the law in this state before appropriation or

2-5 acquisition by the United States, the date of initiation of the water right is

2-6 determined according to the date on which the water was first diverted

2-7 under that appropriation or acquisition by the United States.

2-8 2. No water rights, in addition to those allocated under applicable

2-9 court decrees, are granted, stated or implied by the determination of the

2-10 date of priority pursuant to subsection 1.

2-11 Sec. 2. NRS 533.040 is hereby amended to read as follows:

2-12 533.040 [All]

2-28 4. For the purposes of this section, a surface water right acquired by

2-29 a water user in a federal reclamation project may be considered

2-30 appurtenant to an entire farm, instead of specifically identifiable land

2-31 within that farm, upon the granting of a permit for the change of place

2-32 of use by the state engineer which designates the place of use as the

2-33 entire farm. The quantity of water available for use on that farm must

2-34 not exceed the total amount determined by applicable decrees as

2-35 designated in the permit granted by the state engineer.

2-36 5. As used in this section, "farm" means a tract of land under the

2-37 same ownership that is primarily used for agricultural purposes.

2-38 Sec. 3. NRS 533.060 is hereby amended to read as follows:

2-39 533.060 1. Rights to the use of water [shall] must be limited and

2-43 balance of the water not so appropriated [shall] must be allowed to flow in

3-1 the natural stream from which [such] the ditch draws its supply of water,

3-2 and [shall] must not be considered as having been appropriated thereby.

3-3 2. [Except as otherwise provided in subsection 4, if the owner or

3-4 owners of any such ditch, canal, reservoir, or any other means of diverting

3-5 any of the public water fail to use the water therefrom or thereby for

3-6 beneficial purposes for which the right of use exists during any 5 successive

3-7 years, the right to so use shall be deemed as having been abandoned, and

3-8 any such owner or owners thereupon forfeit all water rights, easements and

3-9 privileges appurtenant thereto theretofore acquired, and all the water so

3-10 formerly appropriated by such owner or owners and their predecessors in

3-11 interest may be again appropriated for beneficial use the same as if such

3-12 ditch, canal, reservoir or other means of diversion had never been

3-13 constructed, and any qualified person may appropriate any such water for

3-14 beneficial use.

3-15 3. No] Rights to the use of surface water shall not be deemed to be

3-16 lost or otherwise forfeited for the failure to use the water therefrom for a

3-17 beneficial purpose.

3-18 3. A surface water right that is appurtenant to land formerly used

3-19 primarily for agricultural purposes is not subject to a determination of

3-20 abandonment if the surface water right:

3-21 (a) Is appurtenant to land that has been converted to urban use; or

3-22 (b) Has been dedicated to or acquired by a water purveyor, public

3-23 utility or public body for municipal use.

3-24 4. In a determination of whether a right to use surface water has

3-25 been abandoned, a presumption that the right to use the surface water

3-26 has not been abandoned is created upon the submission of records,

3-27 photographs, receipts, contracts, affidavits or any other proof of the

3-28 occurrence of any of the following events or actions within a 10-year

3-29 period immediately preceding any claim that the right to use the water

3-30 has been abandoned:

3-31 (a) The delivery of water;

3-32 (b) The payment of any costs of maintenance and other operational

3-33 costs incurred in delivering the water;

3-34 (c) The payment of any costs for capital improvements, including

3-35 works of diversion and irrigation; or

3-36 (d) The actual performance of maintenance related to the delivery of

3-37 the water.

3-38 5. A prescriptive right to the use of [such] the water or any of the

3-39 public water appropriated or unappropriated [can] may not be acquired by

3-40 [adverse user or] adverse possession . [for any period of time whatsoever,

3-41 but any] Any such right to appropriate any of [such water shall] the water

3-42 must be initiated by [first making application] applying to the state

4-1 engineer for a permit to appropriate the [same] water as provided in this

4-2 chapter . [and not otherwise.]

4-3 [4.] 6. The State of Nevada reserves for its own present and future use

4-4 all rights to the use and diversion of water acquired pursuant to chapter

4-5 462, Statutes of Nevada 1963, or otherwise existing within the watersheds

4-6 of Marlette Lake, Franktown Creek and Hobart Creek and not lawfully

4-7 appropriated on April 26, 1963, by any person other than the Marlette Lake

4-8 Company. [No such right may] Such a right must not be appropriated by

4-9 any person without the express consent of the legislature.

4-10 Sec. 4. Chapter 478, Statutes of Nevada 1983, at page 1269, is hereby

4-11 amended by adding thereto a new section to be designated as sec. 2.6,

4-12 immediately following sec. 2.5, to read as follows:

4-13 Sec. 2.6. The state board of examiners shall, at one time or

4-14 from time to time over a 5-year period beginning with the

4-15 effective date of Assembly Bill No. 380 of the 70th session of the

4-16 Nevada Legislature, issue general obligation bonds of the State of

4-17 Nevada to provide the state’s contribution to the Newlands Project

4-18 Water Rights Fund established by Assembly Bill No. 380 of the

4-19 70th session of the Nevada Legislature, in a total face amount of

4-20 not more than $4,000,000. Bonds issued pursuant to this section

4-21 are necessary for the protection and preservation of the state’s

4-22 natural resources.

4-23 Sec. 5. Section 1 of chapter 478, Statutes of Nevada 1983, as amended

4-24 by section 7 of chapter 785, Statutes of Nevada 1989, at page 1866, is

4-25 hereby amended to read as follows:

4-26 Section 1. The director of the state department of conservation

4-27 and natural resources shall participate, on behalf of the state, in

4-28 negotiations with agencies of the Federal Government and other

4-29 appropriate agencies or organizations concerning projects to

4-30 conserve, distribute and allocate water associated with the Truckee

4-31 River, the Carson River, the Lahontan Valley Wetlands and the

4-32 Newlands Federal Reclamation Project. The projects may include

4-33 projects for the purchase or lease of water rights, land or interests in

4-34 land and any water rights appurtenant thereto, or projects to

4-35 mitigate losses to natural resources. The governor, on behalf of the

4-36 State of Nevada, may enter into an agreement or agreements which

4-37 define the rights, powers, duties and obligations of the state, the

4-38 Federal Government and any other appropriate agency or

4-39 organization with respect to those projects, but the state’s share of

4-40 the costs associated with those projects must not exceed

4-41 [$8,000,000,] $12,000,000, and providing that not more than

4-42 [$4,000,000] $8,000,000 of that amount may be used for the

4-43 purchase or lease of water rights or interests in land and any water

5-1 rights appurtenant thereto [.] , and further providing that not more

5-2 than $4,000,000 of that amount may be used as the state’s

5-3 contribution to the Newlands Project Water Rights Fund

5-4 established by Assembly Bill No. 380 of the 70th session of the

5-5 Nevada Legislature.

5-6 Sec. 6. 1. The legislature hereby finds and declares that a general

5-7 law cannot be made applicable to the purposes, objects, powers, rights,

5-8 privileges, liabilities and duties provided in this section because of the

5-9 number of atypical factors and special conditions relating thereto.

5-10 2. The Newlands Project Water Rights Fund is hereby established to be

5-11 administered by the Carson Water Subconservancy District. The money in

5-12 the fund may only be used:

5-13 (a) For the support of the program established pursuant to subsection 4;

5-14 and

5-15 (b) To provide for the payment of an amount to offset revenue from

5-16 operation and maintenance charges lost as a result of water rights retired

5-17 and abandoned pursuant to the program.

5-18 3. The District may accept gifts and grants for deposit in the Fund and

5-19 shall make every effort to secure money for the Fund from:

5-20 (a) The Federal Government;

5-21 (b) The State of Nevada;

5-22 (c) Sierra Pacific Power Company or its affiliates;

5-23 (d) Carson Water Subconservancy District;

5-24 (e) Carson-Truckee Water Conservancy District; and

5-25 (f) Any other interested parties.

5-26 4. The Carson Water Subconservancy District shall establish a program

5-27 for the acquisition of surface water rights to assist in the resolution of legal

5-28 and administrative challenges in existence on April 1, 1999, regarding

5-29 water rights for the Newlands Reclamation Project. The District shall:

5-30 (a) Adopt criteria for the administration of the program, including,

5-31 without limitation, criteria to determine the fair market value of the water

5-32 rights to be acquired;

5-33 (b) Acquire surface water rights appurtenant to not more than 6,500

5-34 acres of land in the Newlands Reclamation Project at an amount not to

5-35 exceed the fair market value of the water rights;

5-36 (c) Acquire these water rights from willing sellers with the execution of

5-37 a suitable binding contract for sale in which the seller acknowledges that,

5-38 upon completion of the sale:

5-39 (1) His right to the water sold is retired and deemed abandoned; and

5-40 (2) He waives any right to claim further compensation for the water

5-41 rights so acquired by the District;

5-42 (d) Retain reasonable fees for the administration or operation of the

5-43 program;

6-1 (e) To the extent that legal and administrative challenges in existence on

6-2 April 1, 1999, result in a final determination that all or any portion of a

6-3 surface water right appurtenant to land in the Newlands Reclamation

6-4 Project has been forfeited or abandoned:

6-5 (1) Pay to the party who procured that final determination an amount

6-6 equal to the amount that would have been paid to acquire the water right

6-7 pursuant to the program; and

6-8 (2) Consider the forfeited or abandoned water right as having been

6-9 acquired pursuant to the program; and

6-10 (f) Complete an annual report on the program and make it available for

6-11 public review.

6-12 Sec. 7. The amendatory provisions of sections 1, 2 and 3 of this act:

6-13 1. Do not apply to water rights that are under challenge in any legal or

6-14 administrative proceeding which is pending on or before April 1, 1999; and

6-15 2. Do not constitute a legislative declaration that the law to be applied

6-16 in any such pending proceeding is different from or the same as set forth in

6-17 this act.

6-18 Sec. 8. 1. This act becomes effective upon passage and approval.