In the wake of ongoing controversy over the reach of U.S. Agency jurisdiction, a Senate Appropriations Committee is taking steps to decrease funds available for many Agencies for the upcoming year, in an attempt to limit any overreach.  On June 16, 2016 the Senate Committee approved budget cuts to the United States Fish and Wildlife Service (“USFWS”) and Environmental Protection Agency (“EPA”). Sponsored by Senator Lisa Murkowski from Alaska, the bill covers funding of many agencies and topics, with specific statements relating to public land agencies and funding.

Most notably, the bill proposes to cut the USFWS’s budget by $11.9 million as compared to the 2016 budget. Proposed cuts equally would affect the EPA’s budget to the tune of $31.2 million. Interestingly, and related to the funds allocated to the EPA, the bill states that, “None of the funds made available in this Act or any other Act, may be used to develop, adopt, implement, administer, or enforce any change to the regulations and guidance in effect on October 1, 2012, pertaining to the definition of waters under the jurisdiction of the Federal Water Pollution Control Act…”

While the measure is likely to be altered as it goes before the Senate, it marks a movement by many to limit funding to U.S. Agencies in charge of public lands, and seeks to limit the jurisdictional overreach the Agencies often assert. Those behind such measures believe that if the Agencies lack the funds to assert their jurisdiction, their resources will be dedicated in furtherance of the respective Agencies’ core goals, rather than working to increase their jurisdictional effect and power.

For the full text of the proposed bill, please visit https://www.congress.gov/114/bills/s3068/BILLS-114s3068pcs.pdf.

The Clean Water Act is an issue of gathering significance with the Environmental Protection Agency and adoption of a newly defined “waters of the United States” (“WOTUS”), wherein civil and criminal penalties can attach if pollutant is discharged into jurisdictional waters. Thus, whether water is defined as “jurisdictional” becomes an important significance. On May 31, 2016, the U.S. Supreme Court issued a ruling in United States Army Corps of Engineers v. Hawkes Co., Inc., et al., regarding Clean Water Act (“CWA”) application and the regulatory jurisdiction of the United States over water resources.

In the lawsuit, three peat mining companies sought a permit from the Army Corps of Engineers to discharge certain material into a wetland. The companies sought a “jurisdictional determination” from the Army Corps of Engineers stating that the property was jurisdictional under the Clean Water Act. Disagreeing with the determination, the companies sought review of the determination under the Administrative Procedure Act, appealing the determination to Federal District Court. The Federal District Court dismissed the matter, holding that a jurisdictional determination is not a “final agency action” allowing the right of an appeal to the Court.

Upon review by the U.S. Supreme Court, the Court overturned the lower court, and found that a jurisdictional determination is in fact a final agency action and judicially reviewable. While this ruling does not affect the current stay of the newly adopted rule governing the definition of WOTUS, it does shed light on procedure and available remedies should water be found to be jurisdictional, where a permit application disagrees.

This decision is overall good news for those seeking to comply under the Clean Water Act, and where the EPA and Corps may overstep their bounds in finding certain water to be jurisdictional. Any determination of jurisdiction is reviewable in Federal Court, where an individual can properly assert and provide evidence that certain water is in fact not jurisdictional. In any event, this decision sparks the beginning of likely a long line of cases pending around the country relating to the CWA’s jurisdictional reach.

For the full text of the case, please visit http://www.supremecourt.gov/opinions/15pdf/15-290_6k37.pdf.

On May 9, 2016, Governor Jerry Brown of California signed an executive order making certain water conservation measures permanent. The measure is meant to build on temporary emergency water restriction in place since last year. Brown’s office reports that “between June 2015 and March 2016, Californians reduced water use by 23.9 percent compared with the same months in 2013 – saving enough water to provide 6.5 million Californians with water for one year.”

The executive order primarily implements long term planning solutions for local drought and directs the California State Water Resources Control Board to develop further emergency provisions should the drought continue. This new action is summarized in the Governor’s plan to “Make Conservation a California Way of Life.”

More specifically, the plan requires additional monthly reporting by urban water suppliers, requiring information on use, conservation, and enforcement. The provisions further claim to eliminate water waste, prohibiting hosing off sidewalks, driveways, at home washing of autos using hoses not equipped with nozzles, and watering lawns in manner that causes runoff.  The Water Board will also work to minimize system leaks responsible for wasting more than 700,000 acre-feet of water per year. While already strictly regulated, agriculture use is also heavily considered, updating the requirements for Agricultural Management Plans allowing irrigation districts to quantify customers’ use and appropriately plan for shortages.

While water restrictions and regulations are becoming more permanent, Californians will continue to face heavier scrutiny. It is ultimately the user who will face the increased burden, however, the hope is that the systems themselves will promote efficiency, providing a better use of water across all systems and types of use.

For more information on the executive order and its full text, please visit https://www.gov.ca.gov/news.php?id=19408.

Upon facing the fourth year of consecutive drought, the Nevada Drought Forum formed in April 2015 by Nevada Governor Brian Sandoval to assist with water resource challenges in the State of Nevada. The Forum was comprised of members representing various governmental and quasi-governmental agencies in charge of managing water resources in the State. In September 2015, a Drought Summit was held at the Nevada Legislature, where those involved discussed many of the drought problems Nevada is facing, and numerous presentations were offered on these issues. At the conclusion of the Forum activities, and in December 2015, the Governor was presented with a Recommendations Report summarizing the conclusions made by the Form, and proposed future action.

The Drought Forum recommendations come in seven (7) categories including: 1) Water Conservation, 2) Nevada Water Law, 3) Monitoring and Research Data, 4) Financial and Technical Assistance, 5) Supply Augmentation and Long-Range Planning, 6) Information Sharing and Outreach, and 7) Drought Declarations/Emergency Actions. Each category offers specific suggested action items for the Governor’s consideration. Strategies include requiring meters on all groundwater connections, tiered rate structures, updates to Nevada water law, judicial education on water issues, and refinement to drought criteria, among others.

At this stage, no specific action is taking place on the issues presented; however, the conversation is started on where Nevada will head in response to ongoing drought conditions. While real action can sometimes take years to implement, the Recommendations come as a positive sign that Governor Sandoval is interested in suggested strategies advocated by water professionals around the state. There remains time for those interested in becoming involved to voice their concerns and positions with the Governor in upcoming events dedicated to this ongoing discussion.

For more information about the Governor’s Drought Form visit http://drought.nv.gov/.

For Additional information concerning the Recommendations Report visit http://drought.nv.gov/News/Nevada_Drought_Forum__Recommendations_Report_-_December_2015/.

LOVELOCK, Nevada – The Pershing County Water Conservation District (PCWCD) has assumed sole ownership of Rye Patch Dam and Reservoir, and therefore majority control of the Humboldt Project, having acquired property and water rights from the United States Bureau of Reclamation (BOR).

The transfer process, which began in 2002, was finalized with the recording of a quitclaim deed in Pershing County on January 15^th, 2016. The deed conveyed 10,688.50 acres outright in addition to 1,519.13 acres of easement lands, 49,667.44 acre-feet of direct water diversion rights from the Humboldt River, and 115,152.32 acre-feet of water storage rights for Rye Patch Reservoir.

The Humboldt Project dates back to the early 1930s, when PCWCD began negotiations with BOR for construction as authorized under the National Industrial Recovery Act. The Public Works Administration allocated $2 million for the creation of the project, which led to the construction of Rye Patch Reservoir. The first deliveries of stored water were made in the Spring of 1941.

To help fund the project in the early part of the last century, PCWCD purchased private land and water rights from nearby ranches in the Battle Mountain and Valmy areas. PCWCD then assigned its rights under the purchase agreements to BOR, both to facilitate the transfer of water rights to storage at Rye Patch for use on district lands and as collateral for money the government had advanced PCWCD for those purchases. The lands acquired for the Humboldt Project were classified as either “withdrawn lands,” which were withdrawn from the public domain, or “acquired lands,” which were private ranch lands and associated water rights that PCWCD purchased then assigned to BOR.

PCWCD entered into a repayment contract with BOR, which called for full reimbursement of all Humboldt Project construction and acquisition costs over a 40-year period. Then, after several attempts by Nevada’s Congressional delegation to draft legislation that would transfer title of the Humboldt Project to PCWCD, the Humboldt Project Conveyance Act (Title VIII, Section 803 of Public Law 107-282) was finally passed in 2002. The Secretary of the Interior, who oversees BOR, was directed to convey to PCWCD, the state of Nevada, Pershing County, and Lander County all title and interest to the lands and features of the Humboldt Project.

Among the last steps taken was the transfer, by way of U.S. land patent, of 3,761.28 acres of withdrawn lands in August of 2015.

PCWCD will celebrate the title transfer in a ceremony at the Lovelock Community Center on Friday, March 11^th, 2016.  Federal, state and local dignitaries are expected to attend.

On December 22, 2015, the United States Environmental Protection Agency (“EPA”) announced funding of more than $19 Million for drinking water and wastewater infrastructure projects in Nevada. The program funds fall under Nevada’s Clean Water State Revolving Fund, and provides money for state projects that promote clean water through wastewater treatment projects and improvements to drinking water infrastructure in the State. The EPA’s Regional Administrator stated that “This substantial investment at the federal level helps communities develop the infrastructure needed for clean, safe drinking water and proper wastewater treatment. EPA is committed to protecting the water resources so important public health and Nevada’s economy.”

Funds supplied under the EPA program will go to provide financing for state projects such as upgrading septic systems to sewer, and renovations to wastewater treatment facilities to increase efficiency, as well as support projects for better and more efficient access to clean drinking water, such as water storage and water system upgrades. The funds this year will combine with over $200 Million in federal funding previously provided to Nevada’s Clean Water and Drinking Water State Revolving Fund since the project began. While the EPA’s influence can at times be controversial, federal funding is important to State projects, where both municipal and agriculture interests can often benefit from the funds supplied for needed water projects.

More information on the topic can be found at the EPA Web Site.

On November 3, 2015, the United States Senate voted on legislation meant to repeal the federal regulation re-defining “Waters of the United States” (“WOTUS”). WOTUS sets EPA’s jurisdiction, and thereby how far the EPA can reach to regulate various waterways. The regulation increases federal jurisdiction over water within the United States, which many believe will increase federal oversight over certain water sources, especially that used for agriculture. The primary concern is that water use that was once exempt, will now fall under federal jurisdiction requiring new permitting and regulatory procedure, adding additional costs to use of this “jurisdictional” water. Through a bipartisan vote, with 57 senators voting for, and 41 against, the legislation failed to meet the 60 vote requirement, effectively scrapping the Bill.

On November 6, 2015, in a follow-up attempt to repeal with “WOTUS” Rule, Sen. Joni Ernst from Iowa sponsored a joint resolution of disapproval of the Rule. With the joint resolution passing in the Senate, Sen. Ernst stated, “Today’s passage to scrap the expanded WOTUS rule is a major win for our hardworking farmers, ranchers, manufacturers, and small businesses who are continuously ignored by the EPA. It is abundantly clear that the WOTUS rule is ill-conceived and breeds uncertainty, confusion, and more red tape that threatens the livelihoods of many in Iowa and across the country.” The House will now consider the joint resolution, however, President Obama has expressed his intent to veto any law that seeks to repeal or alter the current WOTUS rule.

In the meantime, legal battles over WOTUS continue, as now more than 30 states have filed lawsuits against the EPA seeking to stay the Rule’s implementation. The effect of WOTUS remains stayed for a number of states until the EPA works through the legal challenges.

Update:

Since the November 6, 2015 vote by the United States Senate in support of a Joint Resolution (S.J. Res. 22) to set aside the EPA’s new rule under the CWA concerning “Waters of the United States” on January 6, 2016, the United States House of Representatives equally voted in support of the Joint Resolution. This vote effectively sent the matter to the President, and as predicted, on January 19, 2016, President Obama vetoed the Joint Resolution, his ninth veto since taking office.

In the President’s press release regarding his veto of the Joint Resolution, he stated that, “The rule, which is a product of extensive public involvement and years of work, is critical to our efforts to protect the Nation’s waters and keep them clean, is responsive to calls for rulemaking from the Congress, industry, and community stakeholders, and is consistent with decisions of the United States Supreme Court.” President Obama went on to state that “Pollution from upstream sources ends up in the rivers, lakes, reservoirs, and coastal waters near which most Americans live and on which they depend for their drinking water, recreation, and economic development.”

Senator Joni Ernst, a Republican from Iowa who sponsored the Resolution, stated in response that “This rule is not about clean water. Rather, it is about how much authority the federal government and unelected bureaucrats should have to regulate what is done on private land.”

The President’s veto, and the Rule’s implementation comes as a large regulatory hurdle many farmers and ranchers will have to navigate, with the potential for additional permitting and fees to operate in and around private water sources. While the Rule does exempt irrigation waters under certain circumstances, many questions remain as to the reach the Rule will have. While the Rule continues to be implemented, it remains stayed pending further Court action.

On June 29, 2015 the Environmental Protection Agency (“EPA”) published a new rule under the Clean Water Act, re-defining “Waters of the United States,” and sought to expand federal jurisdiction over certain water sources. The new rule was set to go into effect on August 28, 2015. Due to the implications and potential effect the rule may have on private and public interests, numerous lawsuits were filed challenging the regulation. Primarily, a lawsuit was filed in the Federal District Court of North Dakota, wherein thirteen states joined the lawsuit seeking to enjoin the rule’s implementation. On August 27, 2015, the North Dakota District Court issued an order granting the request for a preliminary injunction.

The thirteen states involved in the lawsuit include Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming. The EPA released a statement stating that “[u]nder the order issued by the District Court of North Dakota, the parties that obtained the preliminary injunction are not subject to the new rule, and instead continue to be subject to the prior regulation.” Therefore, until the Court rules on the issue, the EPA considers the injunction a bar to implementation of rule in Nevada, and the other thirteen states involved in the case.

For Nevada Governor Brian Sandoval’s response, please visit http://gov.nv.gov/News-and-Media/Press/2015/Sandoval-Encouraged-by-District-Court-Granting-Nevada_s-Request-for-Injunction/.

On August 27, 2015, the USDA unveiled a new plan to help conserve sage grouse habitat, and which many hope will keep the greater sage grouse from being listed under the Endangered Species Act. Agriculture Secretary Tom Vislack announced a four-year plan that will invest $211 Million in conservation funds to help build and preserve sage grouse habitat.

Vislack stated in the press release: “The Sage Grouse Initiative has proven itself as a model for how wildlife and agriculture can coexist and thrive in harmony, and that is why we are announcing steps today that will expand this important initiative throughout the life of the 2014 Farm Bill. I applaud America’s ranchers for their initiative in improving habitats and outcomes for sage grouse and other wildlife, and for their recognition that these efforts are also good for cattle, good for ranching operations, and good for America’s rural economy.”

Earlier this year, the bi-state sage grouse (related to the greater sage grouse) was determined to not require listing under the Endangered Species Act, due in large part to conservation efforts. With further conservation and a collaborative approach, those working in both wildlife and in agriculture can work to keep the  greater sage grouse off the listing as well, and avoid the damaging result such a listing would have on the farming and ranching community.

For the full press release, please visit http://www.usda.gov/wps/portal/usda/usdahome?contentid=2015/08/0238.xml&contentidonly=true.

During the 2015 Nevada Legislative Session, Assembly Bill 435 passed by the Legislature.  On May 27, 2015, AB 435 was signed into law by Governor Sandoval. This bill adds a new Judicial District to Nevada, and reorganizes the counties which make up certain Judicial Districts. The Sixth Judicial District Court, currently encompassing Pershing, Humboldt, and Lander Counties, will now only encompass Humboldt County. Lander and Pershing Counties, along with Mineral County (being pulled away from the Fifth Judicial District) will become the new Eleventh Judicial District. Judge Shirley, currently the Department 1 Judge in the Sixth Judicial District, will preside over the Eleventh Judicial District, and Judge Montero, currently the Department 2 Judge in the Sixth Judicial District Court, will preside over the Sixth Judicial District.

While the reorganization of the Judicial Districts will not make a difference to many, it does call into question which Court will preside over the Humboldt River Decree. The Humboldt River Decree is governed by Department 1 of the Sixth Judicial District Court of Humboldt County, currently Judge Shirley. Due to the shift in districts, this left an unknown as to whether the Decree jurisdiction would remain with Judge Shirley, or be moved over to Judge Montero. Assembly Bill 435 was updated to specifically address this issue. The new law provides that cases falling under the jurisdiction of the Humboldt River Decree Court will alternate between the Sixth and Eleventh Judicial Districts, and between Judge Shirley and Judge Montero. This greatly changes the dynamic of how Decree cases will now be handled.

The new law does not provide how alternating case assignment will be carried out, nor does it state how it is determined which cases are “arising from or relating to the administration of the Humboldt River Decree.” In the meantime,  we know that the Humboldt River Decree Court will shift once this new law goes into effect on July 1, 2015. If you’d like to read the new law as enacted, it can be found at https://www.leg.state.nv.us/Session/78th2015/Bills/AB/AB435_EN.pdf.

The April issue of Nevada Lawyer Magazine focuses on Agriculture Law. Matthew Curti, along with attorney Linda Bullen, authored an article about the importance of submitting comments to Environmental Protection Agency (EPA) rulemaking, as well as National Environmental Policy Act (NEPA) draft Environmental Impact Statements (EIS). The article provides an overview of the commenting process, and also provides tips for writing effective comments.

For the full article, visit http://nvbar.org/articles/sites/default/files/NevLawyer_April_2015_AG_Client.pdf

On February 3, 2015, the Nevada State Engineer issued Order 1250 curtailing 50% of all supplemental groundwater pumping for irrigation in both Mason and Smith Valleys. This action by the Nevada State Engineer was the first time curtailment of this magnitude has taken place in Nevada. Order 1250 determined supplemental groundwater use for irrigation to be a non-preferred use of water. Accordingly, the State Engineer proceeded to “tag” all supplemental irrigation wells identifying those subject to curtailment.

On March 4, 2015, a group of local water users (“Farmers Against Curtailment Order, LLC”) filed a Petition for Judicial Review challenging the State Engineer’s Order.  On March 9^th, the group moved for a preliminary injunction seeking to stop the Order from going into effect. District Court Judge Leon Aberasturi, after hearing argument on the injunction, granted the temporary injunction upon a finding that irreparable harm will occur to the farmers in Mason and Smith Valleys if the curtailment took place as written. The Judge stated that he intends to move this case along to its final ruling as quickly as possible.

For more information on this issue, please visit http://www.rgj.com/story/news/local/mason-valley/2015/04/03/judge-grants-injunction-curtailment/25243335/.

On March 27^th, 2015, California Governor Edmund G. Brown signed into law a $1 Billion emergency drought package. The emergency legislation (AB 91 and 92) provides funding for drought relief as well as to critical water projects in the state. Governor Brown states that “[t]his funding is just one piece of [a] much larger effort to help those most impacted by the drought and prepare the state for an uncertain future.” The bill will offer money for emergency food aid, drinking water, water recycling, conservation awareness, water system modeling, species tracking, and infrastructure and flood protection funding, to name a few.

The full text of AB 91 and 92 can be found at http://leginfo.legislature.ca.gov/.

This all comes just weeks after the California State Water Resource Control Board (“Board”) expanded its Emergency Water Conservation Regulations. The Board now prohibits certain potable water uses such as washing down driveways, and washing a motor vehicle with a hose not equipped with a “shut-off nozzle”, and commercial changes such as restaurants only providing water upon request. (A list of all changes to these regulations, can be found at http://www.swrcb.ca.gov/). Local agencies are able to fine property owners up to $500 a day for failure to implement conservation requirements of the Board.

More information about ongoing action in California pertaining to the drought can be found at http://ca.gov/drought/.

The 2015 legislative session is underway, and on the docket are two Bill Draft Requests (“BDRs”) related to water rights and water resource management. While these BDRs are likely to change significantly throughout the legislative session, below is a brief summary of their contents.

Senate Bill 65 (SB65) proposes changes to the procedure for adjudicating vested water rights in Nevada, as well as revising law related to applications, permits and certificates. The bill draft also revises rules relating to groundwater withdrawals in certain areas. The following may be sections of interest:

• Sections 4, 67, and 75 redefine what constitutes “wasting” water in the state.
• Sections 5-8 and 12-44 are new provisions governing adjudications of vested rights.
• Section 13 adds requirements that the State Engineer set forth the date when proofs of appropriation under a vested claim are to be submitted, and also requires notice to persons who are known to claim rights to a source.
• Section 18 changes rules regarding the order of determination of relative rights during an adjudication, and authorizes the State Engineer to post the order online in lieu of sending a paper copy to each claimant.
• Section 20 states that a hearing on objections to the a preliminary order of determination be held within 60 days after the order is issued, and hearings on such orders are now to be reported by a court reporter.
• Section 32 adds provisions allowing the State Engineer to require water rotation under an adjudicated system.
• Sections 9 and 45-63 amend provisions relating to water right applications, permits, and certificates, and requires to State Engineer to quantify the amount of water put to beneficial use under a certificate.
• Section 54 provides requirements for submitting evidence of good faith diligence in putting water to beneficial use, and allows the State Engineer to deny an extension in an area designated as an active management area or critical management area.
• Section 60 sets a hard deadline for when one must petition the State Engineer to review a permit or certificate cancellation decision.
• Section 64 increases fees before the State Engineer.
• Section 73 requires a person wishing to appropriate groundwater to prove that wildlife interests in springs are protected.

Senate Bill 81 (SB 81) revises provisions relating to the designation and regulation of groundwater basins by the State Engineer and creates and updates provisions for the establishment of “Active Management Areas” and “Critical Groundwater Areas.” The following are sections of interest:

• Section 3 establishes the criteria to establish an active management areas.
• Section 4 creates additional powers the State Engineer can use to more effectively manage active management areas.
• Section 8 further updates rules relating to critical groundwater areas and the signature requirements to petition for such a designation.
• Section 9 adds, as a consideration for granting an extension to put water to beneficial use, active management area designation.

The above is a summary of the primary changes to water law being contemplated at this year’s legislative session.  However, there may be additional issues that may be of individual interest. You can visit the Nevada Legislature website at http://www.leg.state.nv.us/ and review the BDRs in their entirety. Both of these bills have already been heard in the Senate Government Affairs Committees.