The Committee on Natural Resources, Agriculture, and Mining was called to order at 1:40 p.m., on Wednesday, May 19, 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

Assemblywoman Vonne Chowning, District 28

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

After roll was called the Chairman called for approval of committee minutes March 15, 17, 22, 24, 29, and 31 as well as committee minutes April 3, 5, 6, 7,and 9. She called for a motion on approving minutes.

Chairman de Braga opened the hearing on S.J.R. 1.

Assemblyman John Marvel, Assembly District 34, spoke in support of the proposed legislation. He explained he was presenting the measure for Senator Rhoads who was busy in the Senate Committee on Natural Resources, which he chaired. Mr. Marvel read Senator Rhoads’ prepared statement (Exhibit C). The prepared testimony stated S.J.R. 1 urged Congress to appropriate money for, or transfer land to, counties in Nevada that had received insufficient payments under the Federal Payments in Lieu of Taxes (PILT) Act. The resolution explained land managed by the Federal Government in Nevada was not taxable; therefore, Nevada counties having an extensive amount of federally controlled land experienced significant fiscal burdens. The resolution further pointed out Congress had provided PILT payments to compensate local governments for revenue that had been lost, the amounts of which were insufficient.

Mr. Marvel, continuing to read from Senator Rhoads’ prepared statement, explained PILT payments helped local governments carry out vital services such as firefighting and law enforcement. The concept of land in lieu of PILT was first introduced to the Legislative Committee on Public Lands at its meeting in Ely in June 1998. Lincoln County officials presented the committee with a resolution expressing support for land in lieu of PILT that was included as part of Lincoln County’s Public Land Management and Use Plan. It noted there was insufficient money to pay local governments their legal allocation based on the amount of federally managed land within Nevada’s rural counties. The public lands committee decided the concept was a worthwhile approach to the PILT program and decided to support the concept through the proposed legislation.

Robert Hadfield, Executive Director of National Association of Counties (NACO), said he concurred with Mr. Marvel and the statement of Senator Rhoads regarding the PILT, which was a federal program designed to offset the costs to counties providing services in areas dominated by federal land. The appropriation was made annually, it was not an entitlement program, and it was subject to annual reappropriation. Mr. Hadfield said the process was an ongoing struggle of fighting with Congress to put the funds for the program into the budget. It had never been fully funded since its inception in 1976 and it was always short of funding. Nevada had the most publicly held lands in the country; however, it was not one of the larger recipients for PILT funds due to the formulas used to determine appropriations.

Mr. Hadfield said the proposed legislation provided the Federal Government with another way of reimbursing Nevada without fully funding the PILT program by allowing the Federal Government to release land from federal ownership, which could be placed back into private ownership, thereby providing a broader tax base to help finance needed public services. S.J.R. 1 was good legislation, he explained, and he was going to present the concept as model legislation for all western states. He urged the committee to support the proposed legislation.

Chairman de Braga asked if PILT funds were inadequate for all recipients across the board or only for some regions. Mr. Hadfield explained a certain amount of funds for the PILT program were appropriated, which were dispersed in amounts determined by the formula. Because the formula was not fully funded, all recipients were short-changed similarly regardless of size or remoteness.

Mr. Neighbors provided the committee with a breakdown of PILT funds disbursement as determined by the applied formula (Exhibit D). He said it had been many years since he worked with the program but considered the handout valuable information for the committee.

The Chairman asked if the handout provided information as to how much Nevada should have received in PILT funds. Mr. Hadfield explained there were two formulas the Federal Government used: 1) If a state had extensive acreage and minimal population, the formula used was for acreage; and 2) If a state had extensive population and minimal acreage, the formula for population was used.

Chairman de Braga pointed out the summary of the measure used by the Senate explained a University of Nevada study concluded that Lincoln County in 1998 received $215,000 and should have been allocated $415,000. She asked how PILT formulas determined how much land would be allocated in place of money. Mr. Marvel explained the proposed legislation was only a resolution, determining the amount of land allocated would be formulated later by Congress.

Mr. Mortenson asked how it was determined who should get what amounts of land or money. Mr. Hadfield explained since the original act was authorized, Congress never fully funded the program. If it had, the program would not have experienced annual deficits. Mr. Mortenson asked if it was possible states could sue the Federal Government for failing to provide sufficient funds. Mr. Marvel said that issue was at the heart of the Sagebrush Rebellion. Mr. Mortenson asked if there was an approximate equation to determine if federally owned land was instead held by private entities who paid taxes on the land, how would that amount compare with what the federal act determined Nevada should receive. Mr. Hadfield said tax rates differed between various entities and the way the formula worked. Most of the funds went to populated counties rather than to rural, sparsely populated areas with massive acreage. NACO had returned to Congress repeatedly to request additional revenues by explaining the inequities.

Mr. Hadfield continued to explain the problem was there were different categories of land. The way land was valued varied according to who was doing the evaluating. Until land was adequately evaluated, the tax rate could not be properly applied. At the time of the original enactment, it was generally agreed that payments resulting from the applied formula would be fair compensation for offsetting cost incurred by local governments absorbed to provide services to people living on federally owned land on which taxes were not paid. Mr. Mortenson said from the information provided, the payments in lieu were roughly 50 percent of what would have been fair.

Mr. Hettrick said the issue was critical to small counties. If the land was transferred back in an amount equal to the amount of taxes owed, small counties could sell or lease the land, or whatever they wanted. That would enhance local economies immensely. He said it was a good resolution and deserved the support of the committee.

Mr. Hadfield explained he was leaving soon to attend an out-of-state national conference of counties associations and would appreciate the full support of the legislature for the measure. Mr. Marvel agreed that would have been optimal and it was unfortunate the proposed legislation did not receive the appropriate attention sooner.

Mr. Neighbors said Nevada, along with much of the west that had an enormous percentage of its land owned by the Federal Government, was getting short-changed because the program was applied throughout the nation. It was particularly troubling that a state such as Virginia who came into the program under the Equal Footing Amendment was receiving disproportional payments considering the Federal Government did not have extensive land holdings there.

Mr. Carpenter said he had worked with Elko County commissioners to develop the formula for payment in lieu of taxes for the program rather than wait for land to be returned to rural counties. He said he had received some criticism for promoting the policy because some felt the land should have been returned instead. Mr. Carpenter said it was necessary to receive revenues for services provided because the rural counties needed more immediate compensation.

Linda Eissmann, policy analyst for Legislative Counsel Bureau, presented the committee with a work document reviewing the proposed legislation (Exhibit E).

The Chairman asked if there were additional questions or comments and there were none. She called for a motion.

The Chairman closed the hearing on S.J.R. 1 and opened the hearing on

S.J.R. 10.

Assemblyman Marvel, Assembly District 34, spoke in support of the proposed legislation. He explained he was presenting the measure for Senator Rhoads who was busy in the Senate Committee on Natural Resources, which he chaired. Mr. Marvel read Senator Rhoads’ prepared statement (Exhibit F). The prepared testimony stated S.J.R. 10 urged Nevada’s congressional delegation to introduce and support legislation providing for the disposal of certain public lands in Nevada. The resolution urged Congress to enact a law modeled after the Southern Nevada Public Lands Management Act of 1998 that would apply generally to the remainder of the state.

The Southern Nevada Act was approved in the fall of 1998 and identified 27,000 acres of Bureau of Land Management (BLM) lands in the Las Vegas Valley that could be sold. The land sale was estimated to generate approximately $1 billion, a portion of the proceeds of which would stay in Nevada with 85 percent going to the BLM for use in part for the purchase of environmentally sensitive land. Another 10 percent would be applied to the Southern Nevada Water Authority (SNWA) for capital improvement projects and infrastructure needs. The remaining 5 percent would be provided to the state of Nevada for educational purposes in the State Distributive School Account.

Mr. Marvel explained if the measure was approved, Senator Reid and Congressman Gibbons’ legislation would allow the BLM to dispose, through sale or auction, over 1 million acres of land already identified in Resource Management Plans (RMPs) as being better suited for private or local government use outside the realm of the Federal Government. A list of lands suitable for disposal was included in Exhibit F.

Mrs. Segerblom asked what environmentally sensitive areas, other than Lake Tahoe, would be affected by the proposed legislation. Michael Stewart, Legislative Counsel Bureau senior research analyst, responded to the question. He stated the goal of the Public Lands Committee was to enter into consultation with state and local governments to help identify appropriate lands for sale or auction.

Chairman de Braga asked how specific acreage was determined. Mr. Stewart said appropriate lands and the amount of acreage were identified in the RMPs. The BLM identified lands that would benefit from being taken out federal management and placed into either private ownership or under local governments. The Chairman asked how the proceeds of the sales or auctions would be divided. Mr. Stewart explained 5 percent would go to education, 45 percent would go to local governments, and the remaining 50 percent would go to BLM and into a special account to cover the cost of the land exchange.

Pamela Wilcox, Administrator of Division of State Lands, was the next proponent of the proposed legislation to testify. She said her agency had worked closely with the BLM and Clark County local government on the implementation of the Southern Nevada Public Land Management Act on which the current legislation was modeled. Ms. Wilcox explained S.J.R. 10 was the most positive approach to the issue to be developed. It was necessary that lands be available to local governments and to the private sector for many years. The approach was particularly successful because the Federal Government as well as the public had identified lands appropriate for the program and were in agreement.

Ms. Wilcox said the measure had only recently been introduced in Washington, D.C., therefore the details had not all been determined as yet. Five percent of the revenues would go to Nevada for education. That amount was fixed because the Enabling Act, included in the state’s constitution to allow Nevada to become a state, granted 5 percent of the revenues received from the sale of federal lands to go into the state’s economy and into the permanent school fund.

Mike DelGrosso, Deputy Administrator Division of State Lands, concurred with Ms. Wilcox’s testimony.

Mr. Hadfield returned to the witness table to express his support of the proposed legislation.

Joe Johnson, representing the Toiyabe Chapter of the Sierra Club, said his organization supported the proposed legislation as well as the particular acreage identified for sale or auction.

Chairman de Braga pointed out land close to Las Vegas had great commercial development potential and therefore there was greater benefit to local governments than land in rural counties that might not have marketing potential. She asked if local governments had the first opportunity to purchase lands designated for sale. Mr. Johnson responded in the affirmative.

Mr. Carpenter asked if Mr. Johnson had a problem with the distribution schedule established by Congressman Gibbons. Mr. Johnson said that was an area of discussion that was under review. He said he had no firm position on the matter; however, it was noteworthy that was an area for future consideration. Mr. Carpenter said he understood the measure sponsored by Congressman Gibbons allocated 5 percent of the revenues for education. He said the formula in that measure was very good. Mr. Johnson replied his organization did not have all the information regarding the formula. He expected counties would use the revenues more for planning and acquisition than for infrastructure or health care.

The Chairman asked if Lake Tahoe had been included in the legislation. Mr. Johnson said he did not see Lake Tahoe in the original legislation. He considered the issue of the purchase of environmentally sensitive lands would remain an issue to rural areas of the state.

Mr. Carpenter said Lake Tahoe was specifically mentioned in the Southern Nevada Lands Act. He said the Gibbons legislation gave a definition of environmentally sensitive lands, but there was nothing specific in the measure regarding Lake Tahoe.

Ms. Eissmann presented the committee with a work document on the proposed legislation (Exhibit G).

The Chairman asked if there were additional questions or comments and there were none. She called for a motion.

ASSEMBLYWOMAN PARNELL MOVED TO ADOPT S.J.R. 10.

The Chairman closed the hearing on S.J.R. 10 and opened the hearing on S.B. 167.

Daryl Capurro, representing Nevada Mass Transit Association, was the first speaker to testify in support of the proposed legislation. He explained the measure was the product of a combined effort between his agency and the Nevada Highway Patrol (NHP), who administered and enforced the Hazardous Materials Permit Program under the direction of James Rhode. No amendments or changes had been made to the hazardous materials laws for a decade; however, several federal acts had been passed in that time. One such federal act in which Nevada had become actively involved was the Alliance Program, which had an international registration plan governing hazardous materials throughout the world.

Mr. Capurro explained the intent of the Alliance Program was to create uniform laws and regulations throughout the states that would help manage and handle the transportation of hazardous materials throughout the country. Many changes had been made in the proposed legislation that would bring Nevada in compliance with federal laws regarding hazardous materials. The measure granted NHP enforcement tools and the power to adopt regulations regarding hazardous waste transportation. S.B. 167 allowed all the revenue allocated to the program into the highway fund and to budget the State Emergency Response Commission’s administrative costs directly from the highway fund.

James Rhode, Program Manager of the hazardous materials program of the Nevada Highway Patrol, was the next to testify in support of the proposed legislation. He explained the Alliance Program offered Nevada the opportunity to perform administrative reviews to determine the credentials and safety records of motor carriers applying for permits to transport hazardous materials prior to transportation on the state’s highway system. Mr. Rhode urged the committee to support the measure.

The Chairman asked how the permits were presently issued. Mr. Rhode explained currently the process was review of the application submitted by the motor carrier. After review of safety records, inspections of equipment, and credentials checked, the permit would be granted.

Mr. Mortenson asked how funding for the permitting process would change from the current process under the new legislation. Mr. Capurro pointed out the old funding established in 1989 under Nevada Revised Statutes (NRS) 459.710 was 80 percent of revenues collected from permit fees went into the highway fund and from there appropriations were made to the agencies responsible for enforcement and administration, which was NHP. The remaining 20 percent went into a contingency fund for hazardous materials controlled by the Emergency Response Commission. The agency operated on those funds combined with federal grant money. The new arrangement would replace the current 80/20 split and put the total revenues generated from permit process into the highway fund to finance the operational costs of the Emergency Response Commission. Mr. Capurro added he anticipated an amendment to the proposed legislation, to which his agency had no objection.

Assemblywoman Vonne Chowning, District 28, came to the witness table to extend her support of the proposed legislation and submit an amendment to the measure (Exhibit H). The "friendly" amendment made various changes to regulations that governed fireworks as detailed in NRS 477.030. It stated the state fire marshal must adopt regulations relating to various types of fireworks that a local government regulated. The types of fireworks the state marshal would regulate were detailed in section 3.1 of standard 87-1 of the "Standard for Construction and Approval for Transportation of Fireworks, Novelties, and Theatrical Pyrotechnics" of 1993 as adopted by the American Pyrotechnics Association (Exhibit I).

Ms. Chowning said the reason she was asking for the amendment to be included in S.B. 167 was because the measure dealt with hazardous materials and the state fire marshal was in agreement with the issues presented in the proposed amendment. She said she did not believe the State of Nevada should allow for use of those types of items that burned properties and injured people.

Ms. Ohrenschall said she was in agreement with Ms. Chowning and commended her for her work on the amendment. She explained she lived in an area of Las Vegas that experienced near catastrophic fires due to July Fourth celebrations that included fireworks.

The Chairman asked if there were additional questions or comments and there were none. She called for a motion.

The Chairman closed the hearing on S.B. 167 and opened the hearing on

S.J.R. 12.

Michelle Gamble, representing NACO, was the first to testify in support of the proposed legislation. She explained the measure was introduced by Senator Jacobsen at the request of her organization. The resolution encouraged Congress to support all efforts to establish and maintain working partnerships between federal land management agencies, local governments, and other affected parties on issues relating to the use of public lands in Nevada. The resolution also urged Congress to put special emphasis on reviewing issues relating to livestock grazing on public lands.

Ms. Gamble pointed out S.J.R.12 encouraged the Nevada Division of Agriculture to develop a statewide database to further demonstrate the impact of losses of Animal Unit Months (AUMs) to the state and counties. The proposed legislation would be sent to the federal land management agencies indicating the livestock industry was important to Nevada and a partnership with all concerned entities regarding issues relating to grazing on public lands in Nevada was necessary to maintain the viability of the state’s rural economies (Exhibit J).

Don Henderson, Deputy Administrator of Division of Agriculture and rangeland specialist, was the next proponent of the proposed legislation to testify. He provided the committee with a handout (Exhibit K), which demonstrated public land grazing trends in Nevada. Mr. Henderson explained approximately 45 percent of public lands in Nevada surveyed to date had revealed a combined grazing reduction of over 340,000 AMUs over the past 18 years. In that context, an AUM equated to one cow and her calf grazing on public rangeland for 1-month. The documented reduction was estimated to have resulted in an annual monetary loss of $12.3 million in affected rural economies and a one time loss in property value of $12.8 million to the affected livestock operations. Those studies further estimated that there would be a loss of 167 full-time jobs associated with the documented decline in economic activity.

Mr. Henderson believed much of the recent decline in public land grazing could be attributed primarily to increasingly restrictive federal regulation. Also significant was an ongoing trend where federal land management agencies were reluctant to invest in public land resources through range improvement projects and work cooperatively with involved ranchers to address resource issues on a site-specific basis. Mr. Henderson pointed out the proposed legislation suggested a statewide public land grazing trend study and economic analysis be conducted to demonstrate the cumulative losses to the state and counties associated with on-going reductions in public land grazing. His testimony was included in its entirety in Exhibit L.

The Chairman asked what would happen if funding was not available for the study. Mr. Henderson explained alternative funding sources would have to be sought such as grant money from counties and grazing boards. However, that delay would be counter-productive.

Mr. Marvel asked if money set aside for the Livestock Commission, which had been established through passage of S.B. 310 during the 1999 legislative session, could be used for the study. Mr. Henderson said it was possible but would also contribute to a delay in the study, which would take approximately one and one half years to complete. It was his agency’s goal to complete the study prior to the 2001 Legislative Session.

Doug Busselman, Executive Vice President of the Nevada Farm Bureau, was the next to testify in support of the proposed legislation. He explained S.J.R. 12 was intended to help establish a working partnership between federal land management agencies, local governments, and other concerned entities relative to issues regarding the use of public lands. In recent years there had been a number of conflicts. The Farm Bureau had attempted to use a number of conflict-based approaches to resolve differences concerning public land grazing use issues. A working partnership with the Federal Government and all other parties involved in the issue was critical to maintaining healthy rural economies in Nevada. Mr. Busselman said his organization also supported scientifically valid analysis of rangeland conditions with an emphasis on enhancing resource conditions, such as focusing on future goals. The proposed legislation would facilitate a working partnership as established through scientific research.

Benny Romero, representing the Carson District Grazing Board, explained his organization fully supported the proposed legislation. He said the number of vacant allotments, along with grazing land reductions throughout the State of Nevada, had created drastic economic conditions as proven by a current study conducted to document the situation. Federal land management agencies continued to impact numbers of AUMs grazing on public lands. Endangered species listings continued to expand, which were being used as a tool to promote livestock grazing reductions.

The use of scientific information for evaluation was needed today more than ever, Mr. Romero continued. He stressed the need for consistency between federal land agencies and all concerned parties was of vital importance and should be required before final determinations were made concerning management of public lands. Mr. Romero urged the committee to vote in favor of the proposed legislation.

Mr. Carpenter said similar problems also occurred on private lands; however, on private lands it was possible to remedy the problem of land reductions by scientific determination and proper arbitration. There were proven techniques in place for private land discussions and the proposed legislation should apply those techniques to public grazing land discussions. The Assemblyman said the measure was a good resolution.

Ms. Eissmann presented the committee with a summary of the measure (Exhibit M).

The Chairman asked if there were additional questions or comments and there were none. She called for a motion.

There being no further business before the committee, the hearing was adjourned at 3:25 p.m.

RESPECTFULLY SUBMITTED:

Sharon Spencer,

Committee Secretary

APPROVED BY:

Assemblywoman Marcia de Braga, Chairman

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