Senate hears SB36 to authorize voluntary groundwater-rights retirement program; amendment would create program, account and 10-year sunset

Senate Bill 36, presented by Senator Julie Pizzina, would authorize a voluntary groundwater-rights retirement program intended to reduce groundwater overuse and protect groundwater-dependent ecosystems. Senator Pizzina said the bill implements a recommendation of the Joint Interim Standing Committee on Natural Resources.

Under a conceptual amendment posted to NELIS and described by Jeff Fontaine, executive director of the Central Nevada Regional Water Authority, the bill would make several changes to state law: create a Nevada Conservation and Recreation Program within the Department of Conservation and Natural Resources (DCNR) to administer the existing state conservation bond program and a new Nevada Voluntary Water Rights Retirement Program; create an "account for retiring water rights" to accept gifts, grants and other funds; authorize the director of DCNR to purchase or accept donated water rights from willing sellers and "retire" them so the groundwater is precluded from appropriation "in perpetuity"; and include a sunset for the program (the amendment sets a 10-year sunset to 06/30/2035 in the posted language).

Laurel Saito, Nevada Water Strategy Director for The Nature Conservancy, described the proposal as a voluntary tool to resolve groundwater overuse in places where strict curtailment by priority may not protect natural resources. "This bill offers another tool to address these situations," Saito said, noting other states such as Kansas and Colorado have employed retirement programs. Saito and Fontaine said a 2023 pilot program used American Rescue Plan Act funds to retire over 20,000 acre-feet of groundwater rights and that those pilots generated additional interest in retirement opportunities.

The amendment would require the director to identify target areas and document in writing the purposes for retirement (for example, to protect natural resources, address declining groundwater levels, or resolve conflicts that threaten domestic wells) and direct the state engineer to retire water rights the program purchases or receives.

Supporters who testified included conservation organizations (Nature Conservancy, Sierra Club), water authorities (Southern Nevada Water Authority, Moapa Valley and Virgin Valley water districts), tribal representatives (Pyramid Lake Paiute Tribe), local water authorities and producers who participated in the pilot. Testimony from Diamond Valley growers Denise Moyle and Diane Moyle Hicks described the pilot as a pragmatic, voluntary option for some agricultural holders and urged that the program preserve choice for farm families.

Opponents and cautionary witnesses included Robert Kochan, a former deputy state engineer who testified in opposition, arguing the pilot program had purchased large amounts of "paper" or dry water and that purchases in some basins had little effect on resource or conflict resolution. Kochan said the 2023 pilot spent roughly $25 million to acquire about 21,000 acre-feet, and he said much of that acreage represented water rights with no active beneficial use. Kochan recommended relying on the state engineer's existing authorities to address conflicts rather than establishing a buyback program.

Several stakeholders urged the Legislature to authorize the program but to identify clear funding pathways. Committee members asked where money would come from; Jeff Fontaine said the program would be eligible for federal grants and that retired-rights purchases could be funded through the capital grants program for drinking-water systems or the state bond conservation program if money is made available.

Key amendment features described to the committee: - Program administration housed at DCNR under a Nevada Conservation and Recreation Program. - Director may accept gifts, grants, federal funds or legislative appropriations into a designated account. - The state engineer shall retire rights purchased or donated to the program and preclude those rights from future appropriation, with documentation retained in state engineer files. - Program would sunset on or about 06/30/2035 (10-year test period in the posted amendment). - The amendment removes an advisory board and related fiscal note, relying instead on existing technical groups and agency rulemaking.

The committee received broad supportive testimony from conservation groups, water districts, tribal representatives and producers who participated in the pilot, while some former agency staff and others opposed or urged caution. No appropriation for the program was included in the bill or the amendment before the committee; sponsors said the amendment intentionally removed a fiscal note to increase the bill's chance of moving forward and to allow future funding to be sought.

The committee held public testimony and did not take a formal vote.