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As legislators weigh changes to water law, litigation and the pipeline loom

Daniel Rothberg
Daniel Rothberg

All of the water lawyers showed up this week.

Some of the developments this week in the ongoing debate over Nevada's water law were to be expected. Others came as a surprise. Everyone from Southern Nevada Water Authority to environmental groups were caught off guard on Tuesday when Sen. Melanie Scheible, who chairs the Senate Natural Resource Committee, called a surprise work session on Assembly Bill 30, a contentious water bill aimed at resolving conflicts between water users and often viewed as a proxy battle over the water authority’s proposed pipeline.

Scheible wrote in an email that she wanted “to discuss the committee’s collective understanding of AB 30 and receive input from committee members on the direction any amendments should go.” That discussion happened, until a recess was called and the meeting was adjourned.

But in the backdrop of that surprise move was an equally dramatic hearing last Thursday.

In the ceaseless conflict over how to use the state’s available water — and maybe then some — a varied group of water users and lawmakers sang a refrain older than Nevada: “Everyone is going to court in the end.” That specific variation of the common theme came from Eureka Sen. Pete Goicoechea, whose district spans six counties and covers most of rural Eastern Nevada.

The ghosts of litigation — past, present and future — loomed over the Thursday Senate Natural Resources Committee hearing that stretched until 8 p.m. and offered insight into why it’s so difficult to update Nevada water law. Not only did the hearing Thursday illuminate the challenges of coming to a consensus on water issues, it displayed the ability of the water buffalo, known to be quiet and intelligent, to enter into unexpected alliances and inch away from perceived ones.

The overarching reason for the hearing was the same as it was in 2017: State regulators want more clarity on Nevada’s often vague water law, as do many water users. Nevada’s top water regulator, the state engineer, has been sued 115 times over the past five years and his office is dealing with 53 open cases. In different contexts, the proposed tweaks can be seen as attempts to answer questions left open by the Supreme Court or set the guardrails for future litigation.

If the Legislature does not act, “all of these problems get worse,” Brad Crowell, who leads the Department of Conservation and Natural Resources, said during an interview on Friday. Yet the Legislature, on these proposed bills and on many other water issues, has not acted in the past.

Enter the stampede

On Thursday night, no water lobbyists testified in support of Assembly Bill 30 and Assembly Bill 62, the two bills that were proposed by Acting State Engineer Tim Wilson. Instead they testified in opposition or in neutrality, with more than a few suggestions. AB 30 addresses new water users while AB 62 addresses existing water users. In addition to the specter of litigation, the Southern Nevada Water Authority’s proposed pipeline project loomed over both.

Nowhere was this more apparent than in debate over Assembly Bill 30, which addresses the nondescriptly named “Monitoring, Management and Mitigation (3M) Plan.” These mitigation plans are used to settle conflicts between water users concerned about protecting their rights.

Central to Western water law is the concept that users who claimed water first have a priority to use water before those who claimed water later. If a water user comes along years later with a “junior right,” the diversion of water must not conflict with a water user who has a “senior right.” Current law directs the state engineer to deny new water rights if there is a conflict. At the same time, the law also makes a reference to using mitigation aimed at resolving a conflict. With AB 30, the state wants the Legislature to resolve the seemingly contradictory clauses in statute.

In past actions, regulators have interpreted the statute as allowing them to approve new water rights with mitigation, including a 3M Plan. The most notable example is in the water authority’s long-standing proposal to pump and pipe groundwater from rural Eastern Nevada to Las Vegas if the Colorado River drought persists and growth continues. It’s why environmentalists opposed the original version of AB 30, which said 3M Plans could be used to “eliminate” a conflict.

That word has now been replaced with “avoid” a conflict, which environmental groups say no longer enables the pipeline. Groups that were once opposed to the state’s bill, such as the Nevada Conservation League and Great Basin Water Network, testified on Thursday as neutral. On this, those environmental groups have formed a delicate alliance with rural interests.

In doing so, the motley coalition traded places with the water authority. Andy Belanger, the water authority’s lobbyist, moved in the other direction, switching from a neutral to opposed position.

A stampede being what it is, there was ample confusion.

Confusion on all sides

There is confusion about the word-swap. Many water lawyers and environmental groups agree the word “avoid” has a different meaning from “eliminate,” even if few people can explain what it is in layman’s terms. Though they agree on that, they disagree as to whether a 3M Plan can still be used. It left the water authority concerned that a disadvantageous interpretation could affect the pipeline. So it proposed its own vague and short amendment: to recognize that the state can use mitigation (the question has not been fully vetted by the Supreme Court) “to resolve issues.”

Crowell, in an interview, said the amendment was designed to kill the bill, a statement that has surprised environmentalists, who have often accused the state of favoring the water authority. In the interview, Crowell added that the hearing should dispel any myths of that perception.

Yet lawyers on all sides of the issue will readily admit that the pipeline’s very presence is overpowering and that the 3M Plan concept is about much more. It could be used to resolve a number of potential conflicts. In fact, much of the litigation around the issue has come out of a case not involving the water authority, but one involving a proposed mine in Eureka’s Kobeh Valley. Lobbyists across the water user spectrum support the idea of mitigation plans in certain cases. Key phrase: in certain cases. The questions revolve around what those cases should be.

Should mitigation be used to address known and deliberate conflicts? An example would be a water user pumping groundwater with the knowledge that it would deplete a spring. Or should a 3M Plan be used to address issues that might arise in the future? An example would be a water user pumping groundwater and unknowingly depleting an interconnected spring decades later.

In Tuesday’s impromptu work session, which ended in a recess, Goicoechea and Sen. Dallas Harris — one of the most vocal senators during the hearings — went back-and-forth on the process for determining a conflict. Harris said it was important to be clear about that in statute.

“The clearer that directive is from us the less likely mitigation is to be messy and for unintended consequences to occur,” Harris, whose district is in Clark County, said on Tuesday.

When does an applicant show they have avoided a conflict by conserving or adjusting their proposed project? Whose responsibility is it to identify a conflict? And whose hydrology should the state trust? Hydrologists often present differing data and groundwater model on projects.

“You can put 10 hydrologists in a room, you might get 10 different answers,” Wilson said at Thursday’s hearing. “It is not necessarily black-and-white. There are a lot of unknowns.”

Everyone wanted to weigh in on AB 30 because everyone had something different at stake. That comes back to the litigation. Many water users on Thursday were posturing in pending legal cases or cases they foresee in the future since “everyone is going to court at the end.”

“Use it or lose it”

The quip about ending up in court turned out to be timely. Several issues addressed in Wilson’s second bill, AB 62, had been taken up the week before in a decision by the Supreme Court.

AB 62 looks to close a loophole that could allow water speculators to hold onto water rights indefinitely. Under Western water law, irrigators and municipalities must put their water to “beneficial use” for activities like farming and drinking water, or risk losing their full allocation.

In reality, water users can avoid what is known as the “use it, or lose it” doctrine by indefinitely applying for extensions in constructing projects, such as a well or a diversion, to use their water. At the same time, their water right, even if it is not put to use, is effectively accounted for as though it is. That prevents other users, who might have projects ready, from using the water.

“If you’re not willing to show that you have a legitimate reason to hold onto that water, and preferably through a public hearing, it’s hard to argue why you need it,” Crowell said. “We’re not trying to take anyone’s water rights away. But we’re also not trying to penalize other users who have applied for water... and are ready to [develop] it in a much sooner time.”

With AB 62, the state engineer could cap extensions to 15 years for municipal providers, unless there are circumstances beyond one’s control, like an issue with permitting or a court action.

At Thursday’s hearing, water utilities rural and urban offered a Nevada reply: “Don’t Fence Me In.” Lobbyist after lobbyist agreed there was a problem, but they said the bill was not the right path to fix it, the 15-year cap was arbitrary and that municipal utilities had a statutory duty to plan decades out into the future, a contradiction that was echoed by Sen. Ira Hansen.

“We tell the water purveyors to plan for the future, including the acquisition of water for the growth in Clark County, for example,” Hansen said. “You guys do it. Now we’re going to come back and say, ‘uh-oh you have to use beneficially that water within a 15-year window or we’re going to come back and punish you for planning the 40-year window we ordered you to do.’”

The most heated exchange came between the state and the water authority.

Nevada’s largest water purveyor, the Southern Nevada Water Authority, came out against the bill, arguing it could affect its water resource plan, perversely moving up the date for its pipeline. If there is a 15-year timeline, Belanger argued it could force the water authority to reconsider its water resource portfolio, which currently puts off the pipeline project until at least 2040.

“Our concern is it forces the hand on the priority and ordering of projects,” Belanger said.

On May 2, the Nevada Supreme Court weighed in on the issue as part of a case about sending water to Lemmon Valley, remanding to the state engineer a decision over granting an extension. That suggested to some that the courts were already applying anti-speculation law to the issue.

But at the hearing, Crowell said the courts were part of the reason why the state was pushing AB 62. When the state engineer denies an extension, its decision is often challenged in court.

What happens next?

Today the bills are likely to be taken up again, and the water buffalos will be back.

In an interview Friday, Goicoechea said AB 62 was a “non-starter.”

At the hearing, tensions between the state and the water authority were on full display. The state argued that the water authority had been negotiating in bad faith, appearing to have come to an agreement on an amendment passed by the Assembly and then walking back its support. In his testimony, Belanger said he understood there were “some hard feelings,” suggesting that there was a miscommunication and noting he did not have institutional support for the amendment.

“That’s making these conversations more challenging,” Crowell said at the end of the hearing. “And I don’t want to have conversations and constructive dialogue unless they are in good faith. And we can’t get to a solution without the largest water provider in the state.”

The water authority, in an emailed statement Tuesday, said that “water legislation is complex and requires thoughtful consideration to prevent unintended consequences. We continue to support the state engineer’s efforts to address those complicated issues. We are engaged in conversations with the respective parties, remaining hopeful of reaching a balanced outcome.”

As for AB 30, various water interests met throughout the week to discuss how to move forward.

Crowell said on Friday that some of the issues raised by the legislators and water users were workable. But it remains unclear whether a mitigation bill can pass without the water authority’s support. The Las Vegas Chamber of Commerce and the Operating Engineers Local 12 also came out against it.

To Goicoechea, the debate over the mitigation bill reflects a changing Legislature. Although it is weighted to Clark County, he said the body has younger and more liberal representatives who want to ensure there are safeguards to mitigate environmental impacts when water is used.

“I think SNWA is going to have to recognize that this Legislature has changed and they are going to have to give,” he said. “The environmental groups have really taken charge.”

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