Nevada Passes New Legislation for Voluntary Water Rights Retirement Program

Nevada has enacted two new laws—Assembly Bill 104 (AB104) and Senate Bill 36 (SB36)—that establish a framework for a voluntary groundwater rights retirement program. The intent is to address chronic groundwater overuse in some of the state’s most heavily impacted basins.

Background: Over-Allocated Groundwater in Nevada

Nevada receives roughly 9 inches of precipitation annually, making it the driest state in the country. In response to long-term water demands from agriculture, development, and other sectors, the state issued more groundwater rights than the available supply can support. As a result, over half of Nevada’s 256 groundwater basins are considered over-appropriated, and about a quarter are actively overpumped.

About the New Laws

The two bills—AB104 and SB36—aim to create a structure for purchasing and permanently retiring groundwater rights in selected basins. Key features include:

• Voluntary Participation: The program is open to water rights holders who choose to sell or retire their rights.
• Environmental Criteria: Proposed retirements must support groundwater sustainability, reduce over-pumping, or protect natural resources.
• Administration: The program will be overseen by the Nevada Department of Conservation and Natural Resources (DCNR).
• Sunset Clause: Both laws are scheduled to expire in 2035, allowing for review and potential extension.

Importantly, the legislation itself does not allocate funding for purchasing rights, though supporters suggest that funding could come from existing state or federal programs.

A Pilot Program Preceded the Legislation

Prior to these bills, Nevada launched a one-time pilot buyback program in 2023 using $25 million in federal funds. The program retired over 22,500 acre-feet of groundwater across various basins. The results informed the structure of AB104 and SB36.

Additional Provisions in AB104

AB104 includes unrelated amendments such as:

• Clarifying eligibility for septic-to-sewer conversion assistance.
• Authorizing the State Environmental Commission to establish certain water quality standard variances.

Key Considerations Moving Forward

• Equity of Retirement: A portion of previously retired rights were “paper” water rights (unused). Lawmakers and stakeholders have noted the need for clearer distinctions between active and inactive rights in future rounds.
• No Guaranteed Funding: Without dedicated funding, participation may depend on whether the state or other partners provide financial backing.
• Local Impacts: The effects will vary by region. While not a comprehensive solution to Nevada’s water challenges, the bills are intended to be a targeted tool in specific areas experiencing the greatest strain.

Final Thoughts

The passage of AB104 and SB36 reflects an effort to reduce groundwater conflicts and begin addressing long-standing water imbalances in select areas of the state. While the scale and effectiveness of the program will depend on future funding and participation, the legislation provides a formal pathway for voluntary water rights retirement in Nevada.

Disclaimer: This blog is provided as a public resource for informational purposes only and does not constitute legal or policy advice. The Batchelor Hanna Group – REAL Broker LLC is not affiliated with the Nevada Legislature or any government agency. For more information about the new laws, visit leg.state.nv.us.