On Monday, June 7, 1999, Nevada Governor Kenny Guinn signed AB 380 into law. Effective immediately, the bill offers water right owners of the Newlands Reclamation Project an opportunity they have never really had before, that is, the ability to sell water rights, up to a total of 6,500 acres, that they may no longer, for whatever reason, be able to use. It's not that water right owners couldn't have sold their water rights before, its just that every time they did, they would end up in a lawsuit with the Pyramid Lake Paiute Tribe and the United States Department of Justice.

The provisions of the bill relating to the purchase program, referred to as the "Newlands Project Water Right Fund," may not be of benefit to all water right owners, however. Careful consideration, and consultation with their attorneys, should be done by those people who are involved in a lawsuit, and particularly those in the transfer litigation, before they choose to participate in the program.

So who does it help? If you are an owner of a water right that does not receive an annual allocation, you may want to consider participating in the program. The first question on everyone's lips, however, is "How much will I get for it?" The language of the bill says "fair market value." But what is that? That question has yet to be answered. The Carson Water Subconservancy District (see related article) is the entity designated by the law to carry out the provisions of the program. CWSD is currently in the process of developing the guidelines for the program and obtaining the necessary appraisals for determining "fair market value" as required in the bill. Edwin James, General Manager of CWSD, has publicly expressed his desire to have the guidelines and rates in place by September of 1999. That task, as Mr. James is fully aware, is not as simple as it may seem to outside parties.

Besides the issue of price, there are many questions yet remaining unanswered. For example, how will operation and maintenance charges for the Truckee Carson Irrigation District be absorbed? The sudden loss of O & M payments on 6,500 acres of water rights could result in a loss to the District's budget of more than a half a million dollars a year. That budget deficit would have to be made up by the remaining water right owners. Studies show that water right owners are already paying more for their water in the Newlands Project than they can afford. What would happen if their water costs suddenly doubled or tripled? Negotiations on this vital issue are currently in progress.

Another concern: What effect, if any, will taking water rights off property have on underlying mortgages and lienholders? Are those mortgage companies and lienholders going to require individual appraisals? Will it trigger a provision in the Deed of Trust or Contract of Sale that requires full payment of the loan? These issues can only be addressed on a case by case basis. Who is going to do it? Will it be the CWSD? Who will pay the costs?

And speaking of costs, what will be the price tag for administering the program? Are there ways to cut those costs? What position will the U. S. Department of Justice take on AB 380? Will they agree to abide by the language of the law and not bring further lawsuits? Will the Pyramid Lake Tribe live up to its agreement to dismiss its lawsuits as water is sold into the plan? Are all water rights in the Newlands Project, except the Fallon Tribe's and the Navy's, to be included in the plan if the owners are willing sellers as stated in the law and the joint testimony agreement?

Obtaining the answers to these questions is not insurmountable, however, and NWPA truly admires the leadership demonstrated by Mr. James of CWSD in carefully taking all of these issues, and many others, into consideration in developing the guidelines to be used to implement the program. We recognize that CWSD certainly has its work cut out for them.

If you are interested in receiving further information regarding the development of the guidelines for implementing the program, please contact NWPA at (775) 423-7774 or via email to: jmills@newlands.org, to be added to a special mailing list that is being developed.