The Vidler Water Co., which is involved in a project to import water into Reno's North Valleys, is seeking to get a bill passed that would allow private companies and smaller counties to share in the profits of a water project.
The bill was characterized by its proponents as a way to allow strapped counties to develop valuable resources, and by at least one lawmaker as opening the door to wide-scale speculation and misappropriation of water.
The bill - Senate Bill 487 - stems from two deals Vidler has with Lincoln County to front the costs for developing and building a water system infrastructure for the county.
The agreements provide for the county to reimburse Vidler over time, then share in the profits once those initial costs are paid.
The bill would change current law, which, according to the state's former attorney general, does not allow such a project.
A year ago, then Nevada Attorney General Frankie Sue Del Papa, at the request of Clark County's district attorney, issued an opinion on the contracts.
"The agreements entered into between Lincoln County and Vidler have as their primary purpose development and purveying of water resources for profit," said Del Papa in an opinion.
"Because this purpose is not a predominantly public purpose, and the Legislature has not expressly authorized counties to engage in such an undertaking, we conclude that Lincoln County lacks authority to enter into the agreements and acted in excess of its authority when it did so."
Representatives from Vidler and Lincoln County argued before the Senate Government Affairs Committee last week that the only viable way for Lincoln to develop its water resources is in cooperation with a private company.
The southeastern county just north of Clark County comprises 98.2 percent federally- owned land.
Its population is 4,500.
The federal government gave to the county 13,000 acres through Lincoln County Land Act.
"The county has a very limited tax base," said Mark Fiorentino, an attorney representing Vidler and Lincoln County, testifying before the committee.
"It has been difficult at times to serve the population.
The key to that is economic growth and the key to economic growth is the development of water resources."
"Is there any guarantee that the water won't go somewhere else?," asked Sen.
Dina Titus (D-Clark County).
"The water we develop will be put to beneficial use in Lincoln County," said Tim Perkins, a Lincoln County commissioner.
"We don't want to sell it.
There was some controversy over our master plan about selling it to Clark County.
That was to give us options and to help our neighbors if they need help."
One neighbor looking for help testified in opposition to the bill.
"We are the fastest growing small city in the nation, and we made it on our own," said Michael Winters, general manager, Virgin Valley Water District in Mesquite.
Winters said Lincoln County rejected a proposal from Virgin Valley to help the county develop its water, opting instead to work with Vidler.
"We know one day we'll run out of water and need to go to our neighbors to the north for water," said Winters.
"We're very concerned with what will happen to water rates with a middleman."
Sen.Warren Hardy (R-Clark County) said he was concerned about more than that.
Speaking to the panel of proponents, Hardy said, "You're characterizing this as codifying in state law that which is current practice is not accurate.
This has sweeping effects on water law and the doctrine of prior appropriation." The bill's advocates disagreed.
"Nobody is interested in appropriating water and selling it to California or Arizona," said Fiorentino.
"This bill does not in any way change the existing law in respect to the appropriation of water.
That lies with the state engineer and will whether you pass this bill or not."
An attorney for Virgin Valley Water District said Vidler and Lincoln County could tie up the water and do as a water rights holder did in Amargossa Valley several years ago - never give the state engineer a straight answer about the use to which would the water would be used.
"We ended up denying all that," said Hugh Ricci, Nevada state engineer, outside the government affairs committee meeting.
"The legislature is very aware of speculation," said Ricci, "and that it is not a beneficial use."
