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

1-10 for initiation of the project, unless the water rights vested under the law

1-11 in this state before the time the United States first appropriated or

1-12 otherwise acquired the water for initiation of the project. If the water

2-1 right vested under the law in this state before appropriation or

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

2-3 determined according to the date on which the water was first diverted

2-4 under that appropriation or acquisition by the United States.

2-5 2. No water rights, in addition to those allocated under applicable

2-6 court decrees, are granted, stated or implied by the determination of the

2-7 date of priority pursuant to subsection 1.

2-8 Sec. 2. NRS 533.040 is hereby amended to read as follows:

2-9 533.040 [All]

2-25 4. For the purposes of this section, a surface water right acquired by

2-26 a water user in a federal reclamation project may be considered

2-27 appurtenant to an entire farm, instead of specifically identifiable land

2-28 within that farm, upon the granting of a permit for the change of place

2-29 of use by the state engineer which designates the place of use as the

2-30 entire farm. The quantity of water available for use on that farm must

2-31 not exceed the total amount determined by applicable decrees as

2-32 designated in the permit granted by the state engineer.

2-33 5. As used in this section, "farm" means a tract of land under the

2-34 same ownership that is primarily used for agricultural purposes.

2-35 Sec. 3. NRS 533.060 is hereby amended to read as follows:

2-36 533.060 1. Rights to the use of water [shall] must be limited and

2-42 and [shall] must not be considered as having been appropriated thereby.

3-1 2. [Except as otherwise provided in subsection 4, if the owner or

3-2 owners of any such ditch, canal, reservoir, or any other means of diverting

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

3-4 beneficial purposes for which the right of use exists during any 5 successive

3-5 years, the right to so use shall be deemed as having been abandoned, and

3-6 any such owner or owners thereupon forfeit all water rights, easements and

3-7 privileges appurtenant thereto theretofore acquired, and all the water so

3-8 formerly appropriated by such owner or owners and their predecessors in

3-9 interest may be again appropriated for beneficial use the same as if such

3-10 ditch, canal, reservoir or other means of diversion had never been

3-11 constructed, and any qualified person may appropriate any such water for

3-12 beneficial use.

3-13 3. No] Rights to the use of surface water shall not be deemed to be

3-14 lost or otherwise forfeited for the failure to use the water therefrom for a

3-15 beneficial purpose.

3-16 3. A surface water right that is appurtenant to land formerly used

3-17 primarily for agricultural purposes is not subject to a determination of

3-18 abandonment if the surface water right:

3-19 (a) Is appurtenant to land that has been converted to urban use; or

3-20 (b) Has been dedicated to or acquired by a water purveyor, public

3-21 utility or public body for municipal use.

3-22 4. In a determination of whether a right to use surface water has

3-23 been abandoned, a presumption that the right to use the surface water

3-24 has not been abandoned is created upon the submission of records,

3-25 photographs, receipts, contracts, affidavits or any other proof of the

3-26 occurrence of any of the following events or actions within a 10-year

3-27 period immediately preceding any claim that the right to use the water

3-28 has been abandoned:

3-29 (a) The delivery of water;

3-30 (b) The payment of any costs of maintenance and other operational

3-31 costs incurred in delivering the water;

3-32 (c) The payment of any costs for capital improvements, including

3-33 works of diversion and irrigation; or

3-34 (d) The actual performance of maintenance related to the delivery of

3-35 the water.

3-36 5. A prescriptive right to the use of [such] the water or any of the

3-37 public water appropriated or unappropriated [can] may not be acquired by

3-38 [adverse user or] adverse possession . [for any period of time whatsoever,

3-39 but any] Any such right to appropriate any of [such water shall] the water

3-40 must be initiated by [first making application] applying to the state

3-41 engineer for a permit to appropriate the [same] water as provided in this

3-42 chapter . [and not otherwise.]

4-1 [4.] 6. The State of Nevada reserves for its own present and future use

4-2 all rights to the use and diversion of water acquired pursuant to chapter

4-3 462, Statutes of Nevada 1963, or otherwise existing within the watersheds

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

4-5 appropriated on April 26, 1963, by any person other than the Marlette Lake

4-6 Company. [No such right may] Such a right must not be appropriated by

4-7 any person without the express consent of the legislature.

4-8 Sec. 4. 1. There is hereby appropriated from the state general fund to

4-9 the Newlands Project Water Rights Fund, created by section 5 of this act,

4-10 the sum of $3,300,000 as the state’s contribution to the fund for the

4-11 protection and preservation of the natural resources of this state. All

4-12 interest generated from this appropriation accrues to the benefit of the

4-13 Newlands Project Water Rights Fund.

4-14 2. The Carson Water Subconservancy District shall not commit for

4-15 expenditure any amount of the appropriation made by subsection 1 until the

4-16 District determines that:

4-17 (a) There is and will continue to be substantial compliance with the

4-18 "Joint Testimony of Truckee-Carson Irrigation District, Pyramid Lake

4-19 Paiute Tribe of Indians, City of Fallon, Churchill County and Sierra Pacific

4-20 Power Company," dated by the parties thereto on May 6, 1999, and

4-21 submitted to a hearing of the Senate Standing Committee on Finance on

4-22 May 24, 1999; and

4-23 (b) The City of Fallon and Churchill County have withdrawn all

4-24 administrative protests and have sought to dismiss all legal actions initiated

4-25 by the city and county, respectively, relating to applications for changes in

4-26 the point of diversion, place of use or manner of use of water rights pending

4-27 before the State Engineer on the effective date of this act as required by that

4-28 joint testimony.

4-29 3. The Carson Water Subconservancy District shall not commit for

4-30 expenditure during the next biennium more than $1,600,000 of the

4-31 appropriation made by subsection 1.

4-32 4. Any remaining balance of the appropriation made by subsection 1

4-33 must not be committed for expenditure after June 30, 2004, and reverts to

4-34 the state general fund as soon as all payments of money committed have

4-35 been made.

4-36 Sec. 5. 1. The legislature hereby finds and declares that a general

4-37 law cannot be made applicable to the purposes, objects, powers, rights,

4-38 privileges, liabilities and duties provided in this section because of the

4-39 number of atypical factors and special conditions relating thereto.

4-40 2. The Newlands Project Water Rights Fund is hereby established to be

4-41 administered by the Carson Water Subconservancy District. The money in

4-42 the fund may only be used:

5-1 (a) For the support of the program established pursuant to subsection 4;

5-2 and

5-3 (b) To provide for the payment of an amount to offset revenue from

5-4 operation and maintenance charges lost as a result of water rights retired

5-5 and abandoned pursuant to the program.

5-6 3. The District may accept gifts and grants for deposit in the Fund and

5-7 shall make every effort to secure money for the Fund from:

5-8 (a) The Federal Government;

5-9 (b) The State of Nevada;

5-10 (c) Sierra Pacific Power Company or its affiliates;

5-11 (d) Carson Water Subconservancy District;

5-12 (e) Carson-Truckee Water Conservancy District; and

5-13 (f) Any other interested parties.

5-14 4. The Carson Water Subconservancy District shall establish a program

5-15 for the acquisition of surface water rights to assist in the resolution of legal

5-16 and administrative challenges in existence on April 1, 1999, regarding

5-17 water rights for the Newlands Reclamation Project. The District shall:

5-18 (a) Adopt criteria for the administration of the program, including,

5-19 without limitation, criteria to determine the fair market value of the water

5-20 rights to be acquired;

5-21 (b) Acquire surface water rights appurtenant to not more than 6,500

5-22 acres of land in the Newlands Reclamation Project at an amount not to

5-23 exceed the fair market value of the water rights;

5-24 (c) Acquire these water rights from willing sellers with the execution of

5-25 a suitable binding contract for sale in which the seller acknowledges that,

5-26 upon completion of the sale:

5-27 (1) His right to the water sold is retired and deemed abandoned; and

5-28 (2) He waives any right to claim further compensation for the water

5-29 rights so acquired by the District;

5-30 (d) Retain reasonable fees for the administration or operation of the

5-31 program;

5-32 (e) To the extent that legal and administrative challenges in existence on

5-33 April 1, 1999, result in a final determination that all or any portion of a

5-34 surface water right appurtenant to land in the Newlands Reclamation

5-35 Project has been forfeited or abandoned:

5-36 (1) Pay to the party who procured that final determination an amount

5-37 equal to the amount that would have been paid to acquire the water right

5-38 pursuant to the program; and

5-39 (2) Consider the forfeited or abandoned water right as having been

5-40 acquired pursuant to the program; and

5-41 (f) Complete an annual report on the program and make it available for

5-42 public review.

6-1 Sec. 6. The 71st regular session of the Nevada Legislature shall review

6-2 the manner in which the appropriation made by section 4 of this act has

6-3 been expended and determine whether there has been substantial

6-4 compliance with the "Joint Testimony of Truckee-Carson Irrigation

6-5 District, Pyramid Lake Paiute Tribe of Indians, City of Fallon, Churchill

6-6 County and Sierra Pacific Power Company," dated by the parties thereto on

6-7 May 6, 1999, and submitted to a hearing of the Senate Standing Committee

6-8 on Finance on May 24, 1999.

6-9 Sec. 7. The amendatory provisions of sections 1, 2 and 3 of this act:

6-10 1. Do not apply to water rights that are under challenge in any legal or

6-11 administrative proceeding which is pending on or before April 1, 1999; and

6-12 2. Do not constitute a legislative declaration that the law to be applied

6-13 in any such pending proceeding is different from or the same as set forth in

6-14 this act.

6-15 Sec. 8. 1. This act becomes effective upon passage and approval.