The Committee on Natural Resources, Agriculture, and Mining was called to order at 2:00 p.m., on Wednesday, April 21, 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:

Senator Dean Rhoads, Northern Nevada Senatorial District

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

Senator Dean Rhoads of the Northern Nevada Senatorial District was the first to testify in support of the proposed legislation. He explained interbasin transfers of water had been addressed in Nevada for many years and was an issue of great importance to both urban and rural areas of the state. During the 1997 Legislative Session, S.B. 454 was introduced, but did not receive the attention it deserved because it was introduced late in the session. Therefore, it was recommended that the Committee on Public Lands investigate the subject in greater depth prior to the 1999 Legislative Session.

Senator Rhoads pointed out the measure outlined the criteria the state engineer must consider when reviewing an application for an interbasin transfer of ground water. The proposed legislation provided a statutory definition of interbasin transfer of ground water and clarified the responsibilities of the state engineer, which must be determined in order to consider if additional studies were needed prior to postponing action on an application. The criteria for determining the need for additional studies, which was developed from the 1993-1994 Interim Legislative study of the state water plan in consideration of the use, allocation, and management of water, was as follows:

• Whether the applicant had justified the need to import water to another basin.
• Whether the applicant had demonstrated that a conservation plan had been adopted and was being effectively carried out in the basin into which the water was being imported.

• Whether the proposed action was environmentally sound as it related to the basin from which the waster was exported.
• Whether the proposed action was an appropriate use that did not unduly limit the future growth and development in the basin from which the water was being exported.
• Any other factors the state engineer determined to be relevant to the issue.

Senator Rhoads concluded his testimony by urging the committee to support S.B. 108. The senator’s entire testimony was included in Exhibit C.

Amy Hill, representing Barrick Goldstrick Mines, was the next proponent of the proposed legislation to testify. She said the mining industry supported the measure. She pointed out the proposed legislation would not exempt the mining industry from review by the state engineers or from the criteria established by the interim committee for the review process.

The Chairman asked Ms. Hill if the mining industry had initially been exempted from the proposed legislation, to which Ms. Hill responded in the negative. She added interbasin water transfer permit requirements were the most strictly enforced for the mining industry. The mining industry wanted an exact definition of interbasin water transfer to be included in the measure, but had never requested or received an exemption from the permitting process.

Mr. Mortenson asked who comprised the legislative interim Committee on Public Lands. Ms. Hill explained it was a statutory committee and the committee members were Mr. Neighbors, Ms. Ohrenschall, Mr. Marvel, and others including members of the public.

Naomi Duerr, State Water Planner, spoke as a proponent of the proposed legislation. She said the measure was the result of a great deal of effort and consensus. The timing and development of the measure preceded the interim committee, she pointed out. The issue went back into the history of the state and was an integral part of the settlement of Nevada. It involved the withdrawing either of groundwater or surface water from one basin or county for beneficial use in another basin or county. Growing urban areas were looking for ways to purchase and transfer existing water rights and change them to municipal use water rights as a way of augmenting instream flows.

Ms. Duerr said water transfers had contributed to the economic development, growth, and prosperity of Nevada, but the cost of conducting a basin transfer was very great and could potentially impact the following (Exhibit D):

• The rights of existing water users could be permanently effected.
• Reduction of instream flows.
• Decreased flow to wetlands and lakes downstream at points of diversion.
• Decreased recharge to aquifers
• Social, economic, and fiscal concerns regarding potential losses of taxable income, social stability, or future economic development as related to population impacts on growing urban areas.

Ms. Duerr pointed out section (b) of the proposed amendment to the legislation submitted by Eureka County (page 2 of Exhibit E) was inaccurate and should be reworded. It stated if the state engineer determines that a plan for conservation was needed regarding interbasin water transfers. The statement was incorrect because Nevada Revised Statutes (NRS) 540 required the conservation plan be presented, and therefore, was not a requirement "to be determined by the state engineer."

Mr. Neighbors asked if she had requested the Senate amend the language of Eureka County’s amendment. Ms. Duerr replied in the negative.

Mr. Hettrick asked why it was necessary to restate in the proposed amendment the requirement that conservation plans had to be submitted if that requirement already appeared in statute. Ms. Duerr responded that the state water plan was about to be adopted. After its adoption, no additional regulations could be included in the plan. It was important to address all concerns before the plan was approved.

Steve Bradhurst, representing Nye, Lincoln, and White Pine Counties Boards of Commissioners, was called upon by Chairman de Braga to testify on S.B. 108. He explained the state engineer had to consider certain issues when reviewing applications for water transfers. He had to be certain there was sufficient ground water available and if transferring water would adversely impact another party’s water rights. The state engineer also had to determine if granting the transfer was in the public interest. Nye, Lincoln, and White Pine Counties were three rural counties who were involved in a water importation project since 1989. Their greatest concern was would there be enough water left in the basin from which the water came to ensure that basin would remain environmentally viable.

Mr. Bradhurst said there was need for a concise definition of what was required in order to ensure public interest would be protected regarding water rights laws, particularly as it applied to interbasin transfers. It was important to protect the future environment of basins in rural communities to ensure water would be available for future growth.

Mr. Marvel asked if Clark County had withdrawn its applications, to which Mr. Bradhurst responded in the negative, adding Clark County had 121 applications filed in the three rural counties he represented.

Pete Goicoechea, Chairman of the Eureka County Board of Commissioners, testified as a proponent of the proposed legislation. He said he was concerned the language of the proposed amendment would exempt the mining industry for the proposed criteria and strict guidelines of the language relating to interbasin water transfers. He said he was specifically concerned that the language stated the beneficial use of the water transferred occurred at the point of dewatering and the balance of the water would be considered wastewater. Over 2 million acre-feet of water would be discharged as wastewater at the three mines in northern Eureka County. He asked if all that water was actually wastewater. He said if it was wastewater, there was no logic in discharging it into Eureka County rivers. Eventually the water would leave the county entirely. Mr. Goicoechea presented the committee with a proposed amendment to the legislation along with his testimony and a map, which showed mine dewatering discharge locations in the Humboldt River Basin (Exhibit E).

John Balliette, representing Eureka County Board of Commissioners, was called upon to testify on the issue of mine dewatering. He said mine dewatering was not legally an interbasin water transfer, the end result was an interbasin water transfer. He used the Humboldt-Carson Sink as an example of such a transfer and added both areas were at record levels. He predicted negative environmental influences would occur in areas included in the transfer process as well as long-term negative impacts on surrounding areas.

Mr. Lee asked what Mr. Balliette’s main concerns were. Mr. Balliette said he wanted the interest of the public protected. That would be accomplished by including language into S.B. 108, which would ensure all proposed beneficial water uses were thoroughly reviewed during the permitting process to ensure the proposals were environmentally sound.

Mr. Carpenter said the proposed amendment submitted by Eureka County would essentially shutdown the mining industry in Nevada. Mr. Goicoechea explained the language was not intended to shutdown mining in the state. The proposed amendment was subject to all points of review as detailed in the established criteria, which would be followed by the state engineer. Mr. Carpenter said he would not support any proposed legislation or amendments that could potentially negatively impact the mining industry in Nevada. Mr. Goicoechea said mining was a legitimate proscribed beneficial use of water.

The Chairman asked if Mr. Goicoechea considered subsection 4 of his proposed amendment to be a contradiction of subsection 8. Mr. Goicoechea agreed the two subsections contradicted each other and that subsection 8 posed a major concern for the Eureka County Board of Commissioners. Chairman de Braga asked what changes to the proposed language he would suggest in order to ensure the concerns of all involved entities were addressed. He said exporting 2 million acre-feet of water could seriously impact rural communities and permanently hamper future growth in those areas. The possibility streams could dry up and 20 percent reduction in flows to the Humboldt River were scary possibilities. He suggested the state engineer along with Eureka County and all other involved entities thoroughly review the permitting process before passing the proposed legislation.

Mr. Mortenson asked if Eureka County would be satisfied if language was included in the proposed legislation that strictly forbade the state engineer from allowing wastewater from dewatering of mines to enter rivers, but instead had to be recharged into the ground at some distance from rivers. Mr. Goicoechea responded in the affirmative and added his county also advocated additional upstream storage as a possible resolution to the issue. Continued secondary applications of water was another alternative.

Karen Peterson, representing Eureka County, stated representatives of the mining industry had told her that discharge water from mine dewatering was transferred into another basin. Ms. Peterson stated that was the water about which Eureka County was concerned.

Hugh Ricci, Deputy State Engineer for Nevada Division of Water Resources (NDWR), was called upon to clarify issues concerning mine dewatering. The Chairman asked Mr. Ricci to comment on why the transportation of used, discharged water was not considered an interbasin transfer of water by NDWR. Mr. Ricci said existing law along with the proposed legislation in its original form, already defined an interbasin transfer of water; however, he agreed to study the list of criteria presented at the meeting and incorporate them into the permit process.

Mr. Mortenson said he had heard Mr. Ricci state there were only three alternatives to releasing discharged water. They were discharging water into the river, recharge it into the ground, or find another beneficial use for it. He asked if the water could be released onto a playa where part of it would evaporate, but a larger amount would seep into the ground and eventually replenish the basin. Mr. Ricci said Mr. Mortenson’s suggestion was only viable if recharged water was introduced through an enhancement system, such as an infiltration basin. He said it was important to consider another factor, which was water could not be spread over land that was privately owned.

Mr. Marvel asked how much water Barrick Goldstrike Mines was discharging into the Humboldt River. Mr. Ricci said Barrick presently discharged no water into the Humboldt River because it reused all wastewater for irrigation of crops.

Chairman de Braga asked if Mr. Ricci would accept the proposed new language for subsection 4 as suggested by Eureka County. Mr. Ricci said his agency already did what was suggested in the proposed amendment because it reviewed all mining applications the same way all interbasin water transfers were considered and in which water would be beneficially used in another area. A protest and appeal procedure was already in place, which allowed applicants an opportunity to have their applications further reviewed. Applications would be reviewed to determine how much water was needed to carry out the use for which the process permitting was requested. Submission of conservation plans would not necessarily be appropriate for mining operations.

Mr. Hettrick said the main issue about which Eureka County was concerned was from where water was coming for its intended beneficial use and not where discharged water was going after it was used. He said the county’s concern involved the beneficial use of water, which was the point of diversion such as a mine Inadvertently, water was transferred to another basin before it disappeared. He asked Mr. Ricci to address the question regarding water law, which required the state engineer’s office to review the inadvertent transfer of water to another basin after beneficial use. Mr. Ricci said beneficial use was studied from the front end of the situation, which meant how much water was the mine projecting it would have to pump. More water would be pumped than would be used. That determined the approximate amount of excess water that would need disposal in a legal manner. That water could be discharged to a stream source, from which it would then move on and eventually out of the area. The arrangement to allow the water to return to the surface water system was used only as a last resort. He said the inadvertent transfer of water from another basin after beneficial use was not prohibited.

Mr. Marvel agreed discharged water could be reused for irrigating crops. He said another beneficial use would be to use the water for wildlife. Such use of water would guarantee it would not be totally lost after mine dewatering.

Doug Bierman, representing Humboldt River Basin Water Authority (HRBWA), was the next to testify in support of the proposed legislation and the proposed amendment presented by Eureka County. He explained he had an additional amendment (Exhibit G), which further clarified subsection 4 of section 1 of the measure and strengthened S.B. 108 in regard to protecting the interests of HRBWA. It would ensure applications for mine dewatering, which in some cases may technically not be an application for interbasin transfer, yet could result in discharges into surface water systems, essentially resulting in an interbasin transfer of water. The state engineer would evaluate applications, which would not be approved unless applicants worked toward minimizing water discharges into surface systems. The desired results would be less water evaporation and lowered flood hazards.

Chairman de Braga expressed surprise at receiving Senate legislation in an Assembly committee that still required over seven proposed amendments. She asked Mr. Bierman if he was aware of a reason for that occurrence. Mr. Bierman said the Senate had not fully developed appropriate language to address all the concerns of involved entities, which surfaced only shortly before the deadline to release legislation from the house of origin.

Mr. Hettrick said he had a problem with the proposed amendment because it placed a condition on the permitting process requiring the state engineer to determine the technical feasibility of various methods for managing interbasin water transfers. Many proposed techniques for alternative beneficial uses for discharged water had already been deemed technically unfeasible as described in the proposed amendment of HRBWA. He said he could accept the proposed amendment of HRBWA if the last three items were deleted. In place of the eliminated language, Mr. Hettrick suggested stating until every practical avenue for recharged secondary use or storage had been explored. The entire procedure had to be followed by applicants anyway to guarantee everything had been done to avoid draining the basin from which the water was drawn. Once that requirement had been met, he pointed out, the resulting activity, such as mining, would be operating and the techniques employed would have to be practical.

Mr. Bierman said he was receptive to Mr. Hettrick’s suggestions. He said the position of HRBWA was if most requirements were voluntarily followed, the state engineer and NDWR would be satisfied. The final effort would be to place all proposed language into law.

Mr. Carpenter said Mr. Hettrick’s opinions satisfied most of his concerns; however, he still opposed the proposed amendments. He said dry years could happen anytime, which could adversely affect the environment subjected to interbasin water transfers. Water would be needed to irrigate crops and at that point, technically feasible methods would become unimportant.

Chris Weiss, representing Southern Nevada Water Authority, testified in support of the measure. He said the agency he represented supported the legislation as written.

Joe Guild, representing Newmont Gold Company, testified as a proponent of the proposed legislation. Newmont Gold Company was engaged in most of the state’s recent mine dewatering projects. He did not support the proposed amendment of Eureka County in any form. Mr. Guild said he had not seen the proposed amendment offered by HRBWA, but judging from what he heard about it, he considered it completely unnecessary. Mr. Guild agreed with Mr. Hettrick that an amendment was not needed if it merely restated preexisting requirements and procedures currently being followed by the state engineer. NDWR followed mandated procedures required for issuing temporary mine dewatering permits; therefore, no additional language was needed. He said section 8 was included in the proposed legislation because it excluded mine dewatering from the definition of an interbasin transfer. The remaining criteria was followed by the state engineer when considering permits for both interbasin transfers and mine dewatering, which was a temporary permit for the use of water. Mr. Guild said mine dewatering was the most scrutinized of all beneficial use applications.

Mr. Goicoechea returned to the witness table to express his support for the mining industry. He said his county appreciated mining and what it contributed to the state and wanted his support of the industry on record.

Linda Eissmann, Legislative Counsel Bureau policy analyst, presented the committee with a handout that reviewed pertinent issues regarding the proposed legislation (Exhibit F).

Chairman de Braga suggested returning to the issue at a later date. She said additional time was needed by all concerned entities to allow them to formulate appropriate language for proposed amendments. She closed the hearing on S.B. 108 and opened the hearing on S.B. 344.

Pamela Wilcox, Administrator of Nevada Division of State Lands, testified in support of the proposed legislation. She explained the measure was an agency measure and a trailer to a measure passed in the 1997 Legislative Session. She said the measure was needed as a form of housekeeping to correct an error, which was not caught until the session was over. S.B. 344 would correct the statement mineral interests can be purchased from the state at the fair market value of the royalty. Ms. Wilcox said that was not correct because if an individual was purchasing a mineral interest from the state it had to be at the fair market value of the mineral interest. The proposed legislation would correct the faulty language by replacing the word royalty on line 10 with the word mineral interests.

Ms. Eissmann presented the committee with a handout (Exhibit H), which provided background information on the proposed legislation.

The Chairman asked if there were additional questions or comments and there were none. She called for a motion. Mr. Marvel asked if the motion should be do pass and Mr. Bache suggested the motion be do pass and place on consent calendar.

The Chairman closed the hearing on S.B. 344 and opened the hearing on S.B. 166.

Mr. Carpenter said the measure was necessary because members of the board of agriculture currently convened July 1, 1999, which did not leave them enough time to prepare for local county fairs. The proposed legislation would allow the members to convene in January rather than in July, thereby allowing for more continuity in office as well as providing more time for county fair responsibilities.

Chairman de Braga asked if the measure would make any other changes, to which Mr. Carpenter responded in the negative.

Mr. Bache asked if the fiscal year would also be changed under the new legislation. The Chairman said the proposed legislation stated the measure would be effective at the end of the first fiscal year. The measure was an county fair issue.

Mr. Carpenter explained the fiscal year went from the first of July to the end of June the following year, which was the same as how the county’s fiscal year revolved. County commissioners would have to approve the arrangement for the agricultural board. The proposed legislation would allow for the entire system to operate on the same timeline.

The Chairman called for additional questions and comments. Ms. Eissmann presented the committee with a short summary of the proposed legislation (Exhibit I). Chairman de Braga called for a motion.

There being no further business before the committee, the hearing was adjourned at 4:03 p.m.

RESPECTFULLY SUBMITTED:

Sharon Spencer,

Committee Secretary

APPROVED BY:

Assemblywoman Marcia de Braga, Chairman

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