The Committee on Natural Resources, Agriculture, and Mining was called to order at 1:36 p.m., on Wednesday, February 24, 1999. Chairman Marcia de Braga presided in Room 3161 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mrs. Marcia de Braga, Chairman

Mrs. Gene Segerblom, Vice Chairman

Mr. Douglas Bache

Mr. John Carpenter

Mr. Jerry Claborn

Mr. Lynn Hettrick

Mr. David Humke

Mr. John Jay Lee

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Genie Ohrenschall

COMMITTEE MEMBERS ABSENT:

Mr. John Marvel (Excused)

Ms. Bonnie Parnell (Excused)

GUEST LEGISLATORS PRESENT:

Senator Mike McGinness, Central Nevada Senatorial District

Senator Mark Amodei, Capital Senatorial District

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

After roll was called, the Chairman called for a motion to approve committee minutes February 3, 8, 10, 15, and 23, and floor meeting February 19, 1999.

Alan Coyner, Administrator of Division of Minerals, was called upon to give a presentation on his agency. Mr. Coyner explained the agency was established in 1943 as an advisory mining board. In 1983 the agency was made a department by Nevada Revised Statutes (NRS) 513 from the Board of Oil, Gas and Mining, which was part of the Department of Conservation and Natural Resources. In 1993, the agency was converted to a division under Department of Business and Industry. Mr. Coyner was the third administrator of the Division of Minerals.

Mr. Coyner pointed out the agency was funded entirely through statutory and regulatory fees from the mining industry. He said the mission of the division was to administer programs and activities to promote, advance, and protect mining and the development and production of petroleum and geothermal resources. Mining was a very important industry in the state because there were very few states in the nation that possessed such a great amount of mineral endowment as Nevada. It was the third largest gold producer in the world, and after gold production statistics for 1998 were received, Nevada might move into second position. Nevada had a Commission on Mineral Resources, created by NRS 513 in 1993, and comprised of seven members. Of those seven members, six were from the mining industry and one was from the public. They represented large-scale mining, small-scale mining, mineral resource exploration, the oil and gas industry, and geothermal development. The Commission on Mineral Resources was responsible for setting policy for the Division of Minerals and directly advised the governor and the legislature. It adopted regulations necessary to carry out the duties of the division, including setting regulatory and administrative fees.

Mr. Coyner explained there were four main administrative areas required of Division of Minerals by statute. Those were as follows:

• Industry relations and public affairs, including cooperation with Nevada Division of Environmental Protection (NDEP).
• Regulation of oil, gas, and geothermal drilling activities and well operations.
• Abandoned mine lands.
• State reclamation bond pool, which helped provide opportunities for smaller operations in working through the bonding process required by state regulations.

Another important function of Division of Minerals was mineral education throughout the state. The division’s educational program was receiving national acclaim and was considered the most successful mineral education program in the United States. Division of Minerals gave over 100 presentations in classrooms annually, as well as sponsoring teacher workshops. The educational effort led to a number of products, including mineral education brochures, and a four-part video production, "Project Mines." The series was a successful effort by Paul Iverson, former Deputy Administrator of Division of Minerals and Walt Lombardo from the Las Vegas office. The agency also cooperated with the Attorney General’s Office and the Nevada Bureau of Mines and Geology (NBMG) on investigating and prosecuting mining fraud, which was a prevalent problem in the state. Division of Minerals and NBMG had a reciprocal publishing effort, and Mr. Coyner served on that advisory board.

Mr. Coyner said his agency had a web site on the internet, and published two major publications every year. Those were "The Major Mines of Nevada" and "Exploration Survey." He concluded the Division of Minerals intended to continue conducting activities that would further the development and

production of the state’s mineral resource industries and benefit the people of Nevada. The presentation was accompanied by a computer generated powerpoint visual production. Mr. Coyner’s entire testimony was included in Exhibit C.

Mr. Neighbors commented oil production in northern Trap Springs in 1996 was the largest single producer in the United States, producing 4,000 barrels a day. Production was increased by a second well in the area, bringing production to over 6,000 barrels daily. Due to the price of oil dropping radically in recent years, the area had experienced hard economic times. He asked if Division of Minerals was planning on filling in old mining shafts throughout the state. Mr. Coyner said it was cost-effective to fence off the abandoned mines, and filling in old mining shafts left areas unstable and subject to further cave-ins.

Mr. Neighbors asked if back-filling shafts led to concerns over the destruction of bat habitats in the old mining shafts. Mr. Coyner replied in the affirmative, adding his agency performed bat surveys to determine bat populations before initiating old mine closures. Installation of specifically designed bat gates had become a common procedure, which ensured the bats could enter the shafts while securing the openings.

Mr. Neighbors said he had been informed the permitting process took approximately 4-years from the time a gold nugget was found until a person or company could stake a gold mining claim. Mr. Coyner concurred, stating it took between 3 and 5-years to finalize those claims. He said his agency assisted in the permitting process.

Mr. Bache commended Division of Minerals for its mineral education program. He said, in his primary profession as a teacher, he had taken the class in Las Vegas and found it to be very informative and beneficial.

Chairman de Braga asked if there were any more questions for Mr. Coyner, and there being none, opened the hearing on A.B. 197.

Vice Chairman Segerblom assumed control of the meeting due to Mrs. de Braga appearing before the committee to offer testimony on the measure.

Mrs. de Braga spoke in favor of the measure. She explained the intent of the proposed legislation was to allow Churchill County to be added to the Carson Subconservancy Water District. The district was composed of Douglas, Lyon, Storey, and Carson Counties. Churchill County warranted a position on the commission because it received water from the Carson River System. The proposed legislation did two important things, the Chairman explained. First, the measure added Churchill County to the commission, and secondly, it increased the daily pay, or per diem, of members who attended commission meetings, which would be increased from $25 to $80. That was a standard daily pay rate for commissioners in Nevada. The revised per diem allowance would affect not only the Carson Water Subconservancy District (CWSD) but also Carson Tahoe Water Subconservancy and any irrigation districts throughout the state that wanted to increase their members’ rate of pay.

Chairman de Braga said there was another good reason for including Churchill County as part of the CWSD. Aside from the fact the county was an end-user of water from that system, including Churchill County in the district would give representation to all entities involved, a crucial point in the decision making process of the Subconservancy.

The Chairman pointed out the measure interchangeably referred to per diem pay and per day pay. She suggested using the term per diem consistently throughout the measure in order to eliminate any possibility of confusion.

Ms. Ohrenschall commented the discrepancy between per diem and per day meant the same thing and would not hold up the measure. She explained the issue would be resolved in the final "clean-up" process before the measure was finalized.

The next person to speak in favor of A.B. 197 was Alan Kalt, Comptroller of Churchill County. He explained the measure to include Churchill County into CWSD was a natural progression because it was included in the Carson River watershed. The proposed legislation would ensure all involved entities an active roll in CWSD activities.

Mrs. de Braga stated the measure was originally requested by Senator Adler who was not re-elected. In the original bill, he called for two members from each of the five counties involved in the Subconservancy District. Presently, Douglas County had five members on the board, with the other counties having two members each. She explained she had discussed the situation with Senator Amodei and Speaker Dini, as well as members of the CWSD, and all had agreed it was not necessary that the measure insist on equal representation on the Subconservancy Board. The measure was changed back to the original organization of the board’s membership, which was five members from Douglas County and two for each of the other counties. She said she considered that a justifiable request, and all concerned parties were in favor of the arrangement.

Vice Chairman Segerblom asked if the measure in its current form was correct. Mrs. de Braga responded in the affirmative.

Senators Amodei and McGinness both expressed support of the measure, agreeing with Alan Kalt the inclusion of Churchill County in CWSD was a natural and necessary progression.

Edwin James, Commissioner of CWSD, spoke in support of A.B. 197. He presented the committee with a handout from Churchill County Commissioners entitled "Information for Legislative Consideration Regarding A.B. 197: Churchill County Joining the Carson Water Subconservancy District" (Exhibit D). He stressed the importance of understanding the nature of water, which was that all occurrences up-stream affected the quality of water downstream. He reminded the committee water from the Carson River system ended up in Churchill County, making that county’s involvement in the process all the more important. It was extremely important to develop substantial watershed plans to manage water, particularly in Nevada where there was a limited amount of the vital resource.

Bob Milz, Chairman of the Subconservancy Board and Lyon County Commissioner, was the next speaker to testify in support of the proposed legislation. He said the decision to include Churchill County in CWSD was unanimous among all commissioners on the Subconservancy Board. He said the measure reflected the present composition of the board, and all commissioners unanimously supported the current arrangement.

Chairman de Braga asked Mr. Milz if the board had considered including Alpine County, California in CWSD because it was the headwaters of the Carson River. Mr. Milz said CWSD commissioners were actively discussing that possibility with Alpine County. He said an interstate agreement would have to be developed to provide for the inclusion of Alpine County into the Subconservancy.

Kelly Kite, Douglas County Commissioner and CWSD board member, was the next to speak in favor of the measure. Douglas County commissioners unanimously supported including Churchill County in the Subconservancy. He urged the committee to vote in support of the proposed legislation.

Dan Kaffer, Coordinator for Western Nevada Resource Conservation and Development Council (RC&D), spoke in support of A.B. 197. He explained his agency encompassed six western counties of the state, eight conservation districts, two Native American tribes, and three water districts on its board of directors, all of whom unanimously supported the inclusion of Churchill County in CWSD. RC&D also supported the efforts of all entities included in the Carson River watershed who were actively working on watershed planning issues.

Bernie Curtis, Vice Chairman of the CWSD and Douglas County Commissioner, explained he supported the measure for the same reasons previously described.

Andre Aldax was the next to speak in favor of the measure. He explained he was the Agricultural Representative of CWSD, a member of the Subconservancy Board, and Chairman of the Carson Truckee Water Conservancy District. He said his support of A.B. 197 reflected the unanimous approval of those agencies for the annexation of Churchill County into CWSD.

Mary Walker, representing Carson City, Lyon, and Douglas Counties, was the final speaker to testify in support of the proposed legislation. She said those entities had also agreed unanimously to bring Churchill County into CWSD. It was a way to more comprehensively manage the Carson River for both upstream and downstream users. She pointed out CWSD was a successful multi-jurisdictional cooperative venture, which considered the inclusion of Churchill County a natural progression.

The Chairman asked if there were any more questions or comments regarding the measure. There were none.

The Chairman closed the hearing on A.B. 197. She explained A.B. 206 would be rescheduled for a later time, and A.B. 103 would be placed on the agenda for a work session following week. She called for a report from the subcommittee on A.B. 41, which was chaired by Assemblyman Mortenson.

Mr. Mortenson told the committee A.B. 41 had met in subcommittee early in the week, and had accepted two amendments to the measure. He said he expected the proposed amended legislation would be scheduled for a committee work session in the near future.

The Chairman opened the hearing on A.B. 134.

Chairman de Braga called upon Galen Denio, Supervisor of the Drinking Water State Revolving Fund Program of the Nevada State Health Division, to offer testimony on the proposed legislation. She asked Mr. Denio if there was any flexibility in the measure, or any control the committee could exercise, which would allow local input and modification. Mr. Denio explained there was no flexibility in the proposed legislation. If the legislature did not pass the measure, the State of Nevada Drinking Water Revolving Fund Program would lose up to 40 percent of its funding, which amounted to approximately $3 million annually until the year 2003 when the federal allocation and appropriation was discontinued. Mr. Denio’s testimony was included in its entirety along with a brief history of Nevada’s drinking water regulations in Exhibit E.

Mr. Neighbors asked if the language of the proposed legislation was the same as the federal legislation, and were other states required to use the same language. Mr. Denio explained the language, particularly in the definition section of the measure, was directly from federal regulations of the Safe Drinking Water Act. The uniform language was provided to ensure consistency throughout the law.

The Chairman called for a motion.

Mr. Carpenter requested the record show he voted against A.B. 134, citing as his reason the fact the measure contained too much bureaucracy and regulation, and did not allow enough input from Nevada.

Chairman de Braga provided the committee with two Senate Concurrent Resolutions from Kansas (Exhibit F), urging the Secretary of the United States Department of Agriculture to provide greater opportunities to farmers throughout the country by encouraging export enhancement programs and by removing strict trade sanctions on agricultural products. She requested committee members to review the handouts and be prepared to discuss the possibility of writing a similar resolution to Congress from the State of Nevada in support of agriculture.

There being no further business before the committee, the meeting was adjourned at 2:45 p.m.

RESPECTFULLY SUBMITTED:

Sharon Spencer,

Committee Secretary

APPROVED BY:

Assemblywoman Marcia de Braga, Chairman

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