MINUTES OF THE meeting
of the
ASSEMBLY Committee on Natural Resources, Agriculture, and Mining
Seventy-First Session
May 30, 2001
The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:30 p.m., on Wednesday, May 30, 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. John J. Lee
Mr. John Marvel
Mr. Harry Mortenson
Mr. Roy Neighbors
Ms. Genie Ohrenschall
COMMITTEE MEMBERS ABSENT:
Mr. David Humke
STAFF MEMBERS PRESENT:
Linda Eissmann, Committee Policy Analyst
June Rigsby, Committee Secretary
OTHERS PRESENT:
Jolene Johnson, Deputy Administrator, Nevada Division of Environmental Protection
Russ Benzler, Nevada Division of Motor Vehicles and Public Safety
Peter Krueger, Government Relations Consultant, Nevada Fuels Association
Kathleen Marshall, Government Relations Intern, K. Neena Laxalt Consultants, Nevada Propane Dealers’ Association
Neena Laxalt, Government Relations Consultant, Nevada Propane Dealers’ Association
Caty Swain, Government Relations Intern, Nevada Fuels Association
Rose McKinney-James, Clark County Health District
Allen Biaggi, Administrator, Nevada Environmental Protection
Daryl Capurro, Nevada Motor Transport Association
Rodney Dahl, Resource Specialist, United States Department of Agriculture
Dan Kaffer, Western Nevada Resource Conservation and Development Offices
Jamie Mills, Lahontan Conservation District
After the roll was called, Chairman de Braga called for approval of the minutes of the Committee on Natural Resources, Agriculture, and Mining meetings for April 11, 13, 16, 23, 25, and 30 (Exhibit C).
ASSEMBLYMAN NEIGHBORS MOVED TO APPROVE THE MINUTES.
ASSEMBLYMAN BROWN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.
Chairman de Braga requested an update from the Nevada Division of Environmental Protection.
Jolene Johnson, Deputy Administrator, Nevada Division of Environmental Protection, introduced an update on A.B. 278, a bill sponsored by Assemblywoman Dawn Gibbons. (Upon transcription, it became apparent the witness erred in the bill number. She should have stated A.B. 258).
Assembly Bill 258: Authorizes certain authorized inspection stations to perform certain work on certain motor vehicles. (BDR 40-278)
Ms. Johnson described the intent of the bill as providing changes in the vehicle inspection and maintenance program. During the original hearing, the Department of Motor Vehicles (DMV) testified regulatory changes had been proposed that would, in theory, resolve some of the issues regarding repair of vehicles during smog inspections. Since that hearing, the DMV attended public workshops on those proposed regulations. Ms. Johnson summarized the public reactions as surprising and felt it was essential to inform the committee.
Russ Benzler, representing the Nevada Department of Motor Vehicles and Public Safety, commenced testimony on the public workshops held in Reno and Las Vegas during April. There was significant opposition to expanding the functions of Class I smog stations to include minor vehicle repair. The opposition was received from the Class II smog inspection stations, as well as from both Washoe and Clark Counties. Based on the negative input, the DMV had to postpone the adoption of temporary regulations. The new regulations would be watered down, according to Mr. Benzler.
In addition to opposition to the proposed regulations, Mr. Benzler stated there appeared to be a need for improved communication between the smog station industry and the DMV. He assured the committee permanent regulations would be adopted, despite the absence of temporary regulations.
Chairman de Braga recalled a significant issue was the situation where a station with a wall could perform inspection and diagnostics on one side and vehicle repair on the other. Mr. Benzler agreed that had been controversial; however, he acknowledged there was some reasonableness to allowing the replacement of spark plugs at the time of smog inspection. In response to Chairman de Braga, Mr. Benzler summarized the concerns as being in the area of having unqualified mechanics working on sophisticated mechanical systems.
Chairman de Braga expressed her thanks to the witness for the update. The hearing on S.B. 478 was opened.
Senate Bill 478: Authorizes state department of conservation and natural resources to develop and carry out program to encourage certain persons to use clean-burning fuel in motor vehicles. (BDR 43-137)
Peter Krueger, representing the Nevada Fuels Association, introduced his associate. Kathleen Marshall, an intern for Neena Laxalt and representing the Nevada Propane Dealers Association, who distributed a prepared statement (Exhibit D) and commenced testimony in support of S.B. 478. Ms. Marshall summarized the intent of the proposed legislation as being the initiation of clean burning fuel programs in Nevada. The fiscal note in the original draft had been removed.
Chairman de Braga questioned the source of funding for the public education component associated with the bill. Neena Laxalt, Government Relations Consultant, stated the funding was contained within the current budget, and the program was not mandated.
Assemblyman Collins requested clarification of the impact on the incorrect tax formula. Ms. Laxalt declared it had no effect on that.
Peter Krueger, representing the Nevada Fuels Association, introduced Caty Swain, an intern in his office, who distributed a prepared statement (Exhibit E) and commenced testimony in support of S.B. 478. In addition to providing a definition of a clean-burning fuel in the Nevada Revised Statutes, the bill would provide for the development of programs to encourage and educate the public on the use of alternative fuels.
Chairman de Braga asked if the alternative fuels under discussion were not currently exempt from taxes. Mr. Krueger replied the bill no longer addressed the issue of taxes. That had been contained in the fiscal note that was deleted.
Assemblyman Marvel posed a question about the specific types of fuels that would be covered by S.B. 478. Mr. Krueger explained there was increased focus on blended fuels, for example E-diesel. That fuel combined diesel fuel with ethanol. He emphasized that most blended products were petroleum-based fuels; however, there were recent applications using recycled cooking oils that showed promise of being less reliant on the diesel components.
Rose McKinney James, representing the Clark County Health District, made a brief statement in support of S.B. 478. In response to Assemblyman Collins, Ms. James stated she had visited the Barstow solar facility. It was her understanding that, as a qualifying facility (QF), it supplied electric power to Southern California Edison. She was uncertain of the price of that power.
Allen Biaggi, Administrator of the Nevada Division of Environmental Protection (NDEP), resumed testimony in support of S.B. 478. He summarized the intent of the bill as providing the authority to establish programs and incentives for fleets and the public to purchase alternative fuel vehicles. Propane, natural gas, and bio-diesel were examples of environmentally friendly fuels that could significantly reduce air contaminants emitted by vehicles. Clark County had a critical need, in Mr. Biaggi’s judgment, to embrace the new technology for purposes of meeting air quality standards established by the Environmental Protection Agency (EPA).
Mr. Biaggi explained it would be the NDEP that would be charged with the implementation of the program. The bill, an outgrowth of Senator Porter’s interim committee on the oversight of the Clark County air program, contained provisions for the development of a comprehensive program of incentives for the use of alternative fuels.
Chairman de Braga asked if the greatest impediments to alternatively fueled vehicles were price or availability. Mr. Biaggi viewed the problem as multifaceted. The infrastructure was not in place, and he cited the example of natural gas filling stations. Price included the fuel as well as the conversion costs to overhaul the vehicle engine. Mr. Biaggi voiced confidence that incentive programs and policy statements, as embodied in S.B. 478, would move us into the future.
Chairman de Braga requested clarification on incentives, given the fact the tax clause had been removed from the bill. Mr. Biaggi acknowledged the incentives were not present in S.B. 478; however, it did establish an official policy in statute regarding the value of alternative fuels. If S.B. 534, an air pollution bill, passed, he expected to return in 2003 with a proposed program that included incentives. In response to Chairman de Braga, Mr. Biaggi speculated the incentives would take the form of rebates on the purchase of the vehicle, and he believed the program would be modeled after successful programs in other states.
Assemblyman Marvel raised the issue of all vehicles, including the alternative fuel vehicles, impacting the highway system. He asked if there would be fuel taxes assessed to support the Highway Fund. Neena Laxalt offered to respond and explained there were two definitions of taxes regarding clean-burning fuel. In statute there were references to alternative fuels, which specifically applied to public and private fleets. For government fleets, there was no tax assessed. On the tax size, the definition was referred to as the special fuel tax. Under that label all fuels except for gasoline were included. The bill, S.B. 478, would not impact any taxation, and all taxes for special fuels were deposited into the Highway Fund.
Mr. Krueger offered to clarify. He stated there was no question that all fuels with a BTU value got taxed, with the funds being diverted to the Highway Fund. Mr. Krueger stated the difficulty was how to provide incentives without involving taxes. Tax exemptions threatened to erode the Highway Fund. Mr. Krueger emphasized it would be essential for the 2003 legislature to issue a statement on the issue of taxing motor fuels. Most agreed with basing assessments on BTU values; however, that was not authorized in statute. In conclusion, Mr. Krueger voiced support of alternative fuels without sacrificing the Highway Fund.
Assemblyman Mortenson posed a question about the development of automobiles powered by fuel cells. That technology (i.e., electric current) would not fit with the traditional calculation of BTU-output and vehicle mileage.
Daryl Capurro, representing the Nevada Motor Transport Association, declared his position as neutral on S.B. 478. He viewed the bill as relatively benign, despite the inclusion of a policy statement in the statutes. He voiced confidence that someday there would be clean-burning fuel cell systems available in vehicles on highways; however, he considered that technology to be at least ten years from implementation.
Mr. Capurro cautioned the committee on the issue of incentives. Previously, incentives had been directed at reductions to the Highway Fund. His position was that clean air was everybody’s problem and not just a Highway Fund issue. Reductions from the Highway Fund would merely create a deficit elsewhere. There was no other source of revenue to design, build, and maintain our highways.
On the subject of BTU assessments, Mr. Krueger stated it would be unfair to penalize alternative fuels that did not have the BTU rating of other fuels. There would be little chance in 2003 of avoiding Highway Fund issues, in his judgment. He forewarned the committee of the need to increase revenues in the Highway Fund, with fuel taxes being the principal revenue source. At some point, fuel cell technology would have to be addressed. Mr. Krueger concluded by stating everyone who used the highway should have to pay, regardless of the use of new environmentally friendly fuel technology.
Assemblyman Marvel acknowledged the problem of the continued erosion of the Highway Fund.
Neena Laxalt distributed a handout (Exhibit F) and explained that, for two years, her agency had studied a multitude of programs that might generate revenues from other sources, thereby preserving the Highway Fund. She acknowledged the inclusion of the tax exemption in the original language of S.B. 478 had elicited controversy. Despite the deletion of the fiscal note, she voiced her satisfaction with the bill as amended and stated it would accomplish the establishment of a policy statement in statute.
Assemblyman Collins stated for the record that, just because fuel costs had escalated in recent months, the tax revenues had not increased.
Seeing no additional witnesses, Chairman de Braga closed the hearing and called for a motion on S.B. 478.
ASSEMBLYMAN MARVEL MOVED TO DO PASS S.B. 478.
ASSEMBLYMAN COLLINS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.
Chairman de Braga introduced an informational presentation on carbon sequestration.
Rodney Dahl, Resource Specialist, U.S. Department of Agriculture, Natural Resources Conservation Service, introduced his associates, Jamie Mills and Dan Kaffer. Mr. Dahl distributed two handouts, a report entitled “Agricultural Partners and Global Change” (Exhibit G) and a pamphlet entitled “The Carbon Technology Transfer Center: CTTC” (Exhibit H). He commenced his informational presentation on carbon sequestration, a program designed to return carbon to the soil to compensate for carbon released into the atmosphere.
According to Mr. Dahl, urbanization of the planet and the excessive combustion of petroleum products had created a serious carbon imbalance between the soil and the atmosphere. The result had been the creation of the greenhouse effect and overall global warming. Mr. Dahl emphasized the need to return carbon to the soil through the planting of trees and vegetation. Carbon sequestration would include any agricultural practice that added organic matter to the soil and involved permanent grasses, trees, and other vegetation. Major benefits included the improvement of soil and quality, as well as providing wildlife habitat and reduction of soil erosion along riverbanks.
Mr. Dahl called the committee’s attention to the work performed by the Lahontan Conservation District in Fallon (Exhibit I). Kennametal, an industry known to emit toxic chemicals, was invited to participate in a pilot project designed to offset their emissions through the planting of trees at their industrial site. The planting of trees would result in the awarding of carbon credits that could be traded for economic gain on the commodities market.
Chairman de Braga remarked the issue of carbon credit trading had been discussed at length during the legislative session. She asked if the system of trading credits created a license to pollute, despite the claim it would offset emissions.
Mr. Dahl defended the program of carbon trading and stated it had been used nationwide to successfully address the problem of acid rain. Reductions of energy consumption were difficult goals to achieve. As such, it would be essential to offset increased consumption of energy through programs that restored the natural balance of carbon. He viewed the carbon emission-trading scheme as one that encouraged the proliferation of trees and vegetation. It also provided monetary benefits to economically depressed rural areas.
Assemblyman Carpenter requested clarification of the claim that growing trees, rather than alfalfa, could double economic gain. Mr. Dahl explained the statistics were derived from the Carbon Technology Center in Spokane, Washington (Exhibit H). More than 400 hybrid poplar trees per acre had been planted, growing to a harvestable size within ten years. The expected profit from the harvested wood products was $400 to $800 per acre, compared to $80 to $100 for alfalfa. The water requirements would be the same for both products. Profit could be further enhanced through the one-time selling of carbon credits, estimated at an additional $800 per acre.
Assemblyman Collins remarked Nevada had no state carbon credit program; however, Clark County did have a pollution credit exchange system. It had been his experience that some rural county commissioners were unaware of power plant construction proposed for their areas. Assemblyman Collins felt it would be in the best interest of the rural counties to be proactive and establish a credit program. Because of mining, Nevada had become labeled as one of the chief polluters in the nation.
Mr. Dahl acknowledged the problem with mine tailings gave Nevada a bad reputation. He compared it to the bad publicity over Kennametal and added it was the reason they approached the Fallon plant for a pilot project.
Assemblyman Collins took issue with using statistics for trees in Washington to defend the program in the Nevada desert and asked what the alternative vegetation would be for that climate. Mr. Dahl responded any type of vegetation would be useful. On Nevada’s rangelands, residents could achieve a lot in improving the carbon content of soils. In urban settings, carbon credits could be earned for city parks and golf courses.
Returning to the profitability of trees versus alfalfa, Assemblyman Collins voiced confusion over how two or three cuttings of alfalfa per year could compare to harvesting trees once every ten years. Mr. Dahl defended the statement based on the size of a tree project where harvesting would be continuously performed on a rotating basis. Tree farms generally had lower maintenance costs and equipment requirements than did alfalfa fields.
Assemblyman Collins asked the witness if he had knowledge of how the state could implement a credit system similar to that in Clark County. Mr. Dahl stated he was unable to respond.
Assemblyman Mortenson complimented the effort to encourage the planting of trees and vegetation. In southern Nevada, there had been an opposite process where acres of greenery had been removed from the valley so more houses could be built and more water consumed by new residents. Ordinances were in place that actually rewarded residents not to plant grass. Assemblyman Mortenson posed a question about the logic of trading credits and whether it would just preserve the status quo. In southern Nevada, the two for one credit exchange had the promise of eventually achieving an offset and reduction in pollution.
Mr. Dahl replied his program did not contain the two for one credit exchange system. The Kennametal project was the first of its kind and thought had not been given to the Clark County offset program. On the subject of planting grass, Mr. Dahl stated it would not be considered the first choice for revegetation. There was no use for the cut grass, the mowers used to cut the grass were most likely to use a petroleum fuel product, and the grass had to be “harvested” too frequently. In contrast, harvested trees could be used to produce a multitude of products.
Dan Kaffer, representing the Western Nevada Resources Conservation Development Council, offered to clarify. He stated a principal goal was to develop regional solutions to watershed problems. The loss of vegetation along the banks of Nevada’s streams was a serious problem. It had been compounded in past years by a campaign to remove the cottonwood trees as a means to save water. Erosion of banks along the Carson River resulted in a river that was too wide and too shallow, causing high evaporation rates. The rivers in Nevada had to be viewed as an asset and not a dumping ground.
Chairman de Braga asked for clarification on the carbon sequestration project at Kennametal in Fallon. She questioned how planting trees could possibly change the emission of highly toxic chemicals into the air. Mr. Dahl replied it did not change what substances were emitted; however, growing vegetation utilized byproducts of emissions from the air and returned the carbon to the soil.
Assemblyman Collins asked the witness to review the logic of a narrow river versus a wide flood plain. Mr. Kaffer declared it was better for a riverbed to be narrow and deep. There was less erosion, the water maintained a cooler temperature, and there was a lower evaporation rate. The wide flood plain to which he had referred would be beneficial only during times of flooding. The southern Nevada wetlands should be wide enough to accept floodwaters and to filter out the nutrients, returning to normal width after the flooding.
Assemblyman Collins requested clarification on the difference between cottonwood trees and the tamarisk salt cedar (e.g., athols). Both used considerable water. Mr. Kaffer replied the tamarisk was an introduced species with many negative characteristics. It killed native plants and was capable of clogging entire water systems. Mr. Kaffer added it was regrettable that at one time there were an estimated 15,000 acres of cottonwood trees in the Carson River basin whereas today there were fewer than 3,000 acres.
Assemblyman Collins remarked the Conservation and Reinvestment Act authorized the purchase of wetlands and the return to the federal government. Mr. Kaffer was not familiar with that action.
Jamie Mills, representing the Lahontan Conservation District, addressed the subject of the Kyoto Protocol (Exhibit G). In 1997 the Intergovernmental Panel on Climate Change (IPCC) had drafted the pact that called for nations to reduce greenhouse gas emissions to 1990 levels. It was signed and ratified by the major nations of the world. It was the Kyoto Protocol that was the precipitating factor in developing the carbon sequestration program.
Mr. Kaffer offered to schedule a tour for the committee at a later date. Chairman de Braga replied it would be a good activity during the interim. Assemblyman Claborn suggested it be added to the land use summit next year.
The meeting was adjourned at 3:00 p.m.
RESPECTFULLY SUBMITTED:
June Rigsby
Committee Secretary
APPROVED BY:
Assemblywoman Marcia de Braga, Chairman
DATE: