ASSEMBLY COMMITTEE ON NATURAL RESOURCES, AGRICULTURE AND MINING

MINUTES OF THE meeting

of the

ASSEMBLY Committee on Natural Resources, Agriculture, and Mining

Seventy-First Session

May 16, 2001

The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:30 p.m., on Wednesday, May 16, 2001. Chairman Marcia de Braga presided in Room 3142 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

Mr. Tom Collins, Vice Chairman

Mr. Douglas Bache

Mr. David Brown

Mr. John Carpenter

Mr. Jerry Claborn

Mr. David Humke

Mr. John J. Lee

Mr. John Marvel

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Genie Ohrenschall

STAFF MEMBERS PRESENT:

Linda Eissmann, Committee Policy Analyst

June Rigsby, Committee Secretary

OTHERS PRESENT:

Peter Krueger, Nevada Independent Emission Control Stations

Helen Foley, Clark County Health District

Daryl Capurro, Nevada Motor Transport Association

Joe Johnson, Toiyabe Chapter, Sierra Club

Chris Robinson, Air Quality Division, Clark County Health District

Dan Musgrove, City of Las Vegas and the Southern Nevada Regional Coalition

Roll was called, and the hearing was opened on S.B. 357.

Senate Bill 357: Authorizes board of county commissioners of certain larger counties, in certain circumstances, to impose additional fee for each form certifying emission control compliance for limited period and revises provisions governing the disbursement of money from the pollution control account. (BDR 40-1180)

Linda Eissmann, Committee Policy Analyst, distributed a work session document (Exhibit C) and read from a prepared statement. There were five measures on the agenda, all dealing with air quality.

Three amendments had been proposed for S.B. 357. The first amendment in tab A of Exhibit C was submitted by Helen Foley. The second amendment, tab B of Exhibit C, was authored by Senator Carlton, and the third, tab C of Exhibit C, was received from Peter Krueger. The intent of S.B. 357 was to provide the funding necessary for the regional pollution control agency that would be created with the passage of S.B. 536.

Chairman de Braga, in reference to Peter Krueger’s amendment in tab C, remarked it represented substantive change over his previous recommendation. She added it was her personal preference not to include the amendments in tab A and tab B. The exception would be the language addressing the 2 percent commission that was covered in both tab A and tab C amendments. Chairman de Braga asked the committee where to best place the language for the 2 percent commission.

Assemblyman Marvel commented he would like to hear from Peter Krueger and added it would be desirable to find a legislative vehicle for the amendment. Chairman de Braga cautioned the committee the 2 percent commission was tied directly to the $6 smog fee. No testimony would be heard; however, questions would be allowed.

In response to Assemblyman Marvel, Peter Krueger, representing the Nevada Independent Emission Control Stations, explained the alternative legislative vehicle for the amendment could be A.B. 198. The bill had not been heard and was available for modification in the Senate Natural Resources Committee. In reality, the 2 percent commission would be likely judged as “not germane.” Mr. Krueger emphasized the 2 percent commission, as well as the line itemization of the MCI communication fee, were critical to his clients.

Helen Foley, representing the Clark County Health District, declared she would withdraw her amendments as proposed in tab A of Exhibit C. She recalled the concerns voiced by Mr. Krueger regarding the inclusion of off-road diesel vehicles. She voiced her support to Mr. Krueger of the 2 percent commission. Ms. Foley reminded the committee that A.B. 198 addressed the same issue, namely the placement of local agencies in the laundry list of fund recipients. She viewed that bill as an ideal vehicle for use, and she encouraged the passage of S.B. 357 as written.

Chairman de Braga asked if an emission control station could already charge the 2 percent commission without adding it to the proposed legislation. Mr. Krueger replied “maybe,” although he was pessimistic the 2 percent commission could survive without legislation. He felt it might be possible to add the MCI electronic data transmission fee through administrative regulation. Mr. Krueger rated that portion of the amendment as key to his efforts. There had been a very recent increase of 58 cents to that fee, and the emission control stations had no means through which to recover that added cost.

Chairman de Braga responded there was opinion that the fee in question could be added without being established by statute. Mr. Krueger disagreed and stated the 2 percent charged against the $6 smog fee had to be legislatively mandated; however, the electronic data transmission fee could probably be handled administratively. Of the two parts of the amendment, the latter was the most crucial.

Assemblyman Marvel interjected he was not concerned with the collection fee; however, the reference to off-road diesel vehicles would be jeopardized if the bill was returned for reconsideration of language.

Daryl Capurro, representing the Nevada Motor Transport Association, explained the use of the term “diesel” restricted enforcement to only diesel off-road vehicles and not to vehicles powered by any other fuel. In his judgment, the issue, as a minimum, was fairness and perhaps raised questions of constitutionality. He also pointed out the amendment allowed for the collection of an annual commensurate fee for each piece of off-road diesel equipment used for non-agricultural purposes.

Chairman de Braga interjected that the amendment he referenced was not being considered. If the provisions for the 2 percent commission and the MCI transmission fee were included, the question would be that the bill, as amended, would have to be returned to the Senate. As such, the fee could be amended downward. Chairman de Braga viewed the Krueger amendments as the best choice.

Mr. Krueger added, in the spirit of cooperation, he was willing to trust the Clark County Air Quality Division one more time and have the amendments be attached to A.B. 198. Chairman de Braga stated it would be essential to consult with the Legal Division in order to place the amendments of tab C in Exhibit C into A.B. 198.

Chairman de Braga stated, in summary, the Krueger amendment to S.B. 357 would be withdrawn. Although the Senate had passed the bill once, she cautioned the committee that, if amended, the bill would return to the Senate and risk the consequences of fiscal reductions. Chairman de Braga stated there was a need for the proponents of the bill to return in 2003 with an update. Chairman de Braga called for a motion on S.B. 357, noting the language referencing off-road diesel had been removed.

ASSEMBLYMAN MARVEL MOVED TO DO PASS S.B. 357 WITHOUT AMENDMENT.

ASSEMBLYMAN LEE SECONDED THE MOTION.

THE MOTION CARRIED BY ALL PRESENT.

Chairman de Braga encouraged the committee to look favorably upon A.B. 198 if it came before them for a vote. The hearing on S.B. 533 was opened.

Senate Bill 533: Authorizes control officer of local air pollution control board to request initiation of certain proceedings regarding enforcement of certain laws pertaining to control of air pollution. (BDR 40-1296)

Linda Eissmann, Committee Policy Analyst, called the committee’s attention to page 2 of Exhibit C and reviewed the highlights of S.B. 533. The bill was needed for the local air pollution control agencies to retain the authority delegated to them by the Environmental Protection Agency (EPA). No amendments had been proposed for the measure.

Assemblyman Marvel asked if this was a primacy issue. Ms. Eissmann concurred that had been the theme during testimony. Assemblyman Carpenter voiced concern over the inclusion of the term “not knowingly,” language he had fought to delete in other legislation.

Chairman de Braga called for a motion on S.B. 533.

ASSEMBLYMAN MARVEL MOVED TO DO PASS S.B. 533.

ASSEMBLYMAN HUMKE SECONDED THE MOTION.

THE MOTION CARRIED BY ALL PRESENT.

The hearing on S.B. 535 was opened.

Senate Bill 535: Authorizes local air pollution control agency in certain counties to establish program to reduce and control air pollution. (BDR 40-791)

Linda Eissmann, Committee Policy Analyst, read the highlights of S.B. 535 from Exhibit C. Two amendments had been proposed during previous testimony. The first amendment in tab D was proposed by Helen Foley of the Clark County Health District and offered clean-up language to the bill. A technical correction had been added to the amendment. The second amendment in tab E of Exhibit C was offered by Steven Hill of the Associated Builders and Contractors.

Chairman de Braga, referencing the first reprint of the bill, asked if Section 1, line 18 had been removed. Ms. Eissmann responded she had not seen that listed for removal in any of her documents. Chairman de Braga asked for confirmation that the words “must provide for adequate administration, enforcement, financing, and staff” were still in the bill. Ms. Eissmann replied “yes.”

Assemblyman Marvel asked if Clark County was satisfied with the language of the amendment. Helen Foley, representing Clark County Health District, clarified the amendment attempted to accomplish three actions. The first was to give statutory authority to establish a pollution control agency and the emission reduction control programs. The second was to eliminate all inter-pollutant trading by January 1, 2002. The last action was a promise to return in 2003 and report back to the legislature on progress. The amendment under consideration by the committee was acceptable to Ms. Foley.

Joe Johnson, representing the Toiyabe Chapter of the Sierra Club, had originally voiced concerns with the first reprint of S.B. 535; however, he offered a brief statement in support of the current amendment.

Assemblyman Carpenter requested clarification on page 15 of Exhibit C, Section 2, lines 3-18 to 3-20. The language, referencing emissions by fleets, appeared to be stricken, and Assemblyman Carpenter asked if that was the case. Ms. Eissmann confirmed those lines were to be stricken. She added, in the original bill, there had been language that prohibited inter-pollutant trading, but that it applied only to mobile sources. That wording did not reflect the intent. As such, the language was amended so that inter-pollutant trading was prohibited from any source.

Chairman de Braga summarized the deletion of language included all references to regulations covering credits for the reduction of emissions relating to mobile sources. It still allowed for a method for determining credits that were quantifiable, surplus, and legally enforceable.

Helen Foley interjected there was one issue that had been omitted in the language, and that was on page 16 of Exhibit C, line 3-32. Ms. Foley stated it should say “purchasing or selling credits.”

Chairman de Braga requested clarification of line 4-5 on page 16 of Exhibit C that stated “May be used to comply with permit requirements; and May be traded or sold to another person.” Chris Robinson, representing the Air Quality Division of the Clark County Health District, replied it was a reference to a common permit condition. That action would be accomplished through a local purchase and exchange program that would be developed as a result of the legislation.

Chairman de Braga voiced an earlier concern and asked if it gave someone the license to pollute. Ms. Robinson defended the emission reduction credit process and stated the program accomplished an overall reduction in pollutants. The offset ratio was the critical factor in the success of the emissions trading. For one ton of pollutants emitted, two tons had to be ultimately reduced.

Chairman de Braga asked if there was ever a point when that process could continue indefinitely, with no obligation to clean up the source of the pollution. Ms. Robinson replied, in theory, a single company could conceivably continue to trade and purchase credits, thereby postponing remedial action and the elimination of the source of pollution. Chairman de Braga voiced her concern it would not really solve the problem. Ms. Robinson acknowledged it was a program of reduction. The EPA had not certified the current program, and some of the language in the bill was borrowed from EPA mandates. The goal was to establish an EPA-acceptable program, one for which Clark County could take credit.

Chairman de Braga reiterated her concern and stated the ultimate goal was to reduce pollution in the Las Vegas valley. The goal was not to find methods to rearrange and perpetuate the problem. Chairman de Braga reminded the witness that population growth would continue. Electric power generation was expected to flourish in the years ahead. Diesel legislation had reached a dead end during the current legislative session.

Assemblyman Mortenson asked what the specific goal of the EPA was for Clark County. Ms. Robinson explained it was to develop a program that was “quantifiable, surplus, and legally enforceable.” The current program in Las Vegas did not reach any of those three goals. Assemblyman Mortenson voiced frustration and declared, “Just do it.”

Ms. Robinson replied the passage of S.B. 535 would move them in the direction of action. The intent of the bill was to establish the authority to develop and implement an emission reduction credit (ERC) program. The complete overhaul of the existing ERC program was underway. Although one company would have to buy credits to achieve compliance, there would be an overall drop in pollution levels in the Las Vegas valley.

Assemblyman Brown asked if Steven Hill’s amendment, tab E of Exhibit C, would be considered. Chairman de Braga declared it would not be necessary to discuss that amendment because the bill, as amended, would phase out inter-pollutant trading.

Assemblyman Brown requested Ms. Foley’s opinion of Mr. Hill’s amendment. Ms. Foley explained there had been discussions between Mr. Hill, representing the Associated Builders and Contractors, and Clark County. Mobile source emission-reduction credit programs were being developed. Ms. Foley voiced concern over the extent of restrictions placed into the law, mandating the trading of certain types of pollutants. She viewed flexibility as essential and was confident of establishing a plan that suited the building industry. Ms. Foley assured the committee of their continued negotiation with the building industry on the subject of the mobile source emission problem.

Chairman de Braga called the committee’s attention to a handout (Exhibit D), a copy of comments drafted by Dave Souten of the Environ Corporation. She summarized by stating Mr. Souten could see no scientific basis for Mr. Hill’s proposed amendment. Assemblyman Brown felt the building industry might need some consideration and viewed the Hill amendment as providing for limited continuation of a program.

Assemblyman Marvel interjected the Hill amendment was not needed. He voiced support of the first amendment, tab D of Exhibit C, with the addition of the word “sell” in reference to emission credits. Chairman de Braga acknowledged that wording on line 3-32.

ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS S.B. 535.

ASSEMBLYMAN MORTENSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

The hearing on S.B. 536 was opened.

Senate Bill 536: Requires creation, by cooperative agreement, of separate entity to establish and administer program for control of air pollution in certain counties. (BDR 40-1116)

Linda Eissmann, Committee Policy Analyst, commenced discussion on S.B. 536. She read prepared comments from page 3 of Exhibit C. No amendments had been proposed as a result of the initial committee hearing. The funding mechanism for the newly created air pollution agency would be the $6 additional fee authorized by S.B. 357.

Chairman de Braga requested clarification on how much it would cost to establish the new agency in Clark County. Chris Robinson, representing the Air Quality Division of Clark County Health District, offered to respond. She called the committee’s attention to several handouts. Exhibit E, entitled Air Pollution Control Revenue and Expense Summary, was a one-page summary outlining projections based on the implementation of the $6 smog check fee increase.

Chairman de Braga remarked that Clark County was assuming they would charge the maximum smog fee of $6. Although the language had said “up to,” the actual intention was to automatically go to $6. Ms. Robinson replied “yes.” She defended that action based on the deletion of the property tax component and general obligation bonds that had originally been proposed as funding mechanisms.

Chairman de Braga pointed out the projections addressed only the addition of staff, and she asked what the real cost would be to set up the agency when considering all expenses. Ms. Robinson replied the $6 increase equated to more than $4.5 million in revenues per year. As portrayed in Exhibit E, projections for years one through five revealed the largest portion of the $4.5 million would be diverted to honoring air quality commitments, while the creation of the new agency would consume an estimated $1.1 million each year.

Ms. Robinson distributed copies of several handouts. Exhibit F contained an overview of the agency goals and objectives, Exhibit G was a summary of the anticipated impacts of inadequately funded air quality programs in southern Nevada, and Exhibit H outlined the timeline for program development. She emphasized the documents captured only new air quality obligations and did not address existing workload.

Chairman de Braga voiced frustration that nothing in the budget projections directly addressed air quality. In her judgment, the money would be better spent directly on hiring enforcement personnel, not accountants and program administrators.

Chris Robinson defended the hiring scheme and explained the personnel depicted by dark pink in the bar graph on page 8 of Exhibit F were, in reality, comprised of enforcement officers as well as program administrators. She called the committee’s attention to additional documentation in Exhibit H. Chairman de Braga reiterated her concerns by saying more money would not clean up the air unless it was utilized in enforcement.

Assemblyman Mortenson requested clarification of the bar chart on page 8 of Exhibit F. Ms. Robinson explained the green column depicting 91 employees represented the pooling of 10 employees of the Air Quality Division of the Clark County Health District and 71 employees of the Clark County Health District with the 10 employees of the Clark County Comprehensive Planning Department. The two existing agencies would come together under one unified elected Board, replacing the air monitoring functions performed by the Clark County Health Board and the Clark County Commission.

Chairman de Braga raised a question regarding the ability of the new agency to issue revenue bonds. Helen Foley offered to respond and explained the creation of a new agency was often enabled, through legislation, to issue bonds. That would not occur until revenue was generated.

Assemblyman Humke made reference to correspondence of May 10 on pages 9 and 10 of Exhibit H. It was a letter from Region IX of the Environmental Protection Agency (EPA) to Clark County. He asked if the EPA was under a consent decree based on a lawsuit by the Earth Justice Legal Defense Fund and whether it was based on their granting of an extension to Clark County due to noncompliance. Ms. Robinson asked for clarification. Assemblyman Humke responded the purpose of the letter appeared to be telling Clark County to expedite program development. Ms. Robinson agreed.

Assemblyman Humke, with frustration, stated it appeared the $6 increase in fees was allowing Clark County to throw “a ton of money” at a program, with hopes that the EPA would be satisfied. He viewed the increase in fees as excessive and added he was not convinced Clark County had made a good case for how that money would be spent.

Ms. Robinson offered to walk through Exhibit H, the detailed program development timeline. In defense of the May 10 letter from the EPA, she explained the intent of including the letter in their documentation was to demonstrate it was the EPA directing Clark County on the specifics of becoming compliant in air quality programs. Without following their recommendations, Ms. Robinson feared the EPA would assume control of the entire program. Approval from the EPA was required by December 2001.

Assemblyman Humke summarized the tone of the EPA letter as being serious and intentional, based on language stating Clark County had failed to implement a successful air quality management program since 1995; however, he viewed the $6 increase in fees as a means to pacify the EPA. Assemblyman Humke remarked if a state agency had approached the committee with a similar fiscal note, the bill would have been forwarded to the Committee on Ways and Means. Because it was a request from a county agency it did not, in Assemblyman Humke’s judgment, lessen the burden of the committee to render a fiscally responsible decision.

Ms. Robinson reminded the committee that, in addition to the possibility of relinquishing local control to the EPA, there was a higher concern of forfeiting federal highway funding and the loss of an ability to expand the wastewater treatment capacity. The ramifications for noncompliance were significant and multiple.

Assemblyman Lee requested clarification of professional services listed on page 8 of Exhibit H and asked if those costs were attorney fees. Ms. Robinson clarified the professional fees for the first two years included many items, including ozone studies, transport issues, and carbon monoxide saturation studies.

Assemblyman Lee replied that was not the answer he was seeking. He then referred to the revenue line item called “Excess Reserve Grant” in the amount of $900,000 and asked what the borrowing source would be. Ms. Robinson explained the Excess Reserve Fund was derived from the existing $5 smog fee, specifically the leftover portion after distribution of funds to local governments.

Dan Musgrove, representing the city of Las Vegas and the Southern Nevada Regional Coalition, commenced testimony in support of S.B. 536. He viewed the bill as essential for achieving compliance with federal air quality regulations. The creation of a new agency would be guided by a single elected board whose sole task was to solve air quality problems.

Chairman de Braga asked if the new board would be created from scratch. Mr. Musgrove explained the pooling of existing resources of two agencies under the new leadership of Chris Robinson would ensure continuity and progress. Chairman de Braga commented that Chris Robinson, as of yet, did not have that job.

Assemblyman Lee posed a hypothetical question and asked, if the new scheme did not work as planned, would there be a backup plan for funding the air quality programs. He voiced concern that Clark County would return in future sessions requesting another increase in the smog fee. Mr. Musgrove stated they had spent more than $150,000 hiring some of the best consultants and had invested hundreds of hours of staff time in designing the plan. He felt confident the $6 smog fee, as requested, would be sufficient to solve the problems in southern Nevada.

Assemblyman Lee reiterated his concern and stated if the plan did not work, would those same players contribute personnel and time to solve the problem. Mr. Musgrove replied it was a local issue, and he did not anticipate returning to the legislature for rescue. In response to Assemblyman Lee, Mr. Musgrove expressed confidence that with the passage of the air quality bills, the tools would be in place to be “well on the way to solving the problems with the EPA.”

Assemblyman Lee requested clarification of the EPA issues, specifically if the plan would completely satisfy the EPA. In reference to the EPA’s complaints, Assemblyman Lee echoed Assemblyman Mortenson’s earlier comment, “just do it.” Chris Robinson offered to respond and stated the program, as designed, would satisfy the EPA. Within five years, compliance would be achieved according to their plans (Exhibit H).

Assemblyman Mortenson acknowledged the task was a tough one, but he was increasingly confident that Ms. Robinson was sincere in her testimony.

Assemblyman Humke commented the first version of S.B. 536 had a two-thirds majority vote legend stamped on the bill. The second version did not and, additionally, the wording referred to a $6 smog check fee. He asked why the second version did not require the two-thirds majority vote. Helen Foley offered to clarify and explained the funding sources had been removed from S.B. 536 and, as such, the two-thirds requirement was eliminated. All funding was now requested under S.B. 357.

Chairman de Braga called for a motion. There were no amendments.

ASSEMBLYMAN CLABORN MOVED TO DO PASS S.B. 536.

ASSEMBLYMAN BACHE SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

Chairman de Braga reminded the witnesses that the committee was uneasy with the passage of the legislation; however, they were willing to try because of the tremendous challenges facing southern Nevada. An update from Clark County would be expected during the 2003 session.

Chairman de Braga opened the hearing on S.J.R. 12.

Senate Joint Resolution 12: Urges Congress to require Bureau of Land Management of United States Department of the Interior and United States Environmental Protection Agency to take certain actions to prevent and reduce air pollution. (BDR R-792)

Linda Eissmann directed the committee to page 4 of Exhibit C. The intent of the resolution was to require federal agencies to support the air quality programs in Clark County. There were no amendments proposed to the bill.

Chairman de Braga called for a motion on S.J. R. 12.

ASSEMBLYMAN HUMKE MOVED TO ADOPT S.J.R. 12.

ASSEMBLYMAN LEE SECONDED THE MOTION.

Chairman de Braga called for discussion. Assemblyman Collins voiced immediate concern over the issue of four-wheel drive vehicles raising dust on dirt roads. By urging federal agencies to prevent air pollution, it would invite the prohibition of vehicle use on back roads in Nevada. That would include recreational use as well as ranching activities.

Chairman de Braga agreed that Assemblyman Collins raised a good point. The language that urged the “participation of federal agencies” was too vague, in her judgment. She called for a final vote on S.J.R. 12.

THERE WAS A TIE VOTE, AND THE MOTION FAILED. THERE WERE SIX “NO” VOTES AND SIX “YES” VOTES. ASSEMBLYMAN MARVEL, COLLINS, NEIGHBORS, CARPENTER, DE BRAGA, AND CLABORN VOTED “NO.”

Chairman de Braga adjourned the meeting at 3:29 p.m.

RESPECTFULLY SUBMITTED:

June Rigsby

Committee Secretary

APPROVED BY:

Assemblywoman Marcia de Braga, Chairman

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