The Joint Subcommittee on Public Safety / Natural Resources / Transportation of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman Lawrence E. Jacobsen, at 8:10 a.m., on Thursday, February 11, 1999, in Room 2134 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

SENATE COMMITTEE MEMBERS PRESENT:

Senator Lawrence E. Jacobsen, Chairman

Senator William R. O’Donnell

Senator Joseph M. Neal, Jr.

ASSEMBLY COMMITTEE MEMBERS PRESENT:

Ms. Chris Giunchigliani, Chairman

Mrs. Vonne S. Chowning

Mr. Richard D. Perkins

Mr. Bob Price

Mr. John W. Marvel (Excused)

STAFF MEMBERS PRESENT:

Millard Clark, Committee Secretary

OTHERS PRESENT:

STATE DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES

CNR Administration - Budget Page CNR–1 (Volume 3)

Budget Account 101–4150

Peter G. Morros, Director, State Department of Conservation and Natural Resources, stated this department was created in 1957. It consists of eight divisions and includes two programs as well as 11 boards and commissions. Most of the boards and commissions are advisory, but there are three regulatory commissions, the Board of Wildlife Commissioners, the State Conservation Commission, and the State Environmental Commission. The air operations of the Division of Wildlife and the Division of Forestry were consolidated and were reorganized into the Director’s Office for administrative purposes only. Mr. Morros said Freeman K. Johnson, Assistant Director, State Department of Conservation and Natural Resources, was designated the person responsible for the administrative oversight of the air operations. Mr. Johnson was also assigned responsibility for the administrative oversight of the Commission for the Preservation of Wild Horses and the development of the statewide Wild Horse Management Plan, which has been completed and submitted to the printer. This plan was due back from the printer in time for submittal to the Legislature by the required March 1, 1999 date.

Mr. Morros indicated that about half of the $150,000 appropriated during the 1997 legislative session ($75,000 in both fiscal years 1998 and 1999) for the development of the statewide Wild Horse Management Plan would be reverted.

Mr. Morros said the director’s office provides administrative oversight, sets the goals and objectives, and provides technical, budgetary, and overall supervisory oversight for the various divisions and programs within the department. The department budget also contains the contract money for the State Climatologist position. The director’s office has 15 classified and 2 unclassified positions. The budget request includes a request for two additional positions in the accounting area. The two positions are an Account Clerk II, which will be assigned to the Division of Forestry office in Elko, and an Accountant Technician II for the Carson City office to handle the increased workload from the Division of Water Resources. Mr. Morros said both of these positions are General Fund positions and are necessary because of the increase in workload. He discussed the need for the Aircraft Mechanic position included in both the Division of Forestry and the Division of Wildlife budgets. The two divisions will share the cost of the Aircraft Mechanic position on a 50/50 basis. The savings that will be realized by having an Aircraft Mechanic position on staff will more than cover the cost of the position, Mr. Morros maintained.

Mr. Morros said there were a couple of position changes he wanted to discuss. He was recommending that the Property and Equipment Supervisor be transferred to the Division of Forestry budget. The Equipment Supervisor’s primary responsibility is keeping track of the equipment in the Division of Forestry. Mr. Morros also recommended transferring the Management Assistant I position from the Division of Forestry to the director’s office. This position is being utilized primarily for accounting and financial management support. The position would be more efficient in the director’s office, Mr. Morros stated.

Mr. Morros discussed Exhibit C, a Schedule of Cumulative Revenue vs. Expenditures and Litigation Expenses. Exhibit C summarizes the past appropriations and expenses of the water resources litigation fund beginning in 1973 and continuing through December 31, 1998. This fund is used to pay for the cost of defending the state’s interest and positions in various litigations related to water resources. Mr. Morros said that initially a request for additional funds was submitted every session to the Legislature. Since the 1987 Legislative Session the expenses have been reduced and requests for additional funds are submitted only every other legislative session. It is very hard to predict litigation expenses, Mr. Morros remarked. He noted there are about a dozen litigation cases pending in federal court, some which will go through the Ninth Circuit Court in San Francisco to the United States Supreme Court. He said these cases can be very expensive, but there is no way to predict the outcome or expenses. Mr. Morros said he tries to keep about $200,000 in the litigation fund. The litigation fund had $137,198.28 at December 31, 1998. The department does not anticipate needing additional funding for the next four years.

Senator Jacobsen asked whether the department was experiencing any problems working with the 11 boards and commissions. Mr. Morros replied no, the boards and commissions were all very active. The seven-member Advisory Board on Natural Resources was created as a result of the reorganization in 1993, when three boards and commissions were eliminated. The Advisory Board on Natural Resources has been effective in helping set the department policy, Mr. Morros said. Senator Jacobsen asked for a list of the boards and commissions and their members.

Senator Neal asked to whom the department had submitted its organizational chart. Mr. Morros replied the organizational chart had been submitted with the expanded narrative but said he would also get one to Senator Neal.

Freeman K. Johnson, Assistant Director, State Department of Conservation and Natural Resources, introduced himself and discussed the air operations of the department. The air operation consists of three rotary and three fixed-wing aircraft. All of these aircraft are kept in the Minden facility. As a result of the consolidation, all aircraft were moved from Stead, where the Wildlife aircraft were kept, to Minden. There are two hangars at the Minden facility, one for the Division of Forestry and one for the Division of Wildlife. The department had four rotary-wing aircraft; two were assigned to the Division of Forestry but one was lost in an accident at Watson Lake a few years ago. The department has been working with the military surplus property program to replace the aircraft that was lost in the accident, without success. Mr. Johnson said he has submitted a narrative to Dave Pursell, Program Analyst, Fiscal Analysis Division, Legislative Counsel Bureau, describing the efforts taken to replace the lost aircraft.

Senator Jacobsen asked whether there was any action the joint subcommittee could take to help with the replacement of the aircraft. Mr. Johnson replied the department has written to Senator Richard H. Bryan, United States Senate, who has indicated he would help procure one of the surplus aircraft that have been identified from several different sources around the country. The department has also enlisted the support of the Governor, who has indicated he will speak with Senator Harry Reid, United States Senate, and Representative Jim Gibbons, United States House of Representatives, to get their support to free up a replacement aircraft. The Department of Defense is taking most of the decommissioned military aircraft to be used by drug interdiction programs. This makes getting prime aircraft, those with low hours and that have not been in combat situations, very difficult, Mr. Johnson remarked.

Senator Jacobsen said it would be a good idea for the joint subcommittee to take a tour of the air operations of the department. He said it is important because the dispatch center for all of the agencies is located in Minden also. Mr. Johnson replied the department would be pleased to conduct the tour. He also invited the committee to ride along on a game survey flight to allow the committee members to see the aircraft operation.

Senator Jacobsen asked about the wild-horse program. He said the wild-horse issue had become an emotional issue of concern for all Nevadans. Mr. Morros said that both the Commission for the Preservation of Wild Horses and Catherine Barcomb, Administrator, Commission for the Preservation of Wild Horses, State Department of Conservation and Natural Resources, had done a good job in putting together a management plan. The management plan contains recommendations that attempt to address the wild-horse problem; however, the authority and jurisdiction over the wild horses on public lands is mainly with the Bureau of Land Management (BLM). The management plan only submits recommendations and suggestions to BLM identifying possible ways to improve the management of the wild horses. Mr. Morros stated the management of wild horses has been, and will continue to be, controversial.

Senator Jacobsen said that while he was on the Public Lands Committee with Senator Rhoads, he visited six or seven rural communities and the number one issue that was discussed was the wild horses.

Senator Neal asked why there were no performance indicators for the State Department of Conservation and Natural Resources. Mr. Morros replied the performance indicators of the various divisions are the performance indicators of the department. There are no performance indicators for the department; the various divisions’ performance indicators combine to become the department’s performance indicators. The department provides administrative oversight to the divisions, Mr. Morros explained.

Senator Jacobsen stated that accountability, late billing to the Division of Forestry and others for fires, had been a problem in the past and the Legislature had approved additional staff during the past session. Mr. Morros replied the fire suppression and emergency response activity problems identified in a Legislative Counsel Bureau (LCB) audit have all been corrected. The Legislature did authorize the Division of Forestry to acquire funds to pay its bills with the understanding the funds would be paid back. The funds were paid back timely. The accounting procedures, internal controls, and financial management improved substantially for the fire suppression, emergency response fund.

Senator Jacobsen said that very shortly an audit identifying the amount of money owed to the state would be completed. The senator was concerned about the amount of money owed to the department. Mr. Morros said the collections for the department were current.

Senator Jacobsen asked about the necessity of the Aircraft Mechanic position being requested. The senator also said there was some concern expressed about using the inmates at the Minden facility during the summer to work on the aircraft. Mr. Johnson replied the inmates do not perform mechanical services on the aircraft. They do scrape bugs off the wings and propellers and clean the aircraft, but they do not perform any mechanical services.

Senator Jacobsen asked about the surplus of spare parts. Mr. Johnson said there are many spare parts. The inventory of spare parts was not a source of concern at this time; the labor required to install the parts when needed was a concern. The department estimates savings of approximately $35,000 yearly by hiring a full-time mechanic to perform the mechanical services required for the aircraft. Mr. Johnson said there are 100-, 200-, and 300-hour inspections needed for the aircraft. Aircraft service companies that charge $50 to $68 an hour perform these inspections. A 100-hour inspection requires up to 40 hours of service time to complete. A 300-hour inspection requires 130 to 150 hours of service time to complete. At $50 to $68 an hour, it does not take long to pay for the cost of the full-time aircraft mechanic’s salary if there is an active fire season, Mr. Johnson noted.

Mr. Johnson commented the department has been hampered by the loss of one of the Division of Forestry helicopters. All of the service requirements for the Division of Forestry have been cut in half until the department is able to secure a replacement helicopter. When the replacement helicopter is received, the savings will be substantial, Mr. Johnson said. With the new aircraft mechanic position the service requirements can be done in-house as opposed to ferrying the aircraft to Stockton, California and paying the per diem and salary for a two- or three-day stay while the aircraft is being serviced. Mr. Johnson said the department would not be able to totally eliminate all of the external service requirements; there are services needed that require highly specialized personnel and equipment the department does not have. The department anticipates a substantial savings if it is able to fill the aircraft mechanic position and provide the services by using one of its own staff members. Senator Jacobsen asked whether there was any liability incurred when the aircraft was lost and whether there were any injuries. Mr. Johnson replied there was no liability and no injuries.

Ms. Giunchigliani asked what "substantial savings" meant and what the savings was predicted to be. Mr. Johnson replied the savings would be realized by using staff labor to make aircraft repairs. There would be no savings realized on parts. The parts would have to be paid for regardless of who performed the repairs. Ms. Giunchigliani asked what percentage or dollar amount of savings was projected. Mr. Johnson said the department spends an average of $91,000 a year on service and it is anticipated the cost of an aircraft mechanic will be $56,000 a year for both salary and benefits. The difference between the projected cost of $56,000 and the projected expense of $91,000 is $35,000 yearly. Ms. Giunchigliani said certain services might still have to be performed that the staff mechanic cannot do. Mr. Johnson replied that the services which might be required that the staff mechanic could not perform would be major unforeseen repairs resulting from an accident. The staff mechanic would be airframe-and-power-plant-certified by the Federal Aviation Administration. That would be a requirement of the position.

Ms. Giunchigliani asked whether it is possible to hire someone with those qualifications for the projected $56,000 a year. Mr. Johnson replied it is. Ms. Giunchigliani said she is concerned the expense of the staff position could be more than anticipated, resulting in less savings. Mr. Johnson said he is also concerned with that possibility. Mr. Morros said the savings projected were based on the aircraft the department currently has. That is one aircraft short; the department is hoping to replace this aircraft from military surplus. The $91,000 projected expense would be higher once the replacement aircraft is obtained.

Ms. Giunchigliani inquired whether spare parts would be available for the replacement aircraft. Mr. Morros replied the department has a major inventory of parts that were acquired from excess military surplus. The department has approximately $6 million in aircraft parts. This is not all of the parts that will be needed but is the majority of what will be needed. Mr. Morros said that, for example, the department has 25 engines at the Minden facility, which is more than will be needed for many years. Ms. Giunchigliani asked, ‘When do we stop storing all of these parts that may not be needed?" Mr. Morros replied those replacement parts for the aircraft used by the department may not be in production when the part is needed so it is important to have a supply of spare parts. Ms. Giunchigliani noted that even though the spare parts were valued at $6 million, the department did not pay $6 million for the parts.

Mr. Johnson said part of the effort to acquire replacement helicopters involves the effort not only to acquire one replacement helicopter for the one lost in the Watson Lake incident, but also to acquire two others, one of which would be kept in Elko during the fire season. This would avoid the time, expense, and wear of ferrying the aircraft back and forth between Elko and Minden when responding to wildfire and lightning strikes in Elko. The other helicopter would be kept at Minden and cannibalized for spare parts.

Ms. Giunchigliani asked for clarification about the number of helicopters being acquired and where the money for the additional helicopters was included. Mr. Morros replied the department is attempting to acquire three additional helicopters. One will be cannibalized for spare parts, the other two will be operational. Of the latter, one will be based in Elko during the fire season to avoid having to ferry aircraft between Elko and Minden, and the other one will be based at the Minden facility. The pilots will be required to travel between Elko and Minden but that will be less expensive than flying the aircraft to and from Elko and Minden. Ms. Giunchigliani asked in which budget category the funding for the helicopters is included. Mr. Morros said the aircraft would hopefully be acquired at no cost. The only expense will be to ferry the aircraft from where they are located to the Minden facility. Ms. Giunchigliani asked whether the resources to acquire the helicopters and get them to Minden are in the current budget. Mr. Morros replied they are.

Senator Jacobsen asked about the inventory of department equipment other than spare parts and whether a complete inventory is maintained. Mr. Morros stated the department maintained an up-to date equipment inventory.

Ms. Giunchigliani asked for clarification of the Water Resources Litigation Fund. Mr. Morros replied this has been funded by one-shot appropriations. Mr. Morros discussed Exhibit C, a schedule of cumulative revenue vs. expenditures, budget account 101-4203 titled Water Resources Legal Costs. This budget account is not included in The Executive Budget. Mr. Morros explained that the funding has historically been one-shot funding. Exhibit C identified the appropriations and expenditures beginning in 1973. Mr. Morros said the budget will be amended to include budget account 101-4203 (Litigation Fund) as a line item in the adjusted base of the director’s office, CNR Administration, Budget Account 101-4150.

Mike Nolan, Principal Budget Analyst, Budget Division, Department of Administration, explained that in the past the appropriation for litigation was in a separate bill and was included in budget account 101-4203, the Water Resources Litigation Fund. At the request of the Governor, an amendment to the budget was prepared that added $200,000 to category 12 of the budget for the director’s office, budget account 101-4150. Category 12 will be the litigation category. Mr. Nolan said a work program will be prepared at the end of Fiscal Year (FY) 1999 that will transfer the money remaining in budget account 101-4203 to the director’s office budget, account 101-4150. Ms. Giunchigliani questioned why the change needed to be made. She clarified that category 12 was being created in the budget for the director’s office, budget account 101-4150, which will contain all litigation money. She asked whether this is being done to more accurately reflect the status of the litigation funds. Mr. Nolan replied the Governor felt that having this funding in a separate budget account did not truly reflect what was being requested. Ms. Giunchigliani stated she preferred to keep the litigation fund separate so it would be clear what the money was being used for, rather than include it in the base budget.

Mr. Johnson said the conversation with the Governor identified that it is known and predictable there will be litigation expenses, but the extent of the expense is not known. He said that including the funds in category 12 of the director’s office budget (101-4150) will accurately reflect the cost of doing business in the correct budget. He asserted that to consider this funding to be a one-shot appropriation is unrealistic when in fact there will be a cost for litigation each biennium. To call this one-shot funding as opposed to including it in the base budget would understate the budget requirements for the director’s office. Ms. Giunchigliani asked whether the additional money would need to be taken from the other department budgets if the money appropriated for litigation is not enough. Mr. Johnson replied the $200,000 for litigation expenses is what was identified as needed now and was requested as a one-shot appropriation. Ms. Giunchigliani stated she was concerned that including the litigation funds in the director’s office budget could create problems in future legislative sessions.

Mr. Morros said Assembly Bill (A.B.) 151 does include the $200,000 appropriation.

Ms. Giunchigliani suggested that A.B. 151 not be withdrawn, just set aside until a decision is made on the budget request. Mr. Morros said he is confident that if this request is approved for the requested $200,000 appropriation, no additional funding would be needed for at least four years and possibly longer.

Senator Jacobsen noted that aircraft do require periodic inspections that are determined by the flight hours.

STATE DEPARTMENT OF CONSERVATION AND NATURAL RESOURCES

Division of Conservation Districts – Budget Page CNR-39 (Volume 3)

Budget Account 101-4151

Pamela B. Wilcox, Acting Administrator, Division of Conservation Districts, State Department of Conservation and Natural Resources, said the Division of Conservation Districts is a small agency which oversees a statewide grassroots resource conservation program and works with 27 locally elected conservation districts on programs of soil and water conservation. These projects include range improvement projects, river stabilization projects, agriculture production increases, and erosion control activities. The State Conservation Commission, which is both a policy-making and a regulatory commission, oversees the operations of the Division of Conservation Districts.

Ms. Wilcox stated the Division of Conservation Districts has two professional positions and one clerical position. The clerical position is shared between two half-time positions. The budget request includes increases for inflation and workload. The increase includes money for publications, an e-mail hook-up, and training for staff. The training also includes refresher cardiopulmonary resuscitation (CPR) classes for the staff. Ms. Wilcox said there is a small request for increasing the property and contents insurance. She also requested $5,000 for each of the state’s 27 local conservation districts; this would allow the continuation of the grant program. She was requesting authorization to accept donations to increase the informational outreach by improving the newsletter. The budget also includes a request to replace and upgrade the telephone system, which is being shared with the Division of State Lands. Ms. Wilcox also requested a new cellular phone for each of the professional positions.

Senator Jacobsen asked what the strength of the 27 conservation districts is. Ms. Wilcox replied the strength is that the 27 districts are local. Each district has a locally elected board of five members plus a representative from the county, and if there is a city in the district, a representative from the city. Senator Jacobsen asked whether there are any districts in the state that are not functioning. Ms. Wilcox said there are a few districts that are weaker than others. As an example, she said the district in Esmeralda County, where there is so little private land, will have difficulty fielding a board. There are ongoing discussions about whether that board should consolidate with the adjacent Nye County district. Another example was the district in northern Washoe County, called the Bayou District, where the population base is very small. Ms. Wilcox said these are the only types of problems the program has because it is such a grassroots type of program. The Division of Conservation Districts works closely with these conservation districts to try to assist them in developing the leadership skills needed and to evaluate whether they wish to continue with separate districts or consolidate with larger and stronger districts that are adjacent to them.

Senator Jacobsen asked whether a letter from the subcommittee expressing concern and encouraging the conservation districts to be active and represent the concerns of their districts would be of benefit. Ms. Wilcox replied that the support of the Legislature has been very important to the districts, and any indication the legislative support is continuing and that legislators care about the programs would be appreciated.

Senator Neal asked for a brief description of the relationship between the districts and the BLM. Ms. Wilcox replied the major federal agency the districts work with is the Natural Resources Conservation Service (NRCS), which was previously called the Soil Conservation Service. She said there is a long traditional partnership between conservation districts and the federal conservation service. They work very closely together. The conservation service provides technical services. Many districts have cooperative agreements with BLM and the U.S. Forest Service and get involved with conservation work on federal lands. Working with federal agencies is not the primary thrust of district programs, Ms. Wilcox noted; the primary thrust is providing services to private landowners. Senator Neal asked whether there is a state group called the State Conservation Commission. Ms. Wilcox replied there is. The State Conservation Commission is a policy-making and regulatory board. Senator Neal asked what the function of the State Conservation Commission is in relation to the districts. Ms. Wilcox replied there are regulations in place that set up the grant program and the program that requires districts to regularly develop work plans and budgets and submit reports to the commission on a continuing basis. These reports keep the commission informed what the districts are doing and awards grants only to districts that are in good standing under the regulations.

Senator Jacobsen asked whether there are any problems with staff and whether there is adequate space for the staff. Ms. Wilcox said the space currently occupied is adequate and the addition of the professional position last session was very much appreciated. There are now two professional people that are very busy all over the state. One-half of the time of one of the professional positions is spent in the Tahoe Basin, primarily helping put together erosion-control projects.

DIVISION OF STATE LANDS

State Lands – Budget Page CNR-45 (Volume 3)

Budget Account 101-4173

Pamela B. Wilcox, Administrator and State Land Registrar, Division of State Lands, State Department of Conservation and Natural Resources, said that in addition to the base budget, there were several maintenance and enhancement items. She said the budget includes a request to increase the staffing available to care for the properties acquired under the first Tahoe Bond Act. Approximately 500 parcels were acquired. Ms. Wilcox said it seems that for the last several legislative sessions Senator Jacobsen has asked her whether additional forester assistance could be obtained. This budget request includes that additional assistance. It provides an additional seasonal forester and .4 full-time equivalent (FTE) of an additional Land Agent II. This request increases a 60 percent Land Agent II position to full-time and is funded by the Tahoe Regional Planning Association (TRPA). There will now be a Land Agent II and a seasonal forester to help take care of these Tahoe Bond Act parcels.

Ms. Wilcox discussed several items needed because of caseload increases, rent being the largest item. She said the Division of State Lands is very overcrowded and has been unable to increase the office space as more people have been added. The budget also includes an increase to implement e-mail capability and a data entry contract to load data into the computer system being implemented during FY 1999. Ms. Wilcox stated the budget also includes Occupational Safety and Health Administration (OSHA) training to comply with the mandated safety program. She discussed the request for an Environmental Scientist III position. She said the position would be funded entirely by interest from the second Tahoe Bond Act, commonly know as Question 12. This position will work primarily in an interagency cooperative nature, developing stream and wetlands restoration projects. This is one of the biggest needs in the Tahoe Basin and one of the areas in which there is no staff expertise, Ms. Wilcox stated.

Ms. Wilcox asked the joint subcommittee how she should address the remainder of the Tahoe Initiative. She asked whether the subcommittee wants her to prepare and present a multi-agency presentation on the Tahoe Initiative during the next meeting with the Tahoe Regional Planning Association (TRPA) and the Nevada Tahoe Regional Planning Agency (NTRPA). Senator Jacobsen replied that she should prepare and give the presentation.

Ms. Wilcox noted the budget request includes a request for both replacement and new equipment. The replacement equipment consists of a variety of small items such as fax machines, calculators, chairs, a cellular phone, a camera, four computers and a large item, the telephone system. Ms. Wilcox said the new equipment being requested also consists of a variety of small items, including file cabinets, bookcases, a television, and a web server.

Ms. Giunchigliani asked whether there are any restrictions regarding leasing the Southern Nevada Correctional Center (SNCC) prison site in Jean either to the federal government or anyone else. Ms. Wilcox replied there are two deeds for the land that the Jean prison was on. Most of the facility is on land acquired from a private party. That portion of the title is totally unrestricted. The restrictions on the federal portion are restrictions that come with all recreational, public purpose land. The state is restricted from converting the land to another use without the BLM’s approval. The state could not sell the land to a private party. There are restrictions that must be researched and discussed with the BLM to ensure that future plans for the prison are acceptable to that agency. Ms. Giunchigliani asked that Ms. Wilcox prepare a one-page document identifying the restrictions to the Jean prison land. Ms. Wilcox replied she had already prepared and submitted that information to Legislative Counsel Bureau (LCB) staff but offered to provide additional information if it is needed.

Ms. Giunchigliani asked what the Division of State Lands does to maximize benefits from State School Trust Lands and how sound land-use planning is promoted. She noted there were a number of planning assistance projects included in the performance indicators. She asked whether the planning assistance projects were from rural areas asking for assistance in developing plans. She also asked about the meeting of the State Land Use Planning Advisory Council. Ms. Giunchigliani shared that the reason she was probing is that the state does have an absolute role as a policy director within the area of land-use planning. She said that while she was not trying to usurp local government authority, the state has an obligation to make sure local plans do conform environmentally, to ensure proper use of land, and to be involved in issues that concern population, conservation, and air quality. She asked what role the state really has in these areas, and whether the Division of State Lands has the necessary authority and staff to accomplish its goals.

Ms. Wilcox replied state law specifies that state land-use planning assistance is given to local governments only upon request and that control of land-use planning lies with the local governments. The Division of State Lands does have a program of providing technical assistance; however, it has been traditionally requested by and provided to rural governments which do not have sufficient planning staff of their own. The division has developed many master plans, zoning plans, zoning maps, and subdivision ordinances, and has conducted many training sessions in the rural areas. Ms. Wilcox said the Division of State Lands does not normally get requests from the urban areas and, without being requested, cannot go into a local area.

Ms. Giunchigliani said if the state is charged with establishing a land-use plan, it should make sure the local government plans conform to the state plans. Ms. Wilcox said there is no state law establishing a statewide land-use plan. Land-use plans are local. Ms. Giunchigliani noted there is no state plan like the state water plan that was developed; there is no statewide plan to provide guidance for local governments to ensure they are properly developing property around state land to ensure there is no negative impact on conservation and the environment. Ms. Wilcox answered the Division of State Lands does interface when state land is located in a local community; occasionally, zoning changes are needed. The division works with local governments on uses of state land, she said.

Ms. Giunchigliani noted that if the local government were adopting a land-use plan locally, there could be some state impact. She conjectured it is likely the local government would not work with the state to coordinate the land use. She said it is important for everyone to work together to ensure that all plans fit together properly. Ms. Wilcox responded there is a natural resources plan being developed by the State Department of Conservation and Natural Resources that will address many resource-conservation needs on a statewide basis. Given the strong statutory language that land use planning is exclusively a matter under local control, she said, it is not expected the Division of State Lands will get involved with anything but the most general goals. She said that if it is the Legislature’s intent the state more closely oversee local government planning, the Legislature will have to enact that by statute because it has not been the direction given in the past.

Ms. Giunchigliani asked for clarification of "maximizing the benefits from State School Trust Lands." Ms. Wilcox replied the state received trust lands at the time of statehood. These lands were granted for a variety of purposes but primarily for the support of common schools. These trust lands were traded back to the federal government in 1880 for approximately 2 million acres of land that would be selected where the state wished the land to be. The problem was that trust lands, or "lands in place," cannot be taken until they are surveyed, and Nevada, at the time of statehood, had mostly not been surveyed; so those lands were not useful to the state. Virtually all of those lands were sold during the nineteenth century. There are approximately 3,000 acres of this land remaining with the state. It is the charge of the state to make sure these lands are sold for as much money as possible, with the proceeds of the sale going to the Permanent School Fund. Ms. Giunchigliani asked whether there is a restriction on the use of the proceeds from the sale of the land. Ms. Wilcox replied the money from the sale of this state land simply goes into the Permanent School Fund.

Senator Jacobsen asked about the Geographic Information System (GIS) and requested an update on the progress of implementing the system. Ms. Wilcox said GIS was partially but not fully operational. Some base maps have been acquired and some mapping has been done, but there is still a lot of work to do before the GIS is fully operational.

Senator Jacobsen inquired how much money is in the Tahoe Bond Fund. Ms. Wilcox replied that the second Tahoe Bond Fund is $20 million; $10 million of that was sold and is generating interest. She said the projections for interest to be earned are made very conservatively. The interest earnings will be used to pay for the Environmental Scientist position, the Tahoe Coordinator position, the half-time Conservation position, and a .25 FTE Tahoe Wildlife position. The rest of the interest earned will be applied to the grant in the Tahoe Basin.

Senator Neal asked when the mission statement for the Division of State Lands was last revised. Ms. Wilcox replied the executive branch agencies had a strategic planning process meeting during the FY 1997-99 biennium and both the mission statement and the performance indicators were revisited at that time. The performance indicators included in the budget request were updated, as well as the mission statement. Senator Neal noted the mission statement did not identify what the responsibilities of the Division of State Lands are in terms of overall state responsibilities. Ms. Wilcox said it was not her intent to imply the mission statement did not reflect what the overall state responsibilities are. The mission statement says the Division of State Lands is maximizing benefits from State School Trust Lands, which is being done.

Senator Neal asked how the Division of State Lands is maximizing benefits from State School Trust Lands. Ms. Wilcox replied there are fewer than 3,000 acres of State School Trust Lands left. Most of this land is in rural areas. There are two parcels that have considerable value. The Division of State Lands is discussing these parcels with local governments in Carson City and in North Las Vegas. The division is attempting to get the local government in Carson City to amend its Master Plan and increase the value of the parcel in Carson City. Both of these parcels will be sold at auction when they reach maximum value. The division monitors all school trust lands on a rotating basis, trying to find any opportunity possible to generate revenues from them.

Ms. Giunchigliani asked Ms. Wilcox to send the joint subcommittee the 1987 or 1989 appraisal that had been prepared for the Sierra property, for which the Distributive School Account (DSA) has never been reimbursed. She asked what the dollar amount is and if there is any plan for the state to reimburse the DSA for the cost of the appraisal. Ms. Wilcox said she would send that information.

Mrs. Chowning asked about the one-shot appropriation for $210,000 to create an integrated and automated database and how much of the 1.7 million-document backlog this appropriation will allow the Division of State Lands to process. Ms. Wilcox explained that the number given for historic records is the total number of all the historic records. There is a tremendous volume of these documents. The documents are now safe because they are in a climate-controlled vault. The Division of State Lands has an ongoing program of steaming the old folded documents so they can be unfolded and placed in acid-free file folders to be stored in metal file cabinets rather than the old wooden file cabinets. These documents include original hand-drawn maps, which are being copied using advanced photography techniques; the original document is then laminated and shipped to the State Archives. The historic number represents all of the old documents in storage. Ms. Wilcox said the funds being requested for the data entry contract will allow continued data entry into the database system being created. That system is for the current land records.

Senator Jacobsen asked whether the storage of all the records hinders the operational capabilities. Ms. Wilcox replied, "Not at all." She explained that the records are used on a continuing basis.

Mr. Nolan clarified that the Environmental Scientist III position was budgeted to start in October 1999. At the request of the Division of State Lands an amendment was submitted which adds $15,715 of Tahoe Bond interest to enable the division to start the position July 1, 1999, because of the short field season in the Tahoe Basin.

DIVISION OF WATER PLANNING

Water Planning – Budget Page CNR-126 (Volume 3)

Budget Account 101-4161

Naomi Smith Duerr, State Water Planner, Division of Water Planning, State Department of Conservation and Natural Resources, distributed Exhibit D, a two-sided handout titled "Flood Program Facts," and Exhibit E, a three-page budget overview.

Ms. Duerr stated the mission of the Division of Water Planning is to provide technical, financial, and educational assistance and information to decision-makers, agencies, and the public about state, regional, and local water supplies. Chapters 540 and 349 of the Nevada Revised Statutes (NRS) are the authorizing statutes for the Division of Water Planning. The division has 10 staff and two budget accounts, 101-4161 and 101-4155.

Ms. Duerr discussed Exhibit E, which summarizes the various programs of the division. The State Water Plan is the biggest and contains the most important projects. The Division of Water Planning is directed by the Legislature to develop a state water plan. Assisting in that task are the 15-member Advisory Board on Water Resources Planning and Development and the State Department of Conservation and Natural Resources steering committee, which includes all of the administrators and the director of the department. These entities provide oversight and direction in development of the water plan. Ms. Duerr said the Division of Water Planning has involved the public and local governments in the development of the water plan. She herself has held workshops and made presentations to the county commissions in Nevada and the Southern Nevada Water Authority in Clark County. The Division of Water Planning has held more than 50 workshops and presentations on the plan over the last few years to obtain public input. Last week the Public Review Draft was mailed. Ms. Duerr said each member of the joint subcommittee should have received a blue 100-page summary of the Public Review Draft.

Ms. Duerr said one of the biggest issues discussed in the water plan is data management. It has been very difficult for the Division of Water Planning to get reliable data. The division has had to create extensive databases internally that could be used later by others. Gathering usable data and using the data for additional research on water issues was one of the most significant recommendations in the water plan, Ms. Duerr said.

Ms. Duerr stated the Division of Water Planning provides assistance to local governments with water planning. During the past year, the division has assisted White Pine County, Elko County, and Washoe County in developing their regional water plans. The Division of Water Planning focuses on rural counties that request assistance or information. Ms. Duerr said the 1997 Legislature funded a new flood program. This flood program was in response to the severe flooding in northern Nevada that cost between $600 million and $1 billion in damages in five counties. Much of the flood program is offset with federal funds, but there is a significant portion that is supported by State General Fund revenue.

Ms. Duerr said the point of the flood program is to assist local governments in developing their own flood plans and developing their own capability. There is a compliance aspect to the flood plan, which is to make sure that if the local government has a flood ordinance, it is actually implementing the ordinance and not granting variances that allow people to live in the flood plain. The Division of Water Planning also provides grants through the flood program. Each year approximately $100,000 is received from the federal government to be passed through to local governments to help them relocate or elevate structures out of the flood plain and to help the local governments develop their own flood plans. Ms. Duerr said the Division of Water Planning is working on a state flood plan that is a separate component of the state water plan, and a state flood handbook; both should be developed by the next legislative session.

Ms. Duerr said people have been asking about the worth of the state flood plan. Some of the accomplishments of the flood plan are identified in Exhibit D and Exhibit E. She stated that in six months the Division of Water Planning responded to approximately 200 requests for information and assistance from local governments, which demonstrates there is a demand for the flood program and information. Ms. Duerr said that to get a federally backed loan, if one is in a flood zone, one needs flood insurance. The only way to get flood insurance is if the county or city of residence is part of the National Flood Insurance Program. The only way the local government entities can be part of that program is to maintain their ordinances.

Ms. Duerr said that recently the Division of Water Planning was able to intervene on behalf of Churchill County, Lyon County, and the city of Fallon, all of which had received 60-day letters of suspension from the National Flood Insurance Program. They were on the verge of losing their flood insurance, which means people could potentially have lost their mortgages or could have been required to refinance through other types of private lenders. The Division of Water Planning was able to intercede with the Federal Emergency Management Agency (FEMA) and develop ordinances for the counties to get them off the suspension list.

Ms. Duerr noted another function of the Division of Water Planning is to provide training to the local governments. She said she has held workshops for local officials on how to perform flood protection and flood mitigation.

Ms. Duerr noted that several years ago, the State Department of Conservation and Natural Resources began development of a State Natural Resource Plan. The department was plagued with the problem of hiring the planner. During the last legislative session Ms. Duerr provided information about the history of those problems. Since that time she has been able to hire an excellent planner who was willing to work for the state even though it meant a significant reduction in salary for him. The planner has begun developing the natural resource plan with assistance from a technical working group in the department. The technical working group includes members from all of the divisions and agencies within the State Department of Conservation and Natural Resources. The purpose of the natural resource plan is to develop, analyze, and inventory all of the state’s natural resources including water, land, air, forest, parks, or recreational resources in one comprehensive plan. All of the divisions and agencies in the State Department of Conservation and Natural Resources have their own individual planning efforts. Ms. Duerr stated it is important to have all of these plans tied together and integrated to eliminate duplication and avoid gaps in coverage.

Ms. Duerr noted the program on watershed planning for the Walker River Basin is funded through federal funds. The program on water education was funded with $20,000 during the last legislative session, enabling the Division of Water Planning to get over $100,000 in additional federal grants for the water education program. A $20,000 grant from the Bureau of Reclamation for southern Nevada to fund a Water Education coordinator position was recently received.

Ms. Duerr said the Grants to Small Water Systems program is assisted by a five-member Board for Financing Water Projects. During the last legislative session that fund was increased from $25 million to $40 million. Approximately $20 million in grants have been awarded, and an additional $5 million in requests have been received.

Ms. Duerr stated there are no new programs being requested and no new positions are being requested in this budget. She said the Division of Water Planning is asking that the General Fund pay for half of an existing position which deals with the administrative and financial workload that has developed. She stated the funding for the Division of Water Planning consists primarily of General Fund revenue but also includes some fee revenue and federal grants.

Ms. Duerr said the funding request in the maintenance portion of their budget was primarily to keep up with the workload. She said the Division of Water Planning is responsible for the development of the State Water Plan and remarked it is important to get the plan printed and distributed, which requires additional printing and postage money. The Division of Water Planning budget included small increases for inflation and for operating expenses. The budget request included small increases in the In-state Travel and the Computer Services and Training categories.

Ms. Duerr explained that the enhancement portion of the budget request includes approximately $32,000 for new and replacement equipment. The budget request includes a computer server to deal with the increased demands created by the Integrated Financial System (IFS) being installed by the state and increased usage of the Internet home page, and to replace some of the old computer equipment. The budget request also includes the transfer of a .5 FTE position into the General Fund to assist with the increased accounting and administrative functions.

Ms. Giunchigliani asked whether there were budget requests or legislation submitted to implement the various plans that had been developed. She inquired, "Is there anything not in your budget request that should also be considered?" Ms. Duerr replied it was her intention to provide the Legislature with the State Water Plan, the State Natural Resource Plan, and the Flood Assistance Plan for review before proposing the implementation of the plans. As the planning process progresses, there will be recommendations presented to the next legislative session to implement these plans. Ms. Duerr said the cost of the plans would need to be evaluated on a case-by-case basis depending on how the recommendations are implemented. For example, one recommendation states that perhaps the Division of Water Planning should consider expanding the Grants to Small Water Systems program to include not only existing water systems that are out of compliance with state or federal regulations, but also other systems. Ms. Duerr noted that Fernley has a lot of people on domestic wells, there is no water system, and the town is not eligible for funding from the Grants to Small Water Systems program. She asked whether the Legislature wants to broaden the Grants to Small Water Systems to include these people. Including these people would not necessarily cost more but it would be a change in policy, Ms. Duerr stated.

Ms. Giunchigliani asked whether the State Water Plan could force cities or counties to start using meters. Ms. Duerr replied the State Water Plan makes a strong recommendation on water measurement and metering. The Division of Water Planning has not identified the cost of implementing a metering program, it would depend on the type of water system that is in place locally. Ms. Duerr said one area the division is trying to identify is agricultural water use. Agricultural water use represents approximately 75 percent of total water use. Many agriculturists measure their water in an indirect way. They do not measure return flows, and if it is not known how much is being returned, it is difficult to identify the actual usage.

Ms. Giunchigliani inquired whether the Division of Water Planning knows "how much benefit is received through revenue for domestic product from agricultural water use." Ms. Duerr replied that traditionally agriculture and irrigation have been a basic underpinning of Nevada. She noted this state has developed through agriculture and mining. She stated the state economist may be able to identify the net product that is brought into the state as a result of agricultural water use, and added that gaming is clearly the state’s biggest revenue generator. Ms. Giunchigliani said she thought the revenue for domestic product was 4 to 6 percent. She said there is an argument, as the water planning issue is considered, that there is no gain in exchange for the true loss of a natural resource, considering what comes back into the state financially. She asked Ms. Duerr whether the joint subcommittee needs to take time to review the State Water Plan to identify the issues, or whether there might be a summary the subcommittee should review to identify the highlights which should be considered when planning for the future. Ms. Duerr referenced a 100-page summary that had been sent to the Legislature.

Ms. Giunchigliani said there were two issues that concerned her. One was the data management, the second was the issue of interbase and intercounty transfers. Ms. Duerr responded there have been a number of recommendations made; all of the recommendations for the plan are contained in the 100-page summary. She continued by saying that amongst the planning goals that were established by the Advisory Board on Water Resources Planning and Development is the goal of economic efficiency. The advisory board stated that the preferential use of water for greatest economic gain to the state should be considered. Ms. Duerr said the advisory board spent a lot of time discussing what that really meant. For example, does the statement "the preferential use of water for greatest economic gain to the state" mean the gain is to the state, a regional area, local government, or an individual? How is the benefit of the water used measured? Ms. Duerr stated that the goal of preferential use of water is in conflict with many other goals such as goals for environmental quality and conservation. She remarked, "You could not meet all of these goals."

Mrs. Chowning inquired whether the Division of Water Planning has assisted homeowners in Blue Diamond in the Mountain Springs area of Clark County as well as homeowners in the northern part of the state. She stated that because of the lack of water in the Clark County Mountain Springs area, insurance policies are very expensive or the homeowners are not able to get policies at all. As a result, the mortgage company will not allow a mortgage on the property. Ms. Duerr replied the Division of Water Planning had been able to help these people through the Grants to Small Water Systems program. Grants were given to Blue Diamond, Kyle Canyon, and Mayfield water users in the Henderson area. The Mayfield water users had a small water system that stopped working; they had very bad water quality. Everyone had to stop using wells and get connected to the water system. Ms. Duerr said there have been a number of places in Clark County that the Division of Water Planning has been able to work with.

Senator Jacobsen asked whether the program is accepted universally throughout the state. Ms. Duerr replied that water is one of the most sensitive issues in Nevada. Because of the local sensitivities the Division of Water Planning has tried to work very closely with the local governments and be sensitive to their issues, and find niches where the division can be of assistance. Ms. Duerr stated the Division of Water Planning has worked very hard in developing the State Water Plan.

Senator Jacobsen wondered whether the Division of Water Planning has looked into less expensive ways to print and distribute documents from that office. Ms. Duerr replied the Division of Water Planning had explored posting the water plan on the division’s Internet home page. That will require the additional purchase of some software. If the water plan could be posted on the Division of Water Planning’s home page, it could be downloaded any time it was needed. Ms. Duerr said that when the water plan was mailed the Division of Water Planning was able to work with the state mailroom to identify ways to reduce the postage required. One of the ways identified was using a third-class book-rate postage for the water plan that reduced the mailing cost by one third and increased the delivery time by only one or two days.

DIVISION OF ENVIRONMENTAL PROTECTION

Environmental Protection Administration – Budget Page CNR-9 (Volume 3)

Budget Account 101-3173

Allen Biaggi, Administrator, Division of Environmental Protection, State Department of Conservation and Natural Resources, stated that the mission of the division is "to protect and enhance the environment of the state consistent with the public health and enjoyment, the propagation and protection of terrestrial and aquatic life, the operation of existing industries, the pursuit of agriculture, and economic development of the state." Mr. Biaggi said no new positions are being requested. The Division of Environmental Protection (DEP) is funded almost exclusively with federal dollars and with fees. The division has a staff of 177 in two offices; the main office is in Carson City and the smaller office is in Las Vegas.

Mr. Biaggi stated the Division of Environmental Protection, budget account 101-3173, is the administrative unit of the division. This unit supports the agency for the office of the administrator, fiscal operations, and personnel services. It also staffs the State Environmental Commission and manages a regulatory assistance program which provides outreach services to small business in regulated industries and the Small Business Assistance Program (SBAP).

Mr. Biaggi said the Division of Environmental Protection has a relatively complicated budget scheme within the agency for fees and federal grants. He stated that fiscal accountability is critical and therein lies the importance of this budget account to the agency. Mr. Biaggi said this budget account (101-3173) supports 21 employees and is funded through an indirect cost rate of 25 percent, which is assessed to the salaries and fringe benefits of all of the other EPA budget accounts. The budget request includes a transfer of three information services positions, a Management Analyst II and two Management analysts I’s, together with associated costs, from budget account 101-3187.

Mr. Biaggi noted that the maintenance portion of the budget request includes increases for travel. This includes travel for Mr. Biaggi to attend meetings of the Environmental Council of the States, which meets twice a year. The Environmental Council of the States is a group of state environmental directors who discuss issues pertinent to all of the states where ideas can be shared on how better to do business. Mr. Biaggi said the travel requested also includes national meetings that the SBAP staff should attend. Regarding increased travel for the safety coordinator, Mr. Biaggi said safety is a prime concern when the department is dealing with biological and chemical issues. There is also a request for minor expansion of the Small Business Assistance Program to provide more information and services to small business and industry. Mr. Biaggi noted there was a request to add additional operating expenses for the SBAP for information outreach and dissemination.

Mr. Biaggi said the enhancement requests in this budget include the replacement of office equipment such as chairs, telephones, fax machines, and typewriters. All of the programs include a computer-replacement schedule of 25 percent. This budget request includes upgrades for printers, personal computers, and software for the entire Division of Environmental Protection. Mr. Biaggi noted that a satellite dish system to receive informational education on environmental issues and other activities was also requested.

Ms. Giunchigliani asked whether the Department of Information Technology (DoIT) has reviewed the 25 percent replacement plan for computers and computer-related equipment. She also asked what is driving the 25 percent replacement plan, what is the age of the equipment, and whether the equipment has not been updated for a while. Mr. Biaggi replied that in compliance with the budget instructions, the request for new and updated computer equipment has been sent to DoIT for review. His understanding was that DoIT is very busy, has a large role to fulfill, and has not had time to review everything; accordingly, DoIT has agreed to some of the requests but not all of them. The Division of Environmental Protection has had the same replacement schedule for the past two legislative sessions; the equipment is in good shape and relatively new. Mr. Biaggi stated that both the hardware and the software constantly need upgrades to maintain compatibility with the computer systems of people he interfaces with at federal agencies and other state agencies. He said it is a constant battle to stay current with new technology and standards, and because of this he implemented the 25 percent replacement schedule. Computers no longer needed are offered to others in the State Department of Conservation and Natural Resources and then to other state agencies.

Ms. Giunchigliani asked whether, when the request for review was submitted to DoIT, an explanation of the 25 percent replacement schedule was included. Mr. Biaggi replied the data needs and how the interfacing is performed are included in the request for review to DoIT. Ms. Giunchigliani requested that a list of the surplus equipment and the age of the equipment available be supplied. Mr. Biaggi said he was just reminded that DoIT has reviewed and accepted the 25 percent replacement schedule. Senator Jacobsen asked how the Division of Environmental Protection interfaces with California. The senator’s experience had been that not enough communication occurred between counterparts in other states. Mr. Biaggi replied that from an environmental perspective, California and Nevada could not be more different. California has very stringent requirements from an environmental standpoint and oftentimes goes well beyond federal requirements. In contrast, Nevada stays primarily with federal requirements and takes a more pragmatic attitude towards environmental regulation. On "the water side," the interaction is primarily with the Lahontan board because that is the water quality control board that borders most of the interface between Nevada and California. On air issues Nevada does consult with California because oftentimes there are transport issues related to air pollution across state lines. There are also issues at Lake Tahoe and other border sites. In general, the California counterparts are known but there is not a lot of day-to-day interaction. As issues come up the department does not know whom to contact and how to interface with them, Mr. Biaggi said.

Mr. Morros added that the State Department of Conservation and Natural Resources has had a good working relationship with California’s counterpart to Nevada’s Division of Water Resources. One of the problems the State Department of Conservation and Natural Resources has had with California over the years is that California has no groundwater law. It has no uniform statewide groundwater law, he explained, and the problems have been with the groundwater basins that Nevada shares with California. Nevada is controlling the development of the resource on the Nevada side but California has no controls on the California side, Mr. Morros stated.

Mrs. Chowning asked for an explanation of the drop in small business assistance and information service contacts from 378 contacts in Fiscal Year (FY) 1998 to a projected 250 in each year of the 1999-2001 biennium. Mr. Biaggi replied that the Division of Environmental Protection had been diligent in making the outreach efforts to business and will continue to do so. The Small Business Assistance Program that is included in this budget is only one component of the total outreach efforts. There is also a contract with the Small Business Development Center at the University of Nevada, Reno (UNR). It is anticipated some of the contact activity will be shifted to UNR. As this occurs the contact counts will not show in the Division of Environmental Protection’s number of contact counts, they will be shown as contacts by UNR. Mr. Biaggi stated the Division of Environmental Protection will continue its outreach to the communities, and it is anticipated there will be an exponential increase in contacts.

Ms. Giunchigliani asked, "What do you assist the small business with?" Mr. Biaggi replied that environmental regulations are very complicated. The Division of Environmental Protection educates the small business owner or operator in understanding what the environmental regulations are and how to comply with them, and then UNR will go into the business to prepare an audit identifying areas of deficiency. People want to comply with the regulations but sometimes the regulations are so difficult that the business owners or operators need help understanding them, Mr. Biaggi remarked. Ms. Giunchigliani asked whether there is a similar program in the southern and rural areas of Nevada. Mr. Biaggi said the program is statewide and the Division of Environmental Protection is working with the hazardous waste problems in southern Nevada. Ms. Giunchigliani asked whether the Division of Environmental Protection assists in selecting sites for business. Mr. Biaggi said that assistance is provided and there is assistance available to identify what the liabilities would be if environmentally contaminated property were purchased. The Division of Environmental Protection assisted with the location of a prison in Las Vegas, he noted.

Senator Jacobsen stated there was recently a discussion about high-hazard haze. The senator asked whether things like high-hazard haze impose any additional requirements on the Division of Environmental Protection. Mr. Biaggi said that would be discussed during the next budget presentation.

DEP Air Quality – Budget Page CNR-14 (Volume 3)

Budget Account 101-3185

Mr. Biaggi stated the mission of the Bureau of Air Quality is "to achieve and maintain levels of air quality which will protect human health and safety, prevent injury to plant and animal life, prevent damage to property, and preserve visibility and scenic, esthetic and historic values of the state." This program has a staff of 30. The Bureau of Air Quality does not regulate air quality in Clark or Washoe Counties. By statute, those counties operate their own programs through the health districts. The State of Nevada permits 461 facilities and operates 21 air quality monitors throughout the state. The funding of this program is from fees, federal grants, and a revenue transfer from the Department of Motor Vehicles and Public Safety, Inspection and Maintenance Fund.

Included in the maintenance portion of the budget request is a new program for the implementation of regional haze, Mr. Biaggi continued. The request is for $80,312 for each year of the biennium. This is a federally mandated program and the cost of the program is supported by federal funds. The regional haze issue deals with visible air quality impacts to Class 1 areas; the Class 1 area of primary concern in regional haze in Nevada is the Jarbidge Wilderness Area. Also included in the maintenance portion of the budget are projected caseload increases of 8.33 percent for FY 2000 and 12.53 percent for FY 2001. Those caseload increases are based upon population projections contained in the budget instructions. Mr. Biaggi further discussed the maintenance portion of the budget, noting the additional out-of-state travel for coordination with federal land managers to discuss prescribed burning activities, which is another big issue for the air quality program during the next few years. In-state travel is needed for additional fieldwork and inspections. Increased operating funds will be needed to address the cost of air quality monitoring supplies, printing, postage, and litigation expenses. Increased travel to conduct training on prescribed burning activities will also be needed. Upgrades to the air quality database and the air quality models are needed.

Mr. Biaggi said the enhancement portion of the budget request includes the replacement of miscellaneous furniture, air monitoring equipment, and the 25 percent computer inventory replacement. A new van is being requested for conducting air quality sampling during FY 2000, at an estimated cost of $23,480.

Ms. Giunchigliani noted Clark County was not doing a very good job of monitoring air quality. She asked what role the state could play in addressing the lack of air quality compliance and whether the Bureau of Air Quality has reviewed Clark and Washoe Counties’ air quality programs. Ms. Giunchigliani said the companies "just paid extra for the emissions." Mr. Biaggi replied the program is called the Emissions Trading Program. There have been requests to the State Environmental Commission, which oversees the program, to do one of two things in regard to the program in Clark County: declare it adequate, or declare it inadequate. Just last year the State Environmental Commission evaluated the Clark County program and determined it is adequate, Mr. Biaggi continued. The commission provided direction to the Bureau of Air Quality to review some of the audits that have been performed on the Clark County program. Mr. Biaggi said Bureau of Air Quality Chief Jolaine Johnson has reviewed the audits and provided input to the State Environmental Commission. Mr. Biaggi said there have been evaluations of the Clark County program by the state.

Ms. Giunchigliani asked whether the Bureau of Air Quality looks at the program in Clark County as a contributor to the air quality problem even though the program itself is considered adequate. Mr. Biaggi replied the requirement of the State Environmental Commission is to evaluate the program on a gross basis, over the entire program. Clark and Washoe Counties are both delegated directly by the federal Environmental Protection Agency (EPA) to operate their programs. The federal EPA is working with Clark County and the public in that county to address the issues of concern, and also with the health district to reach solutions to the problems.

Ms. Giunchigliani asked why, within the urban counties, there are still exemptions for areas where there has been an increase in traffic. Mr. Biaggi replied the state is divided into airsheds, which are similar to watersheds. When those airsheds "become impacted" and begin to violate ambient air quality standards, controls are put in place in an attempt to control the emissions. In outlying areas, which still have relatively good air quality, Mr. Biaggi noted, these controls have not been put into effect. Ms. Giunchigliani stated, "We need to be looking at prevention rather than waiting until it becomes a problem."

Senator Jacobsen asked whether the State Environmental Commission is functioning smoothly. Mr. Biaggi replied the State Environmental Commission members are "quality people" with considerable expertise who are interested in the issues that face Nevada. He said the commission members always seem to have the wisdom to strike a balance between environmental protection and the pursuit of business, industry, and agriculture. The State Environmental Commission is well attended by all of its members; it is an exceptional board to work with, Mr. Biaggi stated. Senator Jacobsen said one of the major issues is automobile emissions. He said it may be necessary to reexamine the smog issue again. The senator asked what standards Colorado has for air quality. Mr. Biaggi said some major concerns with the regional-haze requirements are that smog transcends state boundaries. This is a regional issue; the smog is being transported in from other areas. It was EPA’s responsibility to address many of these issues, Mr. Biaggi stated. That has not been done, and consequently there is a concern at the Bureau of Air Quality about progressing with the regional-haze requirements.

Senator Neal asked why there was no data from FY 1998 for the ratio of the tons of air pollutants, inventoried by type of pollutant, amount and location, to the source of the total estimated pollutants emitted in Nevada. Mr. Biaggi said this was a new performance indicator introduced during the last biennium and noted the performance indicators were modified to a significant degree. There was no information for FY 1998; this information was not identified at that time. This information will be maintained during the next biennium, Mr. Biaggi said. Senator Neal noted the information was identified for FY 1997 but not for FY 1998 and asked what caused the lack of actual data for FY 1998. Mr. Biaggi replied the air quality inventory report showed zeros all the way across but said he would get back to Senator Neal with the answer to that question. Jolaine Johnson, Chief, Bureau of Air Quality, Division of Environmental Protection, State Department of Conservation and Natural Resources, pointed out that when the report was prepared, this data was not available. The information can be provided now, she said.

Senator Neal asked whether law mandates the conversion of public vehicles to alternative fuels. He asked, "Is that a federal standard which we are trying to achieve, or is it a voluntary goal?" Ms. Johnson replied this performance indicator addresses a state legislative requirement wherein public fleets are required to convert to alternative fuels. The ratio of the number of public fleet vehicles converted to alternative fuels to the total number of public fleet vehicles identifies how many of the public fleets are in full compliance with the requirements that were adopted in accordance with the legislation. Ms. Johnson added this is a state program. Mr. Biaggi said there are some concerns about converting the fleets. The vehicles are not available from the manufacturers, the conversion kits needed to convert a regular vehicle to alternative fuel are not readily available, and the infrastructure is not in place to refuel the vehicles. Because of these problems, the conversion is not going as well as had been hoped, "but we are working on the problems," Mr. Biaggi stated.

Mrs. Chowning asked whether air permit and emissions fees are planned to increase, which companies will be assessed higher fees, and how much the increase will be. Mr. Biaggi replied the caseload is projected to increase by 8.33 percent during FY 2000 and 12.53 percent during FY 2001. The client base for the air quality program is industry. Oftentimes population increases and increases in either expansion of industry or new industry moving in may not parallel the population growth, but it is the best indicator available, Mr. Biaggi stated. Consequently, the Bureau of Air Quality is tying increases in the industrial growth and development sector to population increases. Mrs. Chowning requested additional clarification of which companies may have a fee increase. "Will all industrial companies have a fee increase?" she asked. She further inquired the types of companies that would be assessed the fee increase. Mr. Biaggi explained that no new fees would be assessed. He said the fees are adequate to cover the increased budget projections. There is no suggestion that the fees be increased, he stated. Mrs. Chowning said that when Mr. Biaggi discussed increased fees she thought the fees charged would be increased. She concluded the projected increase in fee revenue was the result of growth, not a fee increase.

Senator Jacobsen asked whether there were any outstanding fines or fees. Mr. Biaggi replied there were not.

DEP Water and Mining – Budget Page CNR-28 (Volume 3)

Budget Account 101-3186

Mr. Biaggi stated this is the Bureau of Water Pollution Control, Water Quality Planning Programs budget. This bureau deals with quality issues throughout the state of Nevada. Mr. Biaggi said the mission of this bureau is to protect the quality of waters in the state, both the surface and the subsurface resources. This budget account includes 38 positions. The major change in budget account 101-3186 is that the Bureau of Mining Regulation and Reclamation, which was included in this budget account, has been moved to a new budget account, 101-3188. Mr. Biaggi said the Bureau of Mining Regulation and Reclamation section includes 18 staff. The purpose of the move was to simplify the budget account in terms of budget preparation and tracking. Mining could be a stand alone-budget account providing more accountability and easier tracking, Mr. Biaggi said.

Senator Jacobsen asked for an explanation of the performance indicators. Mr. Biaggi replied the performance indicators for both the water and the mining programs are contained in budget account 101-3186. Mr. Biaggi said the mining program holds, in association with federal land managers, approximately $500 million in financial instruments to ensure that reclamation occurs after the mining activity is completed. This is to ensure there is a productive land use after the mining ends. Mr. Biaggi said this is one of the important performance indicators in the mining program. He said a relatively high percentage of mines are permitted. He stated that all of the permits were issued in a timely fashion.

Ms. Giunchigliani asked for an explanation of the 44 percent increase in water permit fees. She inquired whether the increase was due to a fee increase or to an increase in the number of permits issued. Mr. Biaggi replied there has not been a fee increase in the water pollution control program since the program was first enacted. There was an increase in mining permit fees last year. Mr. Biaggi said that because the fee revenues from mining were higher than anticipated, the fee increase scheduled for this year was postponed.

DIVISION OF STATE PARKS

State Parks – Budget Page CNR-113 (Volume 3)

Budget Account 101-4162

Wayne Perock, Administrator, Division of State Parks, State Department of Conservation and Natural Resources, said the Division of State Parks plans, develops, and maintains 24 park and recreation areas for the use and enjoyment of the residents and visitors to the state. The Division of State Parks preserves areas of scenic, historic, and scientific significance to the state. The authority for the division is contained in chapter 407 of NRS. Mr. Perock said the Tahoe Initiative funds one new position, a park ranger who will be stationed at Lake Tahoe Nevada State Park to help in the implementation of the environmental improvement projects. He said these projects address the Tahoe Regional Planning Association (TRPA) environmental thresholds for recreation, vegetation, wildlife, water quality, soil conservation, and air quality. Mr. Perock discussed the one-shot appropriations included in the enhancement portion of the budget. He said the replacement equipment request includes nine new vehicles, a front-end loader for snow removal, eight computers and printers, and other small tools and equipment that support the operation and management of the state parks and their resources.

Mr. Perock said the new equipment requested will allow the Division of State Parks to keep up with new technologies, vehicle maintenance, radio communications, and snow removal.

Mrs. Chowning noted that a transfer of air pollution control funds from the Department of Motor Vehicles and Public Safety (DMV&PS) and park user fees would support the Park Ranger position requested in the enhancement portion of the budget. She asked, "If the air quality is so good at Lake Tahoe, why is the additional park ranger needed if the position will be working on the air quality management?" If Lake Tahoe is exempt from air quality controls, the position should be funded from some other source, she said. Mr. Perock replied that air quality is one of the things that caused the environmental problems at Lake Tahoe. The Park Ranger position would focus on wildlife habitat, stream environmental zones, forest health, and improvement of the air quality. Mrs. Chowning stated that while she agreed all of the projects are valuable, she was still concerned about the method of funding. She said the position should be funded in a different way.

Mr. Nolan said good forest health influences air quality; once the air quality is bad it contributes to poor forest health. Poor forest health contributes to an increase in erosion and multiple environmental problems. The Park Ranger position that was funded was intended to do planning and to work specifically on the forest health problems at the Lake Tahoe State Park. Mr. Nolan said that although the Tahoe Basin is not a designated nonattainment basin, the air quality is not superior. One of the things considered during the budget process when recommending this position was the available source of funding and the rationale to link the position to the funding. There was a reserve of approximately $7 million in the Emission Control Fund. It was felt the Park Ranger position warranted funding and using the emission control funds was one way to fund this position and a few others. Mr. Nolan said the Budget Division, Department of Administration, has asked for information from the DMV&PS that will enable the Budget Division to examine the cash flow of the Emission Control Fund for the next several biennia. The Budget Division has asked for information identifying what the grants to the counties consist of and the number of vehicles that are tested over a 5-to-7-year span to identify the growth in the number of inspections compared to the population growth, to better estimate future revenue.

Ms. Giunchigliani asked about the park user fees. She noted the user charges included in the budget request were increasing considerably. Mr. Perock replied the increase is a result of carryover from the old year to the new year. Revenues are collected on a calendar basis, the visitation or use of a state park is seasonal, and the amounts collected in the spring are carried over to the next fiscal year. Ms. Giunchigliani asked the dollar amount that carried over from FY 1999 to FY 2000. Mr. Perock replied it was $950,000. Mr. Giunchigliani asked whether there is an automated fee-collection machine. Mr. Perock replied that in the last legislative session money was appropriated to develop a prototype for the automated fee-collection process. This automated fee-collection equipment is currently being used at the Valley of Fire State Park, he noted. The equipment is being studied and improvements are still being made. The performance of the equipment needs to be tracked and studied for a while before it is installed at additional locations.

Ms. Giunchigliani asked whether a vehicle replacement policy has been adopted. Robert Francke, Chief of Operations and Maintenance, Division of State Parks, State Department of Conservation and Natural Resources, replied that replacement of 10 percent of the fleet each year is desired. Historically, this has not been possible; this budget replaces approximately 3.5 percent of the fleet each year. Ms. Giunchigliani suggested the actual need be included in the budget request rather than a lesser request be submitted because it is perceived the request will not be granted. The usage of the vehicle should be considered as well as the mileage or the age of the vehicle, she said.

Senator Jacobsen asked whether the additional fee that was allowed during the last legislative session is creating enough money, and whether the reserve for maintenance and repair is enough. Mr. Perock said it is working very well. Senator Jacobsen asked about the project that will not be completed in the current fiscal year and inquired,"Is a bill draft request necessary to extend the authority to carry forward funding into the 1999-2000 biennium?" Mr. Perock replied the request to carry forward those funds is being developed. Senator Jacobsen asked whether there are any problems with the inmate crews. Mr. Perock said the Division of State Parks has been able to complete a lot of beneficial projects using inmate crews. There is a problem in getting the inmate crews each time they are needed, or they show up unexpectedly. He noted this creates problems in coordinating and scheduling projects for the inmate crews to work on.

Mr. Nolan said that Amendment No. 38 for the Division of State Parks saves $2,500 in FY 2000 and $3,000 in 2001 by eliminating duplicate expenditures. There may be future amendments that make these savings neutral, he said.

DIVISION OF WATER RESOURCES

Water Resources – Budget Page CNR-81 (Volume 3)

Budget Account 101-4171

Michael R. Turnipseed, State Engineer, Division of Water Resources, State Department of Conservation and Natural Resources, stated that he is responsible for managing the state’s water resources with the exception of the Colorado River. This responsibility includes the adjudication of prestatutory water rights, appropriation of water and change applications, and distribution of water. Mr. Turnipseed said his responsibilities also include dam safety, geothermal resources, licenses for well drillers and water rights surveyors, and flood control. The budget request does not include any new programs or any additional positions. The maintenance portion of the budget includes a small increase for inflation. The enhancement portion of the budget includes the request to replace four vehicles, one new camper shell, one fax machine, and some safety and computer equipment.

Senator Jacobsen asked what actions are being taken to reduce the backlog of applications. Mr. Turnipseed replied the Division of Water Resources has been reducing the backlog. An application is considered backlogged when it has been on file for more than one year and no action has been taken. The backlog has been reduced from 4,000 applications to approximately 3,200. The performance indicators anticipate the backlog to be reduced by about 600 applications each year. Mr. Turnipseed said there are many applications in the backlog that no action can be taken on. There are some applications being held because of litigation. Approximately 90 applications are awaiting decisions from the Supreme Court. Many of the applications are involved with desert land entries awaiting a determination from the Bureau of Land Management and many are awaiting protest hearings, Mr. Turnipseed said.

Senator Jacobsen asked for a list of applications filed during the past 5 years indicating why they were not processed timely. Mr. Turnipseed said the Division of Water Resources has taken action on over 90 percent of the applications filed during 1990 and 85 percent of the applications filed since 1990. The majority of the backlog consists of the old applications filed in 1979 and the early 1980s when the cattlemen’s association and the woolgrowers were encouraging all of their members to get their stockwater rights up to date. There are not many applications in the backlog that were filed during the last 8 years, Mr. Turnipseed noted. Those applications that were filed during the last 8 years and are included in the backlog are awaiting for legal determinations.

Senator Jacobsen asked for an explanation of the projected decrease in fee collections during each year of the biennium and whether there are any fees that have not been collected. Mr. Turnipseed replied the fees are statutory and no permit is issued until the fee is received. The projection of flat revenues from fees during the biennium was due to the uncertainty of the mining activity. Approximately 30 percent of the revenue from permit fees come from mining. The mining activities in the state are uncertain, Mr. Turnipseed stated.

Ms. Giunchigliani asked Mr. Morros about the additional Accountant Technician for the director’s office. Mr. Morros replied two new staff positions were required, both in accounting. One was an Account Clerk for the Elko office to support the Division of Forestry. Ms. Giunchigliani asked whether the position for Elko provides assistance for Elko County. Mr. Morros said there are four honor camps in the Elko region, which represent the bulk of the accounting activity. He said the state has been very lucky during the past two years; there were two light-activity fire seasons. If there is an active fire season, the accounting activity will increase dramatically.

Ms. Giunchigliani asked whether there is a policy for billing local counties when there is a fire. Mr. Morros replied the counties are billed approximately $230,000 for emergency response in the fire districts. Elko County is billed $31,000 for this emergency response. The amount billed to the counties is a predetermined set amount and has not been increased for some time, Mr. Morros said. Ms. Giunchigliani inquired when the last time the predetermined fee was increased. Mr. Nolan stated the assessment of $230,000 is a transfer from budget account 101-4227 into the Division of Forestry’s budget account to support part of the overhead expenses. The $230,000 amount has not changed since 1994. There was an attempt to increase the amount during the last legislative session based on future inflation, but no change was made. The Division of Forestry was asked to determine what the $230,000 was intended to cover and what the amount should be based on. Ms. Giunchigliani stated that it would have been nice if that had already occurred so recommendations could be implemented to change the amount.

Ms. Giunchigliani asked about the Accountant Technician for the director’s office and whether there are costs allocated to non-general fund agencies that could provide some of the money for the Accountant Technician position. Mr. Morros replied there are not. He noted the duties and responsibilities of the position would be mostly for the Division of Water Resources. All fees collected by the Division of Water Resources go directly to the General Fund. The only additional money would be from increases in fee collections, and the projection for those fees is that they will stay flat because of the mining activity, Mr. Morros stated.

Senator Jacobsen adjourned the meeting at 10:50 a.m.

RESPECTFULLY SUBMITTED:

Millard Clark

Committee Secretary

APPROVED BY:

Senator Lawrence E. Jacobsen, Chairman

DATE:

Assemblywoman Chris Giunchigliani, Chairman

DATE: