The Committee on Natural Resources, Agriculture, and Mining was called to order at 1:42 p.m., on Wednesday, March 10, 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. John Marvel

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Genie Ohrenschall

Ms. Bonnie Parnell

GUEST LEGISLATORS PRESENT:

Speaker Joseph Dini, District 38

Senator Lawrence Jacobsen, Western Nevada Senatorial District

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Senator Jacobsen, representing the Western Senatorial District, was the first to speak in support of the measure. He said he was originally opposed to the Tahoe Regional Planning Agency (TRPA), but found great satisfaction in serving as a member of the Tahoe Oversight Committee (TOC). He pointed out Chairman de Braga had served on the committee in the past interim, Assemblyman Hettrick was a past chairman of TRPA, and Assemblywoman Segerblom had also served on the committee.

Senator Jacobsen explained A.B. 285 was a joint proposal of TOC and Nevada’s executive branch of government. The measure was developed as part of the hearings held in the Tahoe Basin, and was one of the most significant pieces of legislation on Lake Tahoe to be developed in the past 20-years. Four hearings were held in the Tahoe Basin during the interim, and members participated in an extensive on the ground survey of projects and issues concerning the Nevada side of the Tahoe Basin. Erosion, forest health, stream restoration, and issues pertaining to Highway 28 and Incline Village were some of the concerns studied by TOC. Many of the studies and much of the work performed by TOC was the result of the 1997 Presidential Forum at Lake Tahoe, one of the most significant events in the state’s history.

Senator Jacobsen called Pamela Wilcox, Administrator of State Lands, to the podium to testify on the proposed legislation. She explained the measure was a direct result of the Tahoe Presidential Forum in July 1997. The message from that forum was one of hope as well as urgency. If the problem of turbidity of the water of Lake Tahoe was not seriously addressed in the immediate future, the quality of the lake could be lost forever. The State of California had appropriated more than $20 million to the California Tahoe Conservancy for 1999. TRPA, in cooperation with local governments, was studying alternatives for raising the funds needed by local governments to contribute to the effort. Ms. Wilcox provided the committee with a handout entitled "Lake Tahoe Initiative: Environmental Improvement Program" (Exhibit C), which provided a financial breakdown of the various budgeted categories, project specifications, and allocated monetary contributions for Fiscal Years 1999 through 2001. She said voters had recently approved a $20 million bond act.

Mr. Marvel asked what efforts were planned to ensure mitigation of the pollution problems in the Lake Tahoe Basin. Ms. Wilcox said most of the work scheduled were erosion control projects, which primarily took the form of stabilizing cut and fill slopes along roads and highways. Sediment run-off needed to be captured and channeled into sediment basins for filtering before getting into the lake. Through the years, development at the lake had systematically eliminated natural sedimentation barriers that had prevented silt and sediment from damaging the quality and clarity of the water in Lake Tahoe. Stream restoration was another project that would remedy sedimentation problems, along with forest health and wildlife habitat restoration. The goal was to restore the Tahoe Basin and surrounding forests closer to the condition of the area prior to the mining activities of the Comstock a hundred years ago, which included clear cutting the forests. The forests around the lake were never healthy after clear cutting because the trees that replaced the original forests were monocultural stands, all the same age, and all the same species. Those were not healthy forests; they were prone to disease and wildfire. Those forests needed to be restored. Forest fires were a natural method of restoring forests health to those timber stands, but allowing the forests to burn was not an option due to the immense ramifications.

Mr. Marvel asked what was planned for the slash timber throughout the Tahoe Basin. Ms. Wilcox explained biomass projects were planned for the refuse timber, which was a natural byproduct developed from forest wastes that could be made into various products including mulching materials or for use as a cost effective fuel source. Studies were being conducted to find other potential uses

for biomass products. Presently, most of the slash was burned in controlled burns; however, that practice created other problems, including air pollution and human safety issues.

The Chairman said Assembly Committee on Ways and Means recently viewed a presentation that demonstrated beneficial uses for forest waste such as dead trees. Biomass products were useful, lucrative, and environmentally sound. She said using forest waste products in positive and productive ways had always been the position of the Assembly Committee on Natural Resources, Agriculture, and Mining.

Ms. Parnell asked why the Department of Motor Vehicles (DMV) was such a large funding source. Ms. Wilcox explained DMV had a funding source dedicated to air quality, which presently had a substantial reserve of approximately $7.5 million. During the budgeting process, state government agencies were not allowed to institute any new general fund programs, causing the agency to develop creative methods to fund Tahoe Basin programs. The budget office suggested using the reserve as a potential, short-term remedy. Ms. Parnell asked if the financing of Tahoe projects from the reserve source would affect only a portion of the DMV reserve. Ms. Wilcox responded in the affirmative, adding the balance of the fund would be approximately $3.5 million at the end of the present biennium.

Mr. Marvel asked if the money in the DMV reserve fund was from Washoe and Clark Counties. Ms. Wilcox replied in the affirmative. Mr. Marvel asked if those counties were displeased with the arrangement. She said representatives from those counties had expressed concern regarding the long-term effects of the policy. Those counties had not, however, made any official statements against the arrangement at any of the Tahoe Basin project hearings.

Upon reviewing the material presented, Mr. Carpenter said he noticed private funds were estimated to be $152.5 million. He asked from where were those funds going to come and what projects would the money fund. Ms. Wilcox explained the private component needed retrofitting, which meant many pieces of privately held property in the Tahoe Basin needed to be made environmentally sound. Many private parcels contained numerous impervious surfaces such as roofs, garages, walkways, and driveways. When rain hit those surfaces, it hit much harder than it hit dirt and trees. The volume of run off was greater and swifter as well. That was one way development around the lake negatively impacted the basin. A program had been developed called the Backyard Conservation Program, a cooperative effort between private property owners at the lake and the Natural Resources Conservation Service NRCS. The federal agency offered technical assistance to homeowners and helped them minimize the impacts of their development at the lake. Some of those techniques included constructing infiltration trenches along the eaves of the buildings to interrupt the water coming off the roof, and stabilizing slopes that had been disturbed using vegetation or other stabilization treatments. Individual property owners would be responsible for doing the work on their parcel. She said Pam Drum of TRPA could provide more information on the subject because she worked on that particular project.

Mr. Carpenter asked if local governments would be responsible for passing ordinances to ensure members of the community did the work required. Ms. Wilcox said she was not certain, but most likely homeowners would take it upon themselves to do the required work. Education and encouragement, along with concern for the environment, should ensure individuals would do the right thing.

Ms. Wilcox briefly reviewed the proposed amendment prepared by Division of State Lands (Exhibit D). She explained section 1, subsection 1 would read the administrator of Division of State Lands, in cooperation with other state agencies shall coordinate the development and implementation of a program of environmental improvement projects for the protection of Lake Tahoe Basin. She said that was an important statement because her agency did not have regulatory authority in Tahoe Basin. Division of State Lands was tasked with coordinating a multi-agency effort. Section 1, subsection 2 explained the state’s commitment was to provide $56.4 million during a 10-year period, and allowed general obligation bonds to be issued in order to provide the necessary funds.

Chairman de Braga asked if funding was provided on an as-needed basis or was it allocated by each individual project. Ms. Wilcox said the money was allocated each biennium after reviewing lists of proposed projects.

Mr. Carpenter said not long ago a statewide bond issue was passed, which raised approximately $26 million. Ms. Wilcox said 2 bond issues had been presented. The first bond issue was for $31 million and the second one was for $20 million. He asked if the next bond act did not have to be presented before the citizens. Ms. Wilcox agreed, adding state capital improvement bonds did not necessarily have to go to a vote of the people. The budget office suggested funding sources be sought elsewhere on a biennium to biennium basis.

Senator Jacobsen said Lake Tahoe was a world class recreational and tourist resource, which was capable of enhancing the state’s economy in many ways. It was important to preserve and enhance that resource, including the air, water, forests, wetlands, wildlife, and all other aspects of the Tahoe Basin including commercial enterprises and private property. Inmate crews did much of the work around the lake, and were a vital resource in maintaining the park system in the region. Senator Jacobsen said it was important to remember work in the Tahoe Basin was a bi-state effort. He said it was important to hold a Nevada/California summit, something that had never occurred before but was needed.

Mr. Carpenter expressed concern regarding the probability of wildfires in the region due to the large number of standing dead and dying timber. Ms. Wilcox said it was a well known fact that wildfire in the Tahoe Basin was a real threat. It was another issue, which contributed to the feeling of urgency at the lake. The forests had to be returned to healthy conditions as soon as possible. For each issue there were pros and cons and many different opinions.

Pam Drum, Environmental Information Coordinator for TRPA, was the next speaker to testify in support of A.B. 285. She thanked Ms. Wilcox and other state agencies for their hard work in the Tahoe Basin. She emphasized the importance of enhancing recreational opportunities at Lake Tahoe and protecting the sensitive ecosystem for posterity. She presented the committee with a handout entitled "Continued Review of the Tahoe Regional Planning Agency 1997-1998" (Exhibit E). She explained her agency issued permits for all projects at Lake Tahoe including those on private property. As part of the permitting process, TRPA required best management practices be employed at all times.

Ms. Drum pointed out there was another organization at the lake, the South Lake Tahoe Redevelopment Project, which was responsible for developing and implementing private sector projects at South Lake Tahoe. The agency managed between $20 and $30 million in private sector investments, particularly for environmental projects. She stressed the need for urgency in order to preserve the quality of life and the environment around the lake, and urged the committee to support the measure.

The Chairman asked if there was a substantial volunteer force at the lake working on various projects. Ms. Drum said organizations such as the League to Save Lake Tahoe was instrumental in recruiting volunteers to work on projects and to assist in educating the public on the need for, and techniques of, environmental stabilization projects.

Wayne Perock, Administrator, Division of State Parks, spoke next in support of the proposed legislation. He said he was delighted the State of Nevada was coming forward to assist in resource management and working with TRPA to restore and preserve Lake Tahoe Basin in a healthy and productive standard. He reminded the committee Lake Tahoe State Park was one of the biggest, non-federal parks in the nation. He said he was most concerned about forest health and the need to prevent devastating wildfires from occurring, while managing erosion and sedimentation problems. He presented the committee with a handout from his agency entitled "Lake Tahoe Nevada State Park Tahoe Basin – Environmental Improvement ‘Threshold’ Projects" (Exhibit F).

Mrs. Segerblom asked if the beach at the park had been enlarged in recent years. Mr. Perock responded in the negative, adding it was a natural beach and would be left in a natural condition. Some boat docks may be expanded in time. Sand Harbor had been designed to accommodate a certain level. Over crowding of recreational areas was unproductive.

Rex Harold from Division of State Lands requested to be put on record as in support of the measure, but relinquished his turn to speak before the committee.

Steve Teshara, Executive Director of the Lake Tahoe Gaming Alliance at the south shore of the lake and a representative of Lake Tahoe Transportation and Water Quality Coalition, spoke in support of A.B. 285. He said the agencies he represented supported of the measure unanimously.

Mike Jabora, Chairman of the Tahoe Citizens Committee, supported the proposed legislation. He said his organization represented the private sector of the lake. Support of the measure was unanimous within the communities he represented. He said Lake Tahoe license plates were an important financial contribution to the health of the environment in the Tahoe Basin. The cooperative spirit between the gaming industry and the private sector was genuinely a working partnership. He urged the committee to support the measure.

Amir Soltani, Chief Hydrologic Engineer of the Nevada Department of Transportation (NDOT) was the last to testify in support of A.B. 285. He said $20 million of the $56 million requested would be used by NDOT. Controlling erosion coming off cut slopes along roads would improve roadway safety, and eliminate the danger of boulders falling from unstabilized hillsides.

The Chairman asked if there were any further questions or comments, and there were none. She closed the hearing on A.B. 285 and opened the hearing on A.B. 380.

Chairman de Braga was the first to speak in favor of the proposed legislation. She explained the measure was a work in progress, and very important to the people of Nevada. Several amendments would be presented and all would be reviewed and evaluated. Mrs. de Braga said the intent of the measure was to take forfeiture out of Nevada’s state surface water law and established a priority date of 1902 for the Newlands Project. The goal of the measure was not to specifically benefit the Newlands Irrigation Project, but to benefit all water users on the Truckee and Carson River systems, and any other areas engaged in federal reclamation projects, including Humboldt and Pershing Counties. Also, the measure would redefine place of use in water law for reclamation projects to mean the entire reclamation project as the place of use. She suggested removing the entire language of section 5 of the measure, which pertained to court jurisdiction.

Chairman de Braga pointed out the measure would not change water law duty in any way by including the three provisions. It would not use more water than currently being used, nor would anyone receive more water than they were currently entitled to receive. They would, however, have more flexibility in the use of the water, and with that increased flexibility, and with establishing the entire reclamation project as the place of use, the measure would lessen the burden on the office of the state engineer for change of use applications. The proposed legislation was also expected to bring back into limited production some of the lands that had been stripped of water in the long-term. That provision would effectively benefit those areas where the purchase of water rights had occurred and removed water rights from the land.

Chairman de Braga called for input from all effected entities. She explained the legislation was meant to be beneficial to all concerned parties and not be detrimental in any way to water users.

Vice Chairman Segerblom asked what sections would be removed from the measure. Chairman de Braga said section 5 would be deleted.

Mike Mackedon, Fallon City Attorney, explained he was speaking as a representative of the City of Fallon due to the city’s interest in state water rights laws as they affected Churchill County. He presented the committee with proposed amendments to A.B. 380 (Exhibit G). Mr. Mackedon presented an explanation of his proposed amendments, which was as follows:

Mr. Mackedon said his amendment intended to state the right to use surface waters could not be lost or forfeited through nonuse. The language applied only to surface water and not to underground water.

Chairman de Braga commented it had previously been established under state law that users of underground water would be notified within 1-year of the date forfeiture of water rights would occur. That ability did not exist under surface water rights, which was another reason the water rights forfeiture statute should not apply.

Mr. Mackedon added currently there was litigation pending over whether water rights had been forfeited, and one of the most common arguments was the statute had never been applied to surface water, and should not apply now. The proposed legislation would settle the issue and end the debate.

Mr. Lee said he had a problem with prescriptive rights from other previous legal conflicts. He asked Mr. Mackedon to review his position on the issue. Mr. Mackedon said he had no recommendations to make on the issue of prescriptive rights. He recommended the law remain intact as it presently appeared in statute.

Mr. Mortenson asked if there was a reason for not including underground water. Mr. Mackedon explained the proposed legislation was intended to apply only to surface water, NRS Chapter 533.

George Benesch, Attorney representing the City of Fallon, added groundwater issues were contained in an entirely different chapter in the NRS than were laws pertaining to surface water. Those were contained in NRS Chapter 534. He said the amended version of A.B. 380 was an attempt to clean up the language of the statute relating to surface water, and to make it consistent with what the state engineer had been doing regarding the issue. It was not the intent of the measure to rewrite Nevada water laws. Federal courts were currently interpreting Nevada water laws, and the measure was an attempt to keep the interpretation of Nevada water laws in the state’s courts, as well as following the administrative guidelines employed by the state’s engineer.

Michael Turnipseed, State Engineer, Division of Water Resources, was the next speaker to address the proposed legislation. He explained his agency preferred the language in the proposed amendments to the original language in the measure. He said legislation governing forfeiture of surface water was needed because the issue had never been properly addressed since the original legislation was written in 1913. Surface waters did not always exist in some parts of the state, but appeared and disappeared for years at a time. Archaic and incomplete language needed to be clarified, and the specific issues of surface water right forfeiture and abandonment needed to be addressed in a

definitive form. A.B. 380 in its amended form should correct those issues. He explained much of the amendment changed the language back to existing water law.

Mr. Lee said he was still concerned about the issue of prescriptive rights. He asked if the word no could be inserted, so the proposed legislation would read no prescriptive rights. He asked if the proposed legislation would have to be re-referred to the Assembly Committee on Judiciary because prescriptive rights were a judicial matter. Chairman de Braga said adding no would return the issue back to the present language of the statute.

Mr. Carpenter said the amendments were hard to follow. He asked Mr. Turnipseed to explain the amendments. Mr. Turnipseed said the amendments were consistent with actions taken by state engineers for the past 95 years. The language stating the place of use was the entire reclamation project was consistent with water laws throughout the western United States.

Chairman de Braga recognized the presence of Joan Lambert and John Bonaventura, both lobbyists were previously legislators.

Norman Frey, Chairman of the Newlands Water Protective Association, explained the mission of his organization was to protect the water and hydropower rights of the people in the Newlands Reclamation Project. He agreed with others the language of the original legislation was unacceptable, but the amendments brought the legislation to an acceptable condition. In 1983, water rights were being shuffled around within the Newlands Project when many of the problems discussed today emerged. In an effort to resolve those problems, A.B. 380 emerged. It was difficult to promote agriculture as a viable industry when concerns about forfeiture and abandonment of surface water rights continued to appear.

Chairman de Braga asked Mr. Frey to explain how water rights had been reduced in some areas, such as corners of fields, beds, banks, and bench lands. Mr. Frey explained the use of aerial photography was routinely used by the Federal Government to spy on farmers and ranchers several times a year. The result had been the right to use water on rounded, or radius, cornered fields had been taken away, under the pretense water had been abandoned. The technique was a method of micro-managing reclamation projects. In 1985, a federal judge ruled in favor of the United States government when it stated water rights had changed along with the per acre water duty. The water rights change on his property went from 4.5-acre foot per acre down to 3.5-acre foot per acre. That decision adversely affected the use of agricultural bench lands. Approximately 3,300 acres of water rights, which were instantly and arbitrarily diminished by the Federal Government due to the ruling of the judge. Mr. Frey said it was imperative the State of Nevada get out from under federal intervention in water rights. If that could be accomplished through clarification of abandonment and forfeiture laws he would support the proposed legislation with its proposed amendments.

Ross de Lipkau, Attorney from Reno representing the Las Vegas Valley Water District LVVWD) and the Southern Nevada Water Agency (SNWA). He explained the proposed legislation was unacceptable without the proposed amendments. He said the proposed amendments as presented by Mr. Mackedon set forth the following 3 basic items, with which he agreed:

• Surface water could not be the subject of forfeiture, but must be the subject of abandonment.
• The priority date for Truckee Carson Irrigation District (TCID) was set at 1902, as established in both the Truckee and Carson River decrees.
• TCID was allowed to use its water any place within the confines of the district.

Mr. De Lipkau said he wanted to work with the power company, Mr. Mackedon, Mr. Benesch, and the Committee on Natural Resources, Agriculture, and Mining to refine the language of the proposed legislation, using the proposed amendments.

William Isaeff, Deputy City Manager for the city of Sparks, was the next speaker to address A.B. 380. He explained the city of Sparks, along with Reno and Washoe County, were water rights holders in the Truckee Carson Irrigation District. He said he had intended to speak in opposition to the measure, because it was unacceptable in its original form as it appeared to over turn decades of state water law procedure. However, he pointed out Mr. Mackedon’s proposed amendment changed his initial opinion.

Mr. Isaeff said he was not clear on some of the provisions included in the amendment, but agreed with the three main points Chairman de Braga explained was the purpose for A.B. 380. He added there was a fourth purpose for the proposed legislation the Chairman had not mentioned, which was explained on page 7 section 3 in the description of beneficial use. The fourth purpose was to create the presumption water rights had not been abandoned. The proposed language was new for both existing law and the first version of the measure. It was an important aspect and needed to be included as one of the designated reasons for the proposed legislation. However, there were several areas appropriate for including the concept of beneficial use, or presumption against abandonment. He pointed out people might be holding water and not putting it to immediate beneficial use because they were acting pursuant, or in accordance with, an officially adopted land use or water plan that governed their particular jurisdictional area. People held water for unspecified periods of time while watching changing market conditions, believing they would sell the water as market values changed. The water was not abandoned, but held for specific uses later.

Mr. Isaeff explained he had another concern regarding the proposed legislation and the proposed amendment. On page 6 of the proposed amendment, subsection 3, there was reference to an agreement. It was not clear what agreement was being considered, or if the reference was to a past arrangement, or some agreement to be negotiated after the measure became law. Extensive clarification was needed to explain the reference.

The Chairman said she agreed with Mr. Isaeff’s point. She said on page 5, the reference to all water used in the state for beneficial purposes shall remain appurtenant to the place of use; section 1, that if for any reason it should at any time become impracticable to use water beneficially or economically at the place to which it is appurtenant, the right may be severed from such place of use and simultaneously transferred and become appurtenant to other place or places of use was not the intent of the proposed legislation. She said she wanted the measure to state it was not required to sever that right. The owner should have the ability to move that right within the land he owned. Mr. Isaeff said he agreed with that concept, but had trouble with the language contained within the measure to explain the point.

Chairman de Braga asked if any aspect of Mr. Isaeff’s suggestions were based on speculation, to which Mr. Isaeff responded in the negative. He added it was a legitimate basis for finding of non-abandonment of water rights and was appropriate for inclusion in the proposed legislation.

The Chairman asked if non-abandonment included water held by a municipality for future growth. Mr. Isaeff responded in the affirmative, adding it was acceptable for private property owners to hold water in accordance with approved land use or water planning according to local ordinances. He pointed out the proposed amendment attempted to put the measure back into current law without any other significant changes.

Bjorn Selinder, Churchill County Manager from Fallon, said he was pleased to hear A.B. 380 was a work in progress because, he too, had a problem with the measure as originally presented. Incorporating the language of the proposed amendment changed his attitude. He said he was satisfied the measure would do its intended work of clarifying the issue of abandonment of surface water. He urged the committee to vote in favor of the measure as amended.

Chairman de Braga said a subcommittee would be held to review the proposed amendments. She said she would act as chairman of the subcommittee, along with committee members Mr. Hettrick and Mr. Neighbors.

There being no other business before the committee, the meeting was adjourned at 4:05 p.m.

RESPECTFULLY SUBMITTED:

Sharon Spencer,

Committee Secretary

APPROVED BY:

Assemblywoman Marcia de Braga, Chairman

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