The Nevada Supreme Court has ruled that the cancellation and later reinstatement of a permit modifying an entity's prestatutory vested water rights cannot result in the entity losing its priority to use that water-despite a seemingly contrary statutory provision that strips an entity of its priority upon the cancellation of a water-use modification permit. This case arose when one owner of water rights challenged the Nevada state engineer's reinstatement of the permit of another water rights owner-a permit that allowed the owner to modify water use. The state engineer upheld the permit holder's priority under a Nevada statute. The water rights to Ash Canyon Creek were originally apportioned in 1885 by a Nevada district court, on an equal priority basis, to the predecessors in interest of the Anderson Family Associates (AFA) and Carson City, Nev. In 2000, the Nevada state engineer stated (in response to an inquiry letter from Carson City) that AFA owned a 29.872% interest in the creek's flow and that Carson City's interest was 60.608%.
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