MINUTES OF THE meeting
of the
ASSEMBLY Committee on Natural Resources, Agriculture, and Mining
Seventy-First Session
April 2, 2001
The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:30 p.m., on Monday, April 2, 2001. Chairman Marcia de Braga presided in Room 3161 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mrs. Marcia de Braga, Chairman
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
GUEST LEGISLATORS PRESENT:
Assemblyman Bob Beers, District 4
STAFF MEMBERS PRESENT:
Linda Eissmann, Committee Policy Analyst
June Rigsby, Committee Secretary
OTHERS PRESENT:
Mike Turnipseed, former State Engineer, Nevada Division of Water Resources
Hugh Ricci, State Engineer, Nevada Division of Water Resources
Pete Goicoechea, Member, Eureka County Commission
Karen Peterson, Attorney, Humboldt River Basin Water Authority
Warren Russell, Commissioner, Elko County
Jack Reid, Back Country Horsemen of Nevada
Todd Schwandt, President, Nevada Outfitters’ Association
Tom Atkinson, Chief Game Warden, Nevada Division of Wildlife
Donna Berg, Owner, Big Smoky Valley Outfitters
Ron Biggs, Guide, Wild Life West Guides
Bob Gronowski, Administrator, Nevada Department of Agriculture
Roll was called, and a subcommittee status was declared pending the arrival of committee members. The hearing was opened on A.B. 468.
Assembly Bill 468: Revises provisions governing imposition of tax on certain transfers of water. (BDR 48-1273)
Assemblyman Bob Beers, District 4, commenced testimony on A.B. 468 and reviewed the three major points of the bill. It clarified the original legislation that created NRS 533.438, a statute designed to give economic benefit to a county losing water across its borders for the beneficial use in a neighboring county. The second intent was to create the mechanism by which the state engineer reviewed and approved applications for the tax to be applied by the county of origin. The third intent was that no tax would be imposed in situations where a beneficial use could not be identified. In those cases, the water was considered a byproduct of some activity (e.g., mine dewatering).
Chairman de Braga asked that the roll be called. A quorum was judged to be present, and the meeting resumed as a full committee hearing.
Returning to A.B. 468, Chairman de Braga asked if the bill covered unintentional discharge of water into another county. Assemblyman Beers replied the original intent of the law did not specifically cover that situation. The state engineer would be granted the authority to handle any situation. In response to Chairman de Braga, subsection 4 was designed to preclude levying the tax in situations where water was appropriated and used within one county, but later migrated into an adjacent county.
Chairman de Braga requested clarification of whether mine dewatering was designated as beneficial in statute or by regulation. Assemblyman Beers replied he was uncertain of that answer.
Mike Turnipseed, former State Engineer, Nevada Division of Water Resources, commenced testimony in support of A.B. 468 and offered some historical milestones.
In 1989, the Las Vegas Valley Water District had filed 146 water applications. One was for Virgin River water, and the other 145 were for ground water in Clark, Lincoln, White Pine, and Nye Counties. Processing the applications was described as a lengthy ordeal, given the more than 3,600 protests that were received.
In 1991, in an attempt to allay the fears of the rural counties, Senator Adler sponsored S.B. 526 of the Sixty-sixth Session, a bill that became NRS 533.438. It was designed to protect the county of origin and allowed that county to levy a tax of up to $6 per acre-foot of water leaving the county; however, Mr. Turnipseed stated the $6 tax had never been imposed.
Prior to 1995, water from the Barrick Mine in Boulder Valley had been pumped out of the mines and diverted into a storage reservoir for irrigation use. Due to an unusually wet year (1995), Barrick requested a permit to discharge the water to the Humboldt River. Eureka County, which had protested some of Barrick’s applications, agreed to withdraw those complaints in exchange for a $1 million tax over a ten-year period. It was later determined by the Attorney General that Eureka County did not have the authority to levy the tax. In turn, Eureka filed suit against the state. The point of contention was that the origin of the water and the destination of the water were both within one county, Eureka. Despite the legislative intent of S.B. 526 of the Sixty-sixth Session, the state lost the suit.
Mr. Turnipseed declared the language of A.B. 468 to be more closely aligned with the legislative intent of the 1991 session. It clearly differentiated the county of origin from the destination county where the water was put to beneficial use.
Assemblyman Carpenter asked if water was still being diverted from the Boulder Valley. Mr. Turnipseed stated all of the water from the mine was held in the valley and used for irrigation in the summer and reinfiltration off-season. Discharge to the Humboldt River spanned a mere 14 months.
Assemblyman Neighbors commented on the term “beneficial use” and stated the bill appeared to be appropriately written.
Hugh Ricci, State Engineer, Nevada Division of Water Resources, resumed testimony and reviewed each of the amendments to the A.B. 468 (Exhibit C). Chairman de Braga noted change to Section 4 and asked if it was a significant change. Mr. Ricci agreed and explained the amendment was designed to capture the intent of S.B. 526 of the Sixty-sixth Session. In regard to mine dewatering as a beneficial use, Mr. Ricci stated the water source was a byproduct of a mining process and, therefore, a secondary benefit.
Assemblyman Neighbors requested clarification regarding a situation where water was diverted for beneficial use to two counties. Mr. Turnipseed replied there existed in statute the language to cover that event. Chairman de Braga interjected and directed the committee to subsection 6 on page 2 (Exhibit C). Because several basins in Nevada were split by two and sometimes three counties, Mr. Turnipseed recognized the need to cover that situation.
Assemblyman Marvel asked if mine dewatering was allowed under temporary permits. Mr. Ricci replied in the affirmative and explained the permits for dewatering would expire at the cessation of mining. Assemblyman Marvel made reference to the description of mine dewatering as a beneficial use. Mr. Ricci reiterated the need for dewatering in a mining operation and declared it a beneficial process with a usable byproduct.
Mr. Turnipseed elaborated by stating that, in a typical mining operation, there were several good uses of water, for example, dust control on the roads. Because mining itself was described as a beneficial use in statute, it logically followed the water was beneficial.
Chairman de Braga urged the committee to fully understand the language of the law. It was essential to be clear on the justification of mine dewatering as a beneficial use or if the beneficial use occurred at a later point in time when utilized elsewhere. Mr. Turnipseed added there was a statute that stated there could be only one major beneficial use. When an application was filed, the beneficial use was listed as “mining, milling, and dewatering” if dewatering was required to get to the ore out of the ground. Secondarily, a policy decision was made in past years that, even if the basin was over-pumped for a short time, it was still good policy. The mine life was only six years, and, as such, over-pumping the basin created only a temporary state of disequilibrium.
Assemblyman Carpenter asked if the county of origin must get permission from the state engineer in order to levy the tax against the destination county and if the state engineer made the judgment of what constituted a beneficial use. Mr. Ricci replied if 100 percent of the pumped water was intended for diversion to a neighboring county, the state engineer would rule the entire amount would be subject to the tax. In the case of dewatering a mine, it would be determined at that time if any of the water was leaving the county, and that water would not be subject to the tax.
Assemblyman Carpenter commented, if the original application of the mine stated the water was beneficial for the operation, there would not be a determination made that excess water flowing out of the basin could be put to another beneficial use. Mr. Turnipseed offered an explanation of his agency’s attitude toward mine dewatering. The first priority would be to return the water to the ground, and many mines had chosen that option. If not possible, the second priority was to utilize the water for some other operation (e.g., irrigation). If those two options failed, the water was allowed to be discharged to a surface water body.
Assemblyman Carpenter voiced concern about the language and feared the bill as written would not accomplish that.
Mr. Ricci addressed those concerns and explained his motivation in offering amendments was to clarify the intent of A.B. 468. Two legislative sessions had attempted to determine what money would be allowed to the county, and the bill was the means by which to accomplish that.
Chairman de Braga asked the witness if the existing law was clear enough and the proposed bill was not essential. Mr. Ricci replied the existing law was very susceptible to multiple interpretations, as evidenced by the court litigation in which the judge read the literal interpretation of the law without considering the underlying legislative intent.
In response to Chairman de Braga, Mr. Ricci declared the proposed legislation promised to prevent future misunderstanding. The author of the bill, Assemblyman Beers, had not responded to a copy of the proposed amendments, according to the witness.
Assemblyman Neighbors illustrated an example in which a county of origin was dewatering, and a portion of the water flowed down a riverbed in one county, and another portion flowed into a second county where it was used for irrigation. Mr. Neighbors viewed the latter portion as clearly more beneficial than the portion going down the river. Mr. Turnipseed reiterated his earlier point about the point of diversion in one county and the beneficial use within that same county. In that case, there would be no need to mitigate economic opportunities lost. Engineering and modeling work had revealed significant impact to the Humboldt River as a result of mine dewatering. Using the example of Reno-Sparks, the literal interpretation of the law would declare a tax on the downstream counties on treated water. The beneficial use had technically already occurred in the county of origin, Washoe.
Chairman de Braga called for witnesses in opposition to A.B. 468.
Pete Goicoechea, Eureka County Commissioner, distributed a handout (Exhibit D) and commenced testimony in opposition to some of the language of A.B. 468. He voiced concern over the inevitable departure of mining operations from the rural county and the resulting impacts. Mine dewatering permits were temporary, however secondary applications could be permitted appropriations. Mr. Goicoechea referenced NRS 533.438 and the clause that enabled the county of origin to impose a tax; however, no county had ever imposed that tax.
Mr. Goicoechea had no issue with the state engineer approving a petition to impose the tax on water migrating from the county. He requested the bill be amended with the removal of Section 4 that he judged to have no mechanism to look at the quality or quantity of water being discharged. Barrick Mine discharged 70,000 gallons of water per minute into the Humboldt River. Mr. Goicoechea acknowledged beneficial uses of the mine dewatering operations; however, downstream users were becoming increasingly dependent on that source of water. The law said there would be no impact if the mines closed, but Eureka County disagreed. He recommended the state engineer give serious consideration to the approval of the $6 tax, and Section 4 appeared to disallow that option.
Chairman de Braga asked, if Section 4 were modified, would the state engineer be granted the ability. Mr. Goicoechea reiterated the law did not apply to mine water even though it was appropriated and beneficially used. Chairman de Braga asked the witness if he had read the proposed amendment. After perusing the amendment, Mr. Goicoechea stated the key language was “may” and, with some additional work, the bill could be further modified. He reiterated his need for the state engineer to review all permits that discharged or migrated water from a county.
Assemblyman Marvel asked if any water was being discharged out of Eureka County, and, if so, how much was going down the river. Mr. Goicoechea replied in the affirmative and clarified the volume was an estimated 22,000 acre-feet annually.
Karen Peterson, Attorney for Eureka County, responded by saying the statute in place was a deterrent to helping counties, such as Eureka, keep the water within the boundaries of the county of origin. The deterrent effect was desirable and, in her opinion, Section 4 would compel counties to protest the water right applications and litigate. If the effect of the permit was to allow the flow of water outside the county of origin, protests would have to be filed by the county. The language in Section 4 was too broad and would have unintended consequences.
Assemblyman Collins referred to the 1999 legislative session and an issue regarding 50,000 acre-feet of water from the Humboldt Sink flowing into the Carson Sink near Fallon. Pete Goicoechea recalled the controversy and attributed it to the big water years of 1995 and 1996. The concern centered on the water reaching the Stillwater area. Mr. Goicoechea stated the water was still leaving northeastern Nevada, resulting in a cone of depression. Because that depression extended into Elko County, he predicted that county would be impacted at some point. He concluded by saying the imposition of the tax would serve as a deterrent to the loss of water down the river.
Warren Russell, Elko County Commissioner, resumed testimony and read from a prepared statement (Exhibit E). In summary, Mr. Russell recommended the addition of an amendment to A.B. 468. It would require the state engineer to determine if the water-right applicant was unable to apply that water for any beneficial use in the county or origin. Further, it would exclude secondary applications from the Section 4 exemption. Finally, it was the recommendation of Mr. Russell that the $6 tax be raised to $8 to capture the effects of inflation since 1991.
Chairman de Braga asked if his amendment allowed for the appropriation of that water. Karen Peterson offered to respond. She explained the amendment covered the situation in which if an exemption was being allowed, the state engineer would have to review it to determine if there was a secondary beneficial use in the county of origin. Ms. Peterson called the committee’s attention to the amendments (Exhibit F).
Chairman de Braga asked if it would allow the county or anyone to secondarily appropriate the waters. Ms. Peterson replied it did not. The intent was to require the state engineer to determine there was no additional secondary use within the county of origin before it was allowed to flow into a neighboring county. Chairman de Braga stated she was not entirely convinced.
Assemblyman Collins illustrated an example of a mountain where the county line was located two-thirds of the distance downhill. He asked the witness if the county was seeking that flow of water or water that was pumped. Mr. Goicoechea replied it was ground water that had been pumped and had become surface water. The addition of that ground water to the surface water of the Humboldt River technically allowed for downstream use of ground water.
Assemblyman Collins summarized by saying that some folks were mad at the county for flooding, and others were happy with the improved fishing. Mr. Goicoechea agreed and added, in the wet years, we should let the surface water run downstream, but not deliberately put pumped ground water into the system.
Assemblyman Marvel commented that irrigation users of the Humboldt River water were only entitled to their decreed rights regardless of the source of the water. Mr. Goicoechea replied there were years where half of Rye Patch was pumped water from mining operations. Everybody benefited.
Mr. Turnipseed asked to make an additional statement. He had no problem with the escalation of the fees. The secondary permits and uses were associated primarily with storage and sewage effluent. The use of the words “secondary use” in the proposed amendments introduced confusion in the language of the existing statute. He requested clarification. Chairman de Braga agreed and stated it appeared water could be appropriated for some other use.
The hearing was closed on A.B. 468 and was opened on A.B. 410.
Assembly Bill 410: Makes various changes relating to guides and outfitters. (BDR 54-1190)
Assemblyman Carpenter, District 33 and sponsor of the bill, commenced testimony. He first made an announcement that settlement of the Jarbidge case had been reached by all parties.
Assemblyman Carpenter explained the intent of A.B. 410 was to promote a system of self-governing on the part of hunters and outfitters; however, he immediately voiced concern that many of the sections of the bill did not conform with Nevada law. As such, modifications would be required. The section that granted the guides the hunter’s fees would be disputed by the Nevada Division of Wildlife (NDOW). If the hunters and guides were to assume self-governance, it would behoove them to be self-sustaining from the fees generated by their activity. Opposition from NDOW was evident in that they did not want a state employee to be appointed to the newly proposed Guide Board.
Assemblyman Carpenter emphasized the economic value of hunting and guide services in the rural areas. He acknowledged, however, that major revision would be required in order to comply with Nevada law.
Chairman de Braga asked if he was planning to draft an amendment. Assemblyman Carpenter replied he would like to listen to the testimony first and then meet with the various stakeholders to work out acceptable language for the bill. Chairman de Braga suggested scrutiny of Section 10. It appeared to give too much opportunity to operate outside the law. The funding mechanism to maintain a board would also need evaluation by a subcommittee. Assemblyman Carpenter concurred.
Jack Reid, representing the Back Country Horsemen of Nevada (BCHN), read from a prepared statement (Exhibit G) in support of A.B. 410. He voiced concern over only one issue and that related to Section 10, paragraph 3(c). Non-profit organizations would be disallowed from providing outfitting or guide services. Mr. Reid explained the BCHN had originally been chartered to ensure the presence of recreational livestock in the backcountry. His organization donated many volunteer hours to projects (e.g., Tahoe Rim Trail), hoping to cultivate a positive impression of The BCHN upon those agencies. Mr. Reid stated BCHN did not intend to compete with professional outfitters. He asked that Section 10, 3(c) be deleted.
Todd Schwandt, a licensed guide and President of the Nevada Outfitters and Guides Association, distributed a handout (Exhibit H) and commenced testimony in favor of A.B. 410. He called the committee’s attention to their economic survey that revealed hunting and outfitting to be million dollar industries for rural Nevada. There was an increasing number of master guides (112) in the state at a time when big game tags and herds had seen no increases. That was compounded by a situation where nonqualified persons were offering guide and outfitting services in Nevada.
In Mr. Schwandt’s opinion, the Nevada Division of Wildlife was understaffed to perform field inspections of hunting parties. Enforcement of illegal outfitters required attention in the field. There were known cases of tags that were allotted to outfitting services being used instead for family members and not for clients from out-of-state. Additionally, being a guide in Nevada required only a simple two-page application and a check made out to the Department of Wildlife. That simplicity reflected a general lack of standards for the profession.
Chairman de Braga requested clarification on how the tags were allotted to outfitters. Mr. Schwandt explained it was a lottery drawing, and each master guide was allowed up to 30 clients with tags. With the doubling of the number of master guides, there was no assurance a service could economically survive with so few allotted tags.
Mr. Schwandt urged the committee to enact legislation that would deal with the increasing number of illegally operating guide services. It was his judgment that the financing for enforcement would be through 50 percent of the deer hunting fees assessed against the nonresident guided hunt tags. There were 400 tags at $300 each, generating $120,000 by the guided hunting industry. He added an additional $365,000 each year would be raised through fees imposed on the guide industry itself. An increase would be made in the non-resident guide tag to $600. The resident tag would be $300, and the background application for resident subguides would be raised to $800.
Mr. Schwandt expressed frustration with the Nevada Division of Wildlife. He had approached that agency on numerous occasions requesting that industry standards be tightened and enforced. He declared they had made no progress in the requests. Mr. Schwandt appealed to the committee for help in the matter.
Assemblyman Claborn requested clarification on the definition of a subguide. Mr. Schwandt responded a subguide was an individual who worked for a master guide. Nevada was one of a few states that used that terminology. Other areas used the terms outfitter (i.e., master) and guide (i.e., subguide). Mr. Schwandt stated it would be preferred to be in alignment with other western states in the terminology. In response to Assemblyman Claborn, Mr. Schwandt clarified the subguide had to be licensed.
Tom Atkinson, Chief Game Warden for the Nevada Division of Wildlife (NDOW), declared his agreement with the concept of self-governance. It was successful in Idaho, however there were concerns on the part of NDOW. The language in Section 42 that would divert 50 percent of fees was considered by NDOW to be a diversion of funds. Under the federal guidelines, it would threaten more than $10 million in federal support. As such, Mr. Atkinson asked the provision be stricken from A.B. 410.
Mr. Atkinson’s second concern related to the lack of reference to current law guiding the way business was conducted (i.e., Chapter 504.390). There was no clear delineation in the proposed bill that would have deleted those sections.
Finally, Mr. Atkinson expressed concern over the recommendation that a commissioner and a game warden sit on the Guide Board. It was preferred that NDOW not be a member of the board. Participation would require review of yet another program by NDOW that was unfunded, thereby taking away from those activities that were funded. He concluded by saying that NDOW would be happy to work with the interested parties.
Donna Berg, representing the Big Smoky Valley Outfitters, distributed a handout (Exhibit I) and resumed testimony in opposition to A.B. 410. Her principal concern was the removal of authority from the Nevada Division of Wildlife. Self-governance, in concept, was good: however, Ms. Berg was pessimistic about the qualifications of the proposed members of the guide board. Additionally, their authority would allow the determination of geographical areas for operation of outfitters and dictate the species of game that could be hunted. As such, Ms. Berg viewed the plan to be a duplication of services, potentially very costly to all outfitter groups, and, further, the power of the board would be excessive.
Ron Biggs, Wild Life West Guide, spoke in support of A.B. 410. His concern related to the competition for tag allocations. In 1992, there were five outfitters in the lottery drawing for 30 outfitter tags. Today, there were 20 outfitters competing for the 30 tags. No regulation was in place to limit the number of outfitters operating in rural Nevada. Mr. Biggs cited one person from New Mexico who was a booking agent with over 350 applicants for the 30 tags. The New Mexico agent subcontracted with guides in Nevada during the hunting season. Mr. Biggs concluded there was a critical need for the creation of a guide board.
Assemblyman Claborn asked if subguides were cheaper when borrowed from master guides. Mr. Biggs replied they were cheaper to hire and, for $75, they secured another subguide license under the name of another master guide. Assemblyman Claborn asked if the loophole should be closed that allowed persons other than master guides to be hired. Mr. Biggs explained there were many guides who, by choice, were not working as master guides. With that designation came the burden of state industrial insurance, permits, and other paperwork entanglements.
Assemblyman Claborn acknowledged the problem and expressed the need for a solution.
Bill Gibson, a licensed Outfitter for Elko Guide Services, stated of the 143 guides licensed in Nevada, only 46 belonged to the Outfitter and Guide Association. The remaining two-thirds were not permitted and were described as being from out-of-state or as “slipping through the cracks.” Mr. Gibson could see no reason for out-of-state booking agents to be licensed as Nevada master guides. The system was broken, and it needed to be fixed. Idaho had a Guide Board in place which appeared to be an effective vehicle for investigations.
Chairman de Braga, seeing no additional witnesses, closed the hearing on A.B. 410. The bill was assigned to a subcommittee with Assemblyman Claborn, Assemblyman Humke, and Assemblyman Carpenter (chairman).
Chairman de Braga announced a quorum was present. A waiver of a joint standing rule was in place, and Chairman de Braga called for a committee introduction of BDR 45-1516 (A.B. 662).
· BDR 45-1516 – Revises provisions relating to authorization for expenditure of money from the Heil Trust Fund for wild horses.
ASSEMBLYMAN BACHE MOVED TO INTRODUCE BDR 45-1516.
ASSEMBLYMAN BROWN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.
The hearing on A.B. 631 was opened.
Robert Gronowski, Administrator, Nevada Department of Agriculture, distributed a handout (Exhibit J) and commenced testimony in support of A.B. 631. He read from a prepared statement.
Assembly Bill 631: Revises provisions governing quarantines proclaimed by state quarantine officer. (BDR 49-563)
Mr. Gronowski explained the amendments clarified the authority of the Nevada Department of Agriculture to adopt quarantine procedures to prevent the entry, establishment and spread of non-native invasive species in Nevada. The amendments also delineated their authority to conduct inspections, control, treat, and eradicate any newly introduced invasive species. He called the committee’s attention to a recent article concerning the potential danger posed by the redback spider and the redfire ant.
Chairman de Braga asked if the quarantine authorities had jurisdiction over livestock. Mr. Gronowski replied there was a separate statute that dealt with livestock quarantines. The bill under discussion dealt with plant pests of economic, environmental, and public health threats.
Assemblyman Claborn commented on the deadly red spider. Mr. Gronowski feared the rapid spread through trade and movement of people. The red spider was described as a tropical species and very deadly.
Chairman de Braga asked for clarification if the bill would give his agency authority to deal with a new invader. Mr. Gronowski replied in the affirmative and explained they would either establish a quarantine to exclude it or, if detected, to rapidly respond and destroy it.
Chairman de Braga closed the hearing on A.B. 631 and called for a motion.
ASSEMBLYMAN NEIGHBORS MOVED TO PASS A.B. 631.
ASSEMBLYMAN MORTENSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.
The meeting was adjourned at 3:30 p.m.
RESPECTFULLY SUBMITTED:
June Rigsby
Committee Secretary
APPROVED BY:
Assemblywoman Marcia de Braga, Chairman
DATE: