The Committee on Natural Resources, Agriculture, and Mining was called to order at 1:35 p.m., on Wednesday, March 3, 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

Ms. Bonnie Parnell

COMMITTEE MEMBERS ABSENT:

Mr. John Marvel (Excused)

GUEST LEGISLATORS PRESENT:

Senator Mike McGinness, Central Nevada Senatorial District

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

After roll was called, the Chairman announced her request that committee members inform her ahead of time if they planned on changing their vote on a measure when it reached the floor of the assembly. Also, Chairman de Braga requested all committee members inform her before floor session if they planned on changing their vote from committee.

The Chairman opened the hearing on A.B. 252.

Vice Chairman Segerblom introduced Chairman de Braga who was the first to testify on the proposed legislation. She explained A.B. 252 was a measure intended to mandate operating and maintenance charges continue to be paid to irrigation districts by the purchaser of parcels of land that had water rights removed. The intent of the legislation was to eliminate undue financial burdens on individuals who remained in irrigation districts after the transfer of ownership of land. The basic charges and requirements of irrigation districts remained the same despite ownership of land within the district changing. She pointed out if a great deal of land went out of production, and operating and maintenance charges were not continually paid, an unfair burden would be placed on those remaining in the irrigation district to pay the balance of those charges.

Chairman de Braga pointed out the only change she recommended would be in section 6, subsection a. The proposed amendment would change the word or to and on line 25.

Michael Turnipseed, State engineer, Division of Water Resources, was the next to speak in support of the proposed legislation. He said in the past his agency had received applications to change the place of use and manner of use in the Truckee Carson Irrigation District (TCID). He was bound by Nevada Revised Statute (NRS) 533.370 to deny an application if it decreased the efficiency within an irrigation district or increased the cost of water for other members of the district. It was, therefore, required that the Federal Government and the State of Nevada enter into a contract to pay operation and maintenance charges within the irrigation district. Presently, the cities of Reno and Sparks and the Federal Government had begun purchasing water rights on the Truckee Bench in an effort to keep water in the Truckee River for the benefit of water quality, and stream flows. The arrangement would result in an increased supply of water to Walker Lake.

Mr. Turnipseed explained A.B. 252 would compel landowners to ensure the purchaser of the water would enter into a contract to continue to pay operation and maintenance charges before an individual sold the water rights separate from the sale of the land. The arrangement would ensure the water stayed in the Truckee River. He said he would prefer it if the arrangement changed the use of the water from irrigation water to improvement of in-stream flow and water quality. He urged the committee to support the measure.

The Chairman asked Mr. Turnipseed to explain what was meant by the Truckee Bench. He explained the Carson Division of TCID received its water from 2 sources. Lahontan Dam was on the Truckee River and supplemented by diversion from the Truckee River since 1908. The arrangement was a complex maize of litigations and stipulations regarding the specific amount of water allowed to be taken out of the Truckee River versus how much water had to remain for the benefit of endangered species habitating in the river. The United States Congress claimed it could not obligate future Congresses to pay for continued operation and maintenance of water rights remaining separate from the sale of the land. The position of Nevada Division of Water Resources was no water would be delivered without payment.

Mrs. Segerblom asked if it was possible to claim water rights if it could be proved the water had not been used. Mr. Turnipseed said presently there was a great deal of litigation pending to determine the answer to that question. In the past the State of Nevada had never sought forfeiture of surface water rights for non-use and in only 2 cases had the state ever sought abandonment of surface water rights. Case law revealed a very clear distinction between forfeiture and abandonment. Recent federal court case law placed more weight on statutory law than case law from Nevada Supreme Court in deciding issues of water rights forfeiture and abandonment. As case law was currently applied, if water rights had a priority date after 1913, those water rights could be subject to forfeiture for 5-years of non-use.

Mr. Humke asked Mr. Turnipseed to describe the difference between forfeiture and abandonment. Mr. Turnipseed explained forfeiture, as defined by case law of the Nevada Supreme Court, was proof of 5-years of non-use and abandonment was proof of clear intent to abandon and forsake those water rights forever. If either of those possibilities were proved, those water rights would be returned to the public water domain and become subject to appropriation.

Mr. Neighbors asked for an explanation of how the proposed legislation would affect areas involved in strict water conservation efforts, which would result in less water being used by that particular region. Mr. Turnipseed said water conservation was an important issue with many aspects. There would be no effort to penalize entities for limiting their water use.

Mr. Claborn asked for clarification on the issue of water rights and land being sold separately. Mr. Turnipseed stated Nevada law revealed a clear distinction between ownership of water rights and actual ownership of the water. In Nevada individuals or entities were only granted the right to use the water, but not to actually own the water, and water rights were traded and sold. Nevada water law stated all water above and below the ground belonged to the public.

Mr. Turnipseed concluded his testimony by stating the proposed amendment suggested by Chairman de Braga to exchange the word and for the word or would clarify the intent of the proposed legislation. It was essential in Nevada to have the approval of the state engineer before transfers or changes were made to water rights.

Michael Mackedon, Fallon City Attorney, was the next to speak in support of A.B. 252. He explained he agreed with the Chairman regarding the word change described above. If the proposed legislation was approved, the relationship between the water and the land to which the water right was appurtenant would be severed. A buyer could purchase the right to use the water subject to the contracts made between the State of Nevada and the Federal Government, and transfer the water to another place for another use. He said the measure would clarify present Nevada water rights law, which stated the duty to pay for the water followed the right to use the water and not ownership of the land on which the water originated. Without the clarifying authority of the proposed legislation the lien would remain with the land, continuing to burden the land, which would be counter productive. Mr. Mackedon’s testimony was contained in Exhibit C.

The Chairman asked if the purchaser of the water rights was the Federal Government and A.B. 252 was law, could it refuse to pay operation and maintenance charges. Mr. Mackedon said there had been cases in which the Federal Government had taken the position it would not pay those charges despite the law clearly stating the holder of the contract was required to pay them.

Mr. Claborn asked if only surface water would be affected by the proposed legislation. Mr. Mackedon responded in the affirmative, adding the measure applied specifically to surface water in irrigation districts.

Doug Busselman, Executive Vice President of the Nevada Farm Bureau (NFB), was the next proponent of the proposed legislation. He pointed out that for a long time the farmers and ranchers who were members of his organization had made substantial investments in their businesses in irrigated areas throughout the state. They were concerned about the financial abilities of their irrigation districts to maintain the ability to deliver water to those who wished to continue in their operations. A great deal of cooperation and investments went into building irrigation districts and to build a major infrastructure for the delivery of water for irrigation systems. It would be very difficult today to emulate the difficult task of building such an intricate and complex irrigation system as our predecessors had. The proposed legislation addressed the issue of responsibility in the distribution of the right to use water in Nevada and the ability to levy a shared fee for operation and maintenance charges for the good of the irrigation district.

Mr. Claborn asked if property owners would be required to sign contracts stating they would be responsible for maintaining irrigation infrastructure on their private property. Mr. Busselman responded in the affirmative, adding the proposed legislation dealt with the issue of cooperation of all members within an irrigation district working to provide and maintain the infrastructure for the delivery of the irrigation system. A.B. 252 specifically addressed the ability of the required charge to move with the water rights even if they moved off the land on which the water originated.

William Isaeff, Sparks Deputy City Manager, was the next to testify on the proposed legislation. He explained he represented one of the three entities that would be affected by A.B. 252, and which were involved in a program called the Water Quality Water Rights Purchase Program (WQWRPP). The Federal Government and three local governments were involved in the program. Those local governments were Washoe County, the city of Sparks, and the city of Reno. He said he supported the proposed legislation with the inclusion of a proposed amendment. The WQWRPP was signed in October 1996. Local governments in the Truckee Meadows affected by the program were committed to a water rights purchase program to improve water quality and in-stream flow in the Truckee River. The program was established to ensure water quality standards satisfied the criteria set forth by the Nevada Division of Environmental Protection (NDEP). A permit granted by NDEP provided for the operation of the Truckee Meadows Wastewater Treatment Facility, owned jointly by the cities of Sparks and Reno, and operated by the city of Sparks.

Mr. Isaeff pointed out the city of Sparks had been involved in the WQWRPP permit process since 1996. The 3 local governments involved in the programs presently owned 4 parcels of property in Churchill County consisting of 180 acres of land and 826 acres of water rights. The proposed legislation recognized the changing needs of various irrigation districts, including the Truckee Carson Irrigation District (TCID), and many irrigation districts had begun to sell off water rights to purchasers who intended to put the water to other beneficial uses. The proposed amendment Mr. Isaeff submitted sought to provide a mechanism for unburdening lands in irrigation districts, such as the TCID, from the current statutory lien for payment of assessments, tolls, and charges of the irrigation district for providing water services. Mr. Isaeff presented his proposed amendment in Exhibit D.

Mr. Isaeff said the measure provided the lien remain on the land until either the state engineer approved a change application or until an agreement was established with the irrigation district for payment of tolls, assessments, and charges. The arrangement worked on the few instances in which property owners sold only water rights and retained the land. The city of Sparks did not want to be landowners in Churchill County, and preferred to sell the four parcels of land in that county to private owners as soon as possible. In order to facilitate the resale of that land back to private ownership it was necessary to ensure the statutory lien was removed from the land and no longer a burden to the new owner of non-water righted parcels of land. New language needed to be added to cover both the sale of land with water rights or only the sale of water rights. Mr. Isaeff concluded his testimony by urging the committee to approve the proposed legislation with the proposed amendment in order to provide for the removal of statutory liens in both sale situations described above. He also urged the committee to request Legislative Counsel Bureau draft an amendment to ensure local government entities, such as the city of Sparks, were granted rights equal under the law to the rights of land owners. NRS 539.123 needed to be modified to grant voting rights to governmental entities that owned water rights within an irrigation district. He said it was necessary for local governmental entities to share in the decision making process of local irrigation districts in order to ensure all those affected had a voice in irrigation district management practices.

The Chairman said it would be beneficial to make arrangements, which would allow that a portion of water rights remain with parcels of land in order to continue productivity of previously irrigated land. She asked how Mr. Isaeff’s proposed amendment would affect governmental agencies. Mr. Isaeff explained his proposed amendment would provide an equal voice for all entities affected by the decision making process. The legislation mandated local governmental agencies pay all fees and charges attached to the land, and it was necessary for local entities to assist in determining how much those fees would be and how the irrigation district would be managed.

Mr. Carpenter asked if all water rights were sold off and the water used for other beneficial purposes, who would pay the charges for current improvements to the land. Mr. Isaeff said under the agreement described in the proposed legislation, the person who owned the water rights would be responsible to pay the fees even if they did not take delivery of the water. It was possible to petition the local irrigation district to retire those facilities if sections of an irrigation district were no longer being utilized.

Mr. Carpenter asked if the city of Sparks was prepared to pay the fees for maintenance of improvements to the system even though the water would be put to an entirely different beneficial use. Mr. Isaeff answered in the affirmative. If A.B. 252 passed and an application for change was filed, the law required the state engineer review the economic impacts of change applications submitted. In the future, he speculated, the state engineer would continue to require change applications even if the measure did not pass.

Gordon DePaoli, attorney representing Walker River Irrigation District (WRID), was the next speaker to address A.B. 252. He explained WRID was located on the East and West Walker Rivers near Yerington and Smith at the point both rivers entered the State of Nevada. Mr. DePaoli said the irrigation district supported the proposed legislation. He provided a proposed amendment (Exhibit E).

Mr. DePaoli explained an irrigation district was responsible for establishing assessments on properties with water rights. The district submitted assessments to the county assessor who included the assessments on property tax bills, from which the treasurer took the district assessment portion to be returned to the irrigation district. Foreclosure of property would occur if irrigation district assessments were not paid, similar to failure to pay property taxes.

Currently, within many irrigation districts, land and water rights sales were separate from each other. No longer were water rights tied to the land. Until the place of use of water rights was moved off the land to which it was appurtenant, irrigation districts were mandated by statute to continue to assess in the manner provided by law. The assessment method was against the land to which the water was appurtenant, resulting in the original landowner receiving the assessment charge. Because the lien was on the land, many problems were developing. One problem was landowners and individuals in subdivisions who owned no water rights were receiving bills for water they had not received. The proposed legislation would provide for irrigation districts to manage the problem and avoid many difficult issues.

Mr. DePaoli explained his proposed amendments. The first suggestion was to broaden the language of the measure so it covered any situation in which ownership of a parcel of land was different from ownership of water rights appurtenant. The change in the first part of subsection 6 of the amendment would resolve the issue presented by Mr. Isaeff regarding sale of land and water rights separately. The lien would remain in effect on the land until either the state engineer approved a proposed change in the beneficial use of the water or a change in the location of water use occurred. It would be acceptable for the irrigation district to require payment of assessments were secured. When water rights had no ties to the land, it was possible entities could default on the assessment. The result could be law suits; and in the case of the Federal Government with non-appropriation clauses defaulting, law suits could prove futile. The proposed legislation needed to clearly state the payment of assessment fees could be secured by the appurtenant water rights if the irrigation district approved. If the assessment was not paid, the district could foreclose on the water rights and bring the water rights back into the district. The language in the proposed amendment would resolve the problem and would affect subsection b.

Chairman de Braga asked Mr. DePaoli to clarify how the proposed legislation would affect operation and management charges on water transferred for non-irrigation use. He explained those charges would remain on the land to which the water rights were originally appurtenant until either the water rights were changed to another piece of land within the irrigation district or if there was a change in the beneficial use of the water within the irrigation district. An agreement to pay the assessment would be reached, which would be secured by the water rights. With that arrangement, if the assessment was not paid, water rights could be foreclosed upon and brought back to the district.

Mr. Carpenter suggested Mr. DePaoli’s language describing foreclosure be added to the proposed amendment. Mr. DePaoli said he had considered that; however, the statutes could be changed in such a way as to state if changes were allowed to be made and water rights were not appurtenant to any land the lien would be attached to the water rights and could be foreclosed upon.

Mr. Carpenter asked where the Nature Conservancy was located and if they were exempt from property taxes. Mr. DePaoli responded he knew only that it was located in Truckee Carson Irrigation District. The Chairman added the Nature Conservancy was the broker in many of the land purchases, reselling many parcels to wildlife interest groups.

Chairman de Braga asked if Mr. DePaoli had reviewed Mr. Isaeff’s proposed amendments. He said he had not, but he agreed to review them very soon. The Chairman said she expected to place A.B. 252 in subcommittee in order to review all proposed amendments; and she stressed the need for urgency due to the strict deadlines of the shortened session.

Senator Mike McGinness of the Central Nevada Senatorial District, was the next to testify on the proposed legislation. He said it was an important issue, which originated in the senate in the 1997 session but did not get out of the Committee on Natural Resources, Agriculture, and Mining. The fact the measure had resurfaced during the current session was indicative of the importance of the issue.

Senator McGinness briefly described the Newlands Project. He said the Federal Government made a contract with individuals in the Newlands Project to deliver water to the headgate. That contract was still in place. The proposed legislation would insure huge operation and maintenance charges would not burden those who wanted to continue farming. It would also give relief to new owners of the land by having the lien removed.

Senator McGinness said he would review all suggested amendments in subcommittee. Regarding Mr. DePaoli’s concern regarding voting rights of those with small water rights, the Senator stated owners of water rights with 5-acres or less were not able to vote on TCID matters until 1991, which was the result of a measure he introduced. He said if the ability to vote was granted to the Federal Government it would effectively give the United States Fish and Wildlife Service control of the entire Newlands Project. Senator McGinness said he appreciated the opportunity to work with the committee on satisfying the concerns of all involved entities.

Mr. Isaeff explained he had reviewed the amendment proposed by Mr. DePaoli and found it satisfactory with the exception of the last section regarding the payment of assessment fees secured by the right to use the water in a manner satisfactory to the irrigation district. He said that was an appropriate security measure when only private parties were involved. It would be an unacceptable arrangement when dealing with governmental entities. Under Nevada law, it was not possible to lien publicly owned property, and water rights were considered real property. It was neither possible nor necessary to allow liens against government owned property.

Chairman de Braga said it was understandable the committee was concerned about voting privileges for governmental entities. She agreed with Senator McGinness regarding the negative result of granting voting rights to governmental entities. Mr. Isaeff stressed the need for governmental entities to be treated as equals and be granted the same rights as other entities, including voting rights.

Mr. Mackedon stated he briefly reviewed Mr. DePaoli ‘s proposed amendments and looked forward to participating in subcommittee proceedings to perfect the language of A.B. 252. He said he agreed with Mr. Carpenter regarding the need for secured agreements. He did not believe the Federal Government was looking for equal voting rights, nor did he support the proposal.

The Chairman asked if there were any additional questions or comments, and there were none. She explained a subcommittee would convene forthwith to refine the language of the measure. She invited all concerned entities to participate in the discussion. She closed the hearing on A.B. 252 and opened the hearing on A.B. 103.

Chairman de Braga explained she wanted the committee to reconsider the vote on A.B. 103. The reconsideration was necessary to clarify information provided to the committee in a previous hearing and may require additions to the proposed amendment.

She called for a vote on a motion to reconsider A.B. 103 and add to the amendment. She said a two-thirds majority was needed.

The Chairman explained an amendment to the measure was passed by the committee to make Division of Minerals a commission. The amendment was incorrect. The amendment should have stated Division of Minerals was to become part of the existing Commission on Mineral Resources. Also, the measure should have stipulated the commission wanted to retain its seat on the Environmental Commission. Lastly, an amendment was needed to stipulate the effective date of the measure would be July 1, 1999, for both Division of Agriculture and Division of Minerals.

The Chairman asked if there were any further discussions on A.B. 103, and there were none. The hearing was closed on A.B. 103 and opened on S.J.R. 2.

Michael Stewart, Research Division, Legislative Counsel Bureau, was the first to address S.J.R. 2. Mr. Stewart explained during the 1997-1998 legislative interim he served as primary staff to the Legislative Committee on Public Lands. He said Senator Rhoads of the Senate Committee on Natural Resources requested he address the Assembly Committee on Natural Resources, Agriculture, and Mining to present an introductory statement on the proposed legislation.

Mr. Stewart said a long-standing issue monitored by the legislative Committee on Public Lands was that of rights-of-way claims. The committee was approached late in the interim by the Nevada Miners and Prospectors Association who wanted to amend provisions of the Federal Land Management and Policy Act of 1976 to require the identification and mapping of rights-of-ways on federally managed land. The association testified access to patented mining claims could be hampered if rights-of-ways were not mapped and administratively recognized. The association noted members of Nevada’s congressional delegation had been approached to propose an amendment to be introduced during the 106^th United States Congress. The proposed amendment became S.J.R. 2.

Alan Coyner, Administrator of Division of Minerals, provided the committee with a document entitled "United States Department of the Interior, Report to Congress on R.S. 2477, History and Management of Rights-of-Way Claims on Federal and Other Lands" (Exhibit F). He explained the report contained information on rights-of-ways issues, which could be referred to as an information source in reference to S.J.R. 2.

Richard Davis, private citizen, was the next to testify on the proposed legislation. Mr. Davis explained he had been a member of the Nevada Miners and Prospectors Association for many years. He said he supported the proposed legislation because it would require the United States Forest Service and the Bureau of Land Management (BLM) to recognize the validity of rights-of-way claims. He provided the committee with a handout, Exhibit G, which included his statement along with letters of support from the Nevada Association of Counties and attorney Frank Daykin on behalf of the Nevada Miners and Prospectors Association.

The Chairman asked if Mr. Davis had attended the Senate hearing on the issue, to which he responded in the affirmative. Chairman de Braga asked if S.J.R. 2 had received any opposition, to which Mr. Davis replied in the negative, adding the vote was 21 to 0.

Susan Miller, representing Sierra Pacific Power Company, was the next to testify in support of the measure. She explained it was a good common sense measure and would resolve right-of-way easement issues, which had heretofore created many diverse problems. It would also be a timesaver measure because it would expedite access to areas in easements that required the power company to enter in order to conduct maintenance work.

Stephanie Licht, representing Elko County, spoke as a proponent of the measure siting the importance of mining in Nevada as her reason for supporting S.J.R. 2. Small independent mining operations were as important as large corporate operations. She said the proposed legislation would resolve old long-standing problems and was a good piece of legislation for Elko County.

The Chairman called for additional questions and comments on S.J.R. 2 and as there were no, called for a motion.

Chairman de Braga requested Mr. Lee handle the measure on the floor of the Assembly. She closed the hearing on S.J.R. 2 and opened the hearing on A.B. 198.

Mr. Carpenter was the first to testify in support of the proposed legislation. He explained the measure was designed to deter negative situations resulting from the lack of clear legislation dealing with grazing rights issues. The measure was also designed to deal with eco-terrorism on the open ranges of Nevada. Eco-terrorism in the new west was practically war between cowboys and radical environmental terrorists. It was marked by acts of vandalism and economic sabotage against ranchers (Exhibit H).

Mr. Carpenter explained under the Taylor Grazing Act grazing permits issued by BLM were tied to base properties and it was important to ensure that remained the case. The proposed legislation was a pro-ranching measure designed to protect ranchers from violent and destructive acts of vandalism against their property.

Chairman de Braga asked if Mr. Carpenter’s district had experienced many cases of eco-terrorism and killing of livestock. She said many instances had been reported throughout the state. Mr. Carpenter said there had been some instances of violence in Elko County.

Robert Stewart, Information Specialist for the Reno office of the Bureau of Land Management, was the next to address the proposed legislation. He said his agency opposed the proposed legislation because it interfered with the United States Constitution. He said he was not prepared to give further testimony against the measure because it concerned an area in which he had no expertise. Mr. Stewart assured the committee he would gather more information and expert witnesses and present his agency’s opposition to the measure as soon as possible (Exhibit I).

Joe Johnson, Representing the Toiyabe Chapter of the Sierra Club, was the last speaker to testify on A.B. 198. The organization he represented opposed the measure because laws against the form of vandalism described in the proposed legislation already existed; therefore, there was no reason to pass additional legislation. He was also concerned about the attempt to establish property rights on land with grazing rights, which presently was not taxed. He expressed concern there would be requirements to pay fees without payment of taxes. Mr. Johnson said the solicitor general would be handing down a judgement on the issue for BLM.

The Chairman asked if it was possible to receive the solicitor general’s decision as soon as possible. Mr. Stewart pointed out the solicitor general was aware of the need for expediency due to the abbreviated session.

Mr. Carpenter said he had several extensive meetings with Legislative Counsel Bureau staff and it was determined the proposed legislation was constitutional and closely paralleled the Taylor Grazing Act, which was the enabling legislation, tied to base property, giving ranchers the right to run their livestock on the range. The measure was designed to get a stabilization of those rights for ranchers throughout the state.

Chairman de Braga asked Mr. Carpenter to comment on Mr. Johnson’s concern regarding the payment of fees without payment of taxes, and ranchers could be subject to litigation. Mr. Carpenter called upon Mr. Johnson to address the question. Mr. Johnson explained the issue of property rights and leasehold improvements for commercial structures that were considered property in entering into personal and real property tax schedules of counties. The issue of claimed property rights were truly property rights under Nevada’s constitution, and therefore was subject to property taxes assessed by counties. That was a matter for judicial review.

Mr. Hettrick said he wanted to clarify with Mr. Carpenter the intent of the measure was to address various issues relating to base properties with grazing rights attached. One such issue would be the case of a property owner with base property and grazing rights attached who decided to lease that property would be leasing it with grazing rights intact. The grazing rights would automatically transfer along with the leasing of the base property. He said the only part of the measure that might be undesirable was the section stating unless the person consents to or receives just compensation for the land. That right would become part of a payment in return if the person was denied just compensation. He said that did not establish a taxable personal property right. The remainder of the measure dealt with fencing, gates, watering facilities, and other allowable structures on base property, or private property, as well as public property. Those elements satisfied BLM’s requirement to properly contain animals and monitor use of grazing land. That did not establish private property rights. Mr. Hettrick said the measure was a repeat of the Taylor Grazing Act put into state law.

Mr. Carpenter agreed with Mr. Hettrick’s evaluation. The proposed legislation allowed for the sale or lease of base property and ensured just compensation for it. A BLM Section 4 permit handled improvements on public lands. However, the county assessor did not assess that property. Recently there was discussion concerning changing the law to allow those lands to be taxed.

Chairman de Braga asked if federal law required wells on public land to be considered property of the Federal Government. Mr. Carpenter said in that case an individual owned the water rights. It was arguable that if you owned water rights you automatically had the right to graze your livestock on public land. Chairman de Braga said her particular concern was for those individuals who would not receive reimbursement for structures they built for their livestock on land that was sold or on land where water rights had been lost. Mr. Carpenter pointed out BLM permit holders were allowed to remove all structures with the exception of the well itself.

Mr. Hettrick said the scenario Mr. Carpenter described applied only to grazing preference rights and not to the equipment itself. There had been instances in which property had been sold or leased and grazing rights preferences did not follow the base property. He considered that issue to be the intent of the measure.

Mr. Johnson said the proposed legislation attempted to establish additional property rights, which routinely were sold with grazing rights on federal lands. If the measure did not change the nature of property rights, he did not see the point of considering the measure. It was an attempt to put additional language into state statute, which would define property rights. He said it was clear the proposed legislation was to document more secure property rights for ranchers. The process might lead to unintended consequences.

Mr. Neighbors said the same issue surfaced three sessions ago. Currently, the Supreme Court upheld the decision, which stated whenever property otherwise exempt from taxes was used to conduct business for profit that property was subject to county assessment and payment of taxes.

Mr. Carpenter said he could confer with Legislative Counsel Bureau for a definitive explanation on the subject.

Chairman de Braga said the committee would further explore the issue as it was important topic.

Ms. Licht, representing both Elko County and the Nevada Woolgrowers Association, expressed her support for the proposed legislation. She pointed out in the 1930’s 98 percent of the people lived on the land and only 2 percent lived in cities. There was very little argument over who did what to the land because everyone was trying to survive in much the same manner. Most families lived on farms and made their living. If those families did not make a living, they still remained on the farm. Today, however, those statistics had reversed and approximately 5 generations were removed from the land. In view of those statistics, the more that could be done to help farmers and the agricultural industry the better off everyone would be.

Chairman de Braga asked if there were any further questions or comments and there were none. She stated there would be a subcommittee on A.B. 252 and invited Mr. Carpenter to join the hearing along with Senator McGinness.

There being no further business before the committee the hearing was adjourned at 3:45 p.m.

RESPECTFULLY SUBMITTED:

Sharon Spencer,

Committee Secretary

APPROVED BY:

Assemblywoman Marcia de Braga, Chairman

DATE: