MINUTES OF THE
SENATE COMMITTEE ON NATURAL RESOURCES
Sixty-seventh Session
May 12, 1993
The Senate Committee on Natural Resources was called to order by Chairman R. Hal Smith, at 8:44 a.m., on Wednesday, May 12, 1993, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda. Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Senator R. Hal Smith, Chairman
Senator Dean A. Rhoads, Vice Chairman
Senator Ernest E. Adler
Senator Thomas J. Hickey
Senator Mark A. James
Senator Dina Titus
COMMITTEE MEMBERS ABSENT:
Senator Joseph M. Neal, Jr.
STAFF MEMBERS PRESENT:
Caren Jenkins, Senior Research Analyst
Rayanne Francis, Senate Committee Secretary
OTHERS PRESENT:
Lisa A. Foster, Lobbyist, City of Sparks
Colonel William J. Yukish, Chief, Highway Patrol Division,
Nevada Department of Motor Vehicles and Public Safety
Daryl E. Capurro, Lobbyist, Managing Director, Nevada Motor
Transport Association
Stan Warren, Lobbyist
SENATE BILL 424: Authorizes state environmental commission to require use of certain additives for vehicles which operate using diesel fuel.
Chairman Smith opened the hearing and remarked he had recently received a note from Senator Lori Lipman Brown informing him that Senate Bill (S.B.) 424 was being withdrawn from further consideration. He explained she had requested that the Senate Committee on Natural Resources indefinitely postpone this bill.
SENATOR HICKEY MOVED TO INDEFINITELY POSTPONE S.B. 424.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND TITUS WERE ABSENT FOR THE VOTE.)
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Senator Adler informed members of the committee that the bill drafting advisers had requested he pass along the following information. He continued by saying if members have bill draft requests (BDRs) that they do not intend to introduce, please turn them in. This gives staff an opportunity to re-catalog all of the remaining BDRs and prevent possible conflicts with existing bills.
SENATE JOINT
RESOLUTION (S.J.R.) 18:Urges United States Fish and Wildlife Service, Secretary of Agriculture and Secretary of Interior to expedite recovery plan for Lahontan cutthroat trout in Nevada.
Chairman Smith drew attention to an amendment to S.J.R. 18 provided to members of the committee. He requested that members review the amendment as he intended to call for a vote on the matter.
Senator Rhoads mentioned the Assembly Committee on Natural Resources and Mining had added language which improved upon the version passed out of the senate.
SENATOR RHOADS MOVED TO CONCUR IN THE AMENDMENT TO S.J.R. 18.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND TITUS WERE ABSENT FOR THE VOTE.)
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SENATE BILL 123: Revises provisions for issuance of duplicate tags for hunting.
Chairman Smith drew attention to an amendment which had been provided to members of the committee. He requested that members review the amendment as he intended to call for a vote on the matter.
Chairman Smith pointed out Fred Wright, Lobbyist, Coalition for Nevada's Wildlife, had recently pointed out several items which should have been corrected before passing out of the senate. Chairman Smith stated Mr. Wright had requested that the Senate Committee on Natural Resources refer S.B. 123 to a conference committee.
SENATOR RHOADS MOVED TO NOT CONCUR IN THE AMENDMENT TO S.B. 123 AND REFER THE BILL TO A CONFERENCE COMMITTEE.
SENATOR ADLER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATORS NEAL AND TITUS WERE ABSENT FOR THE VOTE.)
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Chairman Smith opened the hearing on Assembly Bill (A.B.) 122.
ASSEMBLY BILL 122: Expands costs for which money may be expended and recovered regarding response to accident involving hazardous material.
Lisa A. Foster, Lobbyist, City of Sparks, introduced herself to members of the committee and remarked that she supported passage of A.B. 122.
ASSEMBLY CONCURRENT
RESOLUTION (A.C.R.) 79
OF THE SIXTY-SIXTH SESSION: Directs Legislative Commission to conduct interim study of laws relating to emergencies involving hazardous materials.
Ms. Foster pointed out the City of Sparks Fire Chief had been involved in the interim study, set forth by A.C.R. 79 of the Sixty-sixth Session. She said A.B. 122 was the most important piece of legislation to come from that interim study.
Ms. Foster explained this issue was very important to the City of Sparks, due to the fact that quite a few of the industries located in the area utilize hazardous materials in their processes. Additionally, it is not an uncommon occurrence for hazardous materials to be transported through Sparks, resulting in a significant number of spills.
Ms. Foster testified the original version of A.B. 122 allowed the City of Sparks to recover all of the costs associated with cleaning up a hazardous materials spill (including police costs). She explained A.B. 122, in its current form, restricted cost recovery to only those associated with mitigating the spill. Up to this point, Ms. Foster explained, the City of Sparks had been fairly successful in recovering the costs of cleaning up hazardous materials spills. She drew attention to the fact A.B. 122 would be very helpful in establishing clear guidelines for private companies and government agencies.
Ms. Foster concluded her testimony by asserting the City of Sparks supports passage of A.B. 122 in its current form.
Senator Rhoads asked Ms. Foster where the money came from when the City of Sparks had to clean up a hazardous materials spill. Ms. Foster replied by saying the City of Sparks billed the company responsible for the spill. She continued by saying it could, sometimes, take quite a while to recover the cleanup costs. She said there have been times when the City of Sparks was not able to recover any of the cleanup costs.
When the City of Sparks was unable to recover any cleanup costs, Senator Rhoads wondered how the city could possibly absorb the associated expenses. Ms. Foster replied the cities of Reno and Sparks, as well as Washoe County, had formed a consolidated hazardous materials (haz-mat) team specializing in hazardous materials spills.
Senator Rhoads stressed A.B. 122 would affect all other cities, counties and government entities. He asked Ms. Foster if the Nevada Association of Counties (NACO) or the Nevada League of Cities (NLC) had expressed their feelings about A.B. 122. Ms. Foster replied she had spoken with a representative of the NLC earlier in the day, who had indicated that their association had not been involved in the development of A.B. 122. However, the cities of Reno and Sparks had been involved. Senator Adler pointed out Carson City, Lyon and Storey Counties support passage of A.B. 122.
Colonel William J. Yukish, Chief, Highway Patrol Division (NHP), Nevada Department of Motor Vehicles and Public Safety, introduced himself to members of the committee. Based upon his very brief review of the bill, he stated A.B. 122 would assist the Nevada Highway Patrol (NHP) in recovering the costs of cleaning up hazardous materials spills. He concluded his testimony by saying the language contained in the bill appeared to be very well thought out and supported passage of A.B. 122.
Daryl E. Capurro, Lobbyist, Managing Director, Nevada Motor Transport Association, introduced himself to members of the committee. He stated the association supports passage of A.B. 122 in its present form.
Senator James wondered how A.B. 122 would assist a private business or government agency in recovering the costs of cleaning up someone else's spill. He briefly summarized the highlights of the bill and voiced his concerns, which centered on the determination of whether the costs of decontamination were reasonably incurred. He asked if some kind of method was being utilized, not currently in statute, setting forth procedures for making this type of a determination in order to reduce possible litigation.
Colonel Yukish responded to Senator James's earlier question by explaining that a majority of the carriers who transport hazardous materials and operate in the State of Nevada already have mitigation plans in place to deal with emergency spills. He continued by saying the normal procedure would be to involve representatives of the Emergency Response Commission, the local fire department and the NHP's haz-mat experts, in addition to the company responsible for transporting the hazardous materials involved in the spill. Upon the arrival of these individuals, a mitigation assessment was conducted and a plan formulated to cleanup the spill. Colonel Yukish said this mitigation assessment would take into consideration the most cost-effective method of cleanup, as well as public safety issues.
Colonel Yukish pointed out A.B. 122 addressed situations where a transport company does not have a mitigation plan in place for emergency spills. He continued by saying there have been instances where a company may be close to bankruptcy, or even operating illegally. Immediately after a spill, he said the NHP would attempt to contact the transport company. If the NHP is unable to establish some kind of communication link, or the company does not respond to requests for assistance, Colonel Yukish explained a private company offering expert assistance would be asked to assist in the cleanup. Normally, this private company wants the assurance that it will be reimbursed for its services. Senator James stated this answered his question and was satisfied as long as this was part of the hearing's permanent record.
Colonel Yukish assured members of the committee that the NHP attempts to reach the transport company as soon as possible. He estimated that at least 90 percent of the companies the NHP has contacted have mitigation plans in place. Quite often, these companies have flown their mitigation experts into the area where the spill occurred. Colonel Yukish stated the remaining 10 percent either do not have mitigation plans or sufficient insurance to deal with the costs of cleaning up a spill.
Senator Hickey said he had questions about how responding to an accident coincided with cleaning and decontamination. He continued by saying A.B. 122 deleted subsections 3 through 5, of section 5, from statute. These subsections addressed the aftermath of an accident and any administrative penalties for failing to reimburse the account for the management of hazardous waste. While A.B. 122 was being discussed by the Assembly Committee on Natural Resources, Agriculture and Mining, Ms. Foster stated several companies had opposed the broad definition contained in statute. Specifically, their concerns focused on being required to pay for costs which were not just. For instance, a couple of good examples would be costs associated with fighting a fire caused by the spill, or those incurred by police officers who secure and manage the spill site.
Ms. Foster remarked A.B. 122 had been amended by the Assembly Committee on Natural Resources, Agriculture and Mining to ensure that the only recoverable costs would be those affiliated with going to the scene of the spill, investigating the problem and cleaning up the hazardous material.
Senator Hickey inquired what portion of the bill expanded the costs of cleaning up a spill. Ms. Foster replied the term "responding" was defined in section 2, subsection 4(b) and section 3, subsection 2 of A.B. 122. She continued by saying current language contained in the bill limits the recoverable costs to only those directly related to the hazardous materials spill. Senator Hickey noticed natural gas has been exempted from the bill. Ms. Foster replied this was correct.
Senator Rhoads noticed some very interesting language contained in section 8, subsection 2. He asked Colonel Yukish if there have been very many instances where the state of local government had not been reimbursed for cleaning up a spill. Colonel Yukish responded by saying the only instance that he recalled had involved a trucking company that was uninsured and had gone out of business before the cleanup costs had been recovered. Senator Rhoads asked if the NHP had been responsible for absorbing the loss. Colonel Yukish commented the NHP had written a letter to the State Emergency Response Commission (SERC) asking for compensation from the hazardous materials fund. He commented the SERC, subsequently, agreed to the NHP's request and refunded the costs for cleaning up the spill.
Senator Rhoads wondered if the inclusion of the language contained in section 8, subsection 2 would result in companies becoming much more relaxed about reimbursing the state agency. Colonel Yukish explained the attorney general would have the authority to seize the companies' assets in an attempt to recover all or a portion of the cleanup costs.
Senator James wondered why it was necessary to include the language contained in section 8, subsection 2 of A.B. 122. He assumed the state agency would have the right to appeal to the SERC for additional funding. Colonel Yukish said this verbiage allowed the state agency the authority to request that their funding request be placed on the agenda of the interim finance committee, instead of waiting for a regular session of the legislature. Senator James asked if this process needed to be set forth in statute. Colonel Yukish responded by saying the inclusion of this language would simplify the process.
Senator Hickey noticed the original penalty clause had been removed from A.B. 122. Ms. Foster assumed this clause had been eliminated as part of a compromise in the assembly. She said the cities were in favor of keeping the language contained within A.B. 122 as strong as possible. However, she said there was some concern about the fairness of the penalty process. Senator Hickey stated he felt a penalty should be levied against a company which had not paid recovery costs, because the city, county or state agency would be forced into litigation.
Stan Warren, Lobbyist, stood up in the audience and mentioned he supports passage of A.B. 122 in its present form.
Chairman Smith informed members of the committee it was his intention to refer A.B. 122 to an upcoming work session for further consideration. Senator Hickey said he merely wanted an explanation of why it would be unfair to levy a 5 percent penalty upon any company responsible for a hazardous materials spill in the State of Nevada.
After a quick review of A.B. 122, Senator Adler said he believed the fine and penalty clauses were contained in various sections of the bill. Senator Titus agreed with Senator Hickey's opinion that there should be a penalty for those entities responsible for hazardous materials spills. She recommended that a 5 percent penalty be imposed upon the total amount due, instead of 5 percent for each day beyond the 20 day grace period. Senator Hickey said this sounded like a reasonable arrangement.
Senator James said he would not have a problem with imposing a penalty as long as the individual responsible for the spill has the ability to challenge the cleanup expenditures. He suggested that a clause be amended into A.B. 122 stating, "unless the responsible person makes a bona fide challenge to the amount of reimbursement being demanded."
Senator Hickey stated he felt the amount of the penalty should be determined by the judge hearing the case. Senator James's point was well taken, but Senator Hickey insisted there should be a penalty. He continued by saying persons who refuse to pay reimbursement costs to the state or local government, or decide to enter into litigation on the total costs, should have a definite understanding that "the meter was running."
Senator Adler pointed out the 5 percent penalty had been deleted, but had amended language into section 2, subsection 3 allowing:
the attorney general shall initiate recovery by legal action of the amount of any unpaid reimbursement plus interest at a rate determined pursuant to [Nevada Revised Statutes] NRS 17.130 computed from the date of the incident.
Senator Adler explained this penalty clause would amount to the total unpaid reimbursement costs, plus interest, at the prime rate plus 2 (computed from the date of the incident). He interpreted that this penalty process would amount to a total of 9 percent, instead of 5 percent.
After reviewing this section of the bill, Senator James explained the language would allow the attorney general to initiate an action by asking for reimbursement, plus interest. He insisted the court would be allowed to do this in any case, and the court could decide how much the responsible person would have to pay.
Senator James pointed out deleted language contained in section 5, subsection (lines 15 through 18) states:
The director shall impose an administrative penalty...
Senator James suggested an amendment which would give the Department of Conservation and Natural Resources more discretion if the language were amended to read, "the director may impose an administrative penalty..." In other words, the penalty could be mitigated if there was good faith and reason why the responsible person has not reimbursed the cleanup costs. He explained this amended language would also allow the court to mitigate the penalty if the Department of Conservation and Natural Resources was opposed to it, and if the responsible person had a bona fide reason for not paying the reimbursement costs.
Considerable discussion ensued regarding the implications of the penalty clause contained in section 2, subsection 3 of A.B. 122. Chairman Smith reiterated that it was his intention to refer this bill to an upcoming work session for further consideration. He assigned A.B. 122 to a subcommittee consisting of Senators Hickey (chair), Adler and James. Senator Hickey asked Senators James and Adler if they would agree to a very informal meeting on the bill.
Mr. Capurro said he believed the reason why they changed the penalty from a flat rate to a floating rate, was based upon situations where insurance companies may become involved. Under the flat rate system, it might actually be more advantageous for the responsible person to not pay the bill if the total interest was below the current interest rate. With the floating rate system, the emphasis would be to pay the reimbursement costs in a timely manner.
Chairman Smith encouraged the subcommittee members to look into this matter in more detail.
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There being no further business before the Senate Committee on Natural Resources, Chairman Smith adjourned the hearing at 9:14 a.m.
RESPECTFULLY SUBMITTED:
Rayanne J. Francis,
Committee Secretary
APPROVED BY:
Senator R. Hal Smith, Chairman
DATE:
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Senate Committee on Natural Resources
May 12, 1993
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