Nevada committee hears bill to create voluntary water-rights retirement program, with broad stakeholder support and technical amendments

Assembly Bill 104, a comprehensive measure to establish a voluntary water-rights retirement program and revise several groundwater and water-conservation provisions, received an extended hearing March 10 before the Nevada Senate Committee on Natural Resources.

Assemblywoman Natha Anderson, sponsor of AB104, said the bill grew from an 18-month stakeholder working group and a joint interim committee recommendation. The proposal would create the Nevada Voluntary Water Rights Retirement Program, place it within a new Nevada Conservation and Recreation program inside the Department of Conservation and Natural Resources (DCNR), and authorize an account to purchase and permanently retire water rights from willing sellers. The bill as introduced sunsets the program on June 30, 2035.

Alan Biaggi, representing a group of water professionals and the Nevada Mining Association, told the committee the voluntary retirement program would direct the State Engineer to permanently retire rights the director deems appropriate and to ensure retired rights cannot be reallocated. Biaggi described other provisions in AB104 that address water reuse, variances to water-quality standards pending EPA approval, and Southern Nevada-specific items such as revocable permits and septic-to-sewer conversions.

The bill would also make conforming changes to several Nevada Revised Statutes — including provisions governing groundwater appropriation and the State Engineer’s handling of applications — to reflect and implement the retirement process. Biaggi and other presenters noted that the bill replaces the word “vested” with “adjudicated” in many places to ensure the program targets water rights that are legally established and previously used, not paper water.

Key program elements described in testimony:

- The DCNR director would administer the program and the retirement account; funds may include legislative appropriations, grants, federal funding, gifts or donations; the bill contains no fiscal request in its current form.

- Priority for purchases would be given to basins where an order from the State Engineer precludes new appropriations; the director would document retired rights with the Office of the State Engineer.

- The program sunsets in 2035 to allow legislative evaluation.

Multiple stakeholders offered support. Testimony in favor came from county governments (Eureka and Churchill counties), conservation groups (The Nature Conservancy, Nevada Conservation League, Great Basin Water Network), agricultural and industry groups (Nevada Farm Bureau, Nevada Mining Association), basin authorities (Central Nevada Regional Water Authority, Humboldt River Basin Water Authority) and foundations (The Pew Charitable Trusts). Several speakers said the bill builds on a pilot program that used $25 million in ARPA funds to retire approximately 21,000 acre-feet of water rights through willing sellers.

State Engineer Adam Sullivan testified in neutral, offering technical edits the division supported. Sullivan said proposed conforming language — including replacing “vested” with “adjudicated” and clarifying references to retired groundwater in NRS 533, 533.370 and 533.371 — better aligns the statutory language with the State Engineer’s administration and the bill’s intent. He also agreed “or” is preferable to “and” in a cross-reference in section 10 to match related SB36 language.

Opposition testimony was limited but raised practical concerns about Section 16, which allows grant funds for septic abandonment and sewer connections in Clark County. Diane Henry testified in opposition only to Section 16, asking for clearer parameters or cost limits because conversions can be expensive; she warned small neighborhoods could face large bills if grants do not sufficiently cover conversion costs.

Senators and witnesses discussed other technical points: a 1,250-foot drilling prohibition for new domestic wells in certain Southern Nevada municipal service areas, distinctions between revocable and temporary permits used in Las Vegas Valley, and how funds in the retirement account may be invested and protected from reversion to the general fund. Several speakers reiterated that the retirement account would be used only for buying and retiring water rights and that the legislature had not requested an appropriation in the bill as presented.

Committee members and stakeholders described a long, collaborative work process and noted the bill reflects broad input. The working group and bill sponsors proposed a conceptual amendment to clarify that retiring groundwater rights in a basin should not automatically “close” the basin to normal administration by the State Engineer; rather, retired rights could not be reallocated while the basin remained administrable for other purposes.

Senators Wynne, Scheibel and Cruz Crawford submitted and sponsors supported an amendment to delete section 21.3, which had proposed using excessive-use charges for certain programs; the sponsoring parties said they did not intend to bring that language forward and supported removing it to avoid jeopardizing the broader bill.

The committee took extensive support testimony and limited opposition limited to the septic-conversion funding question. No formal committee vote was recorded during the hearing; the sponsor waived closing remarks and the hearing record closed for AB104.

If enacted, AB104 would establish a statutory mechanism for voluntary, compensated retirement of water rights, create a DCNR-administered account to fund retirements, and add several groundwater-management and Southern Nevada-specific provisions. Proponents said the program would be another tool — alongside priority curtailment and other measures — to address over-appropriation and stabilize groundwater basins.