MINUTES OF THE meeting

of the

ASSEMBLY Committee on Natural Resources, Agriculture, and Mining

 

Seventy-Second Session

March 5, 2003

 

 

The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:28 p.m., on Wednesday, March 5, 2003.  Chairman Tom Collins 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:

 

Mr. Tom Collins, Chairman

Mr. Jerry D. Claborn, Vice Chairman

Mr. John C. Carpenter

Mr. Chad Christensen

Mr. Jason Geddes

Mr. Pete Goicoechea

Mr. John Marvel

Mr. Bob McCleary

Mr. Harry Mortenson

 

COMMITTEE MEMBERS ABSENT:

 

Mr. Kelvin Atkinson (excused)

Mr. Marcus Conklin (excused)

Ms. Genie Ohrenschall (excused)

 

GUEST LEGISLATORS PRESENT:

 

None

 

STAFF MEMBERS PRESENT:

 

Linda Eissmann, Committee Policy Analyst

Erin Channell, Committee Secretary

Terry Horgan, Transcribing Secretary

OTHERS PRESENT:

 

Helen Chenoweth-Hage, Pine Creek Ranch, Nevada

Wayne Hage, Pine Creek Ranch, Nevada

Dr. Angus McIntosh, New Mexico State University, Las Cruces, New Mexico, Range Improvement Task Force

O. Q. Chris Johnson, Nevada Commission for Full Statehood

Janine Hansen, Nevada Commission for Full Statehood

David Schumann, Nevada Commission for Full Statehood

 

Chairman Collins, stating a quorum was present, began the meeting by remarking that the Committee would be hearing two presentations, one by the Nevada Live Stock Association and one by the Nevada Commission for Full Statehood.  Chairman Collins also reminded guests that there was a certain level of decorum expected of them during Committee meetings, and that picketing and signs belonged outside the Legislative Building, and not in the hearing rooms.  He also requested no references be made to any current legislation.

 

Chairman Collins introduced the Honorable Helen Chenoweth-Hage, former Idaho Congresswoman, and asked her to proceed with her presentation.

 

Ms. Chenoweth-Hage introduced Dr. Angus McIntosh, an instructor at New Mexico State University, Las Cruces, New Mexico, and explained that he would begin their presentation with a general overview of his doctoral thesis on western land and water law that used the Pine Creek Ranch as a model for economic value.  The second person to testify, she added, would be her husband, Wayne Hage, who would present an overview of the impact of the Hage decision.

 

Chairman Collins asked if Ms. Chenoweth-Hage wanted questions held until the end of the presentation.

 

Ms. Chenoweth-Hage agreed with the suggestion.

 

Dr. Angus McIntosh, New Mexico State University, Range Improvement Task Force, presented his dissertation entitled Property Rights on Western Ranches:  Federal Rangeland Policy and a Model for Valuation (Exhibit C), that focused on two objects:  to determine if there was any statutory basis for property rights in western ranches, and to develop an appraisal method that would follow standard appraisal practices that could be applied in determining the value of the split-estate ranches.

 

Dr. McIntosh, providing a brief summation of his dissertation, claimed that conventional appraisal methods failed to consider the highest-and-best-use and replacement costs when evaluating split-estate ranches.  He had developed a five variable evaluation model incorporating water rights, rights-of-way, range improvements, grazing value, and patented lands and had applied the model, using a case study approach, to the Pine Creek Ranch in central Nevada.  The model emphasized highest-and-best-use and a replacement cost appreciator approach as compared to a conventional evaluation method that emphasized sale comparisons and income capitalization.  Dr. McIntosh’s model indicated a fair market value 4½ to 150 times greater than that derived from the conventional valuation approach.

 

Dr. McIntosh explained that the difference in value was due mainly to the failure of conventional appraisal methodology to consider alternative highest-and-best- use value of water rights, which in the case of the Pine Creek Ranch, was for quasi-municipal use.  He also noted that conventional appraisal methods also failed to consider the value of ranchers’ range improvements and rights-of-way associated with their water rights, range improvements, and patented lands.  In addition, Dr. McIntosh indicated that it appeared government regulatory actions had possibly exerted undue stimulus and created artificially low property values.

 

Chairman Collins indicated he would provide copies of Dr. McIntosh’s dissertation to Committee members.

 

Wayne Hage, explaining that he was the plaintiff in Hage v. United States, testified that on January 29, 2002, he received a final opinion and finding of fact on the property phase of the trial.  He noted that following the January 2002 opinion, the United States immediately filed a “Motion for Partial Summary Judgment of Plaintiffs’ Claim of Taking Based Upon Denial of Access to Stockwaters and Forage.” 

 

Mr. Hage read excerpts from the Court’s Order, filed February 5, 2003, (Exhibit D) that had found in favor of the Hages.  He stated that they had provided evidence that they owned range rights, water rights, and forage rights on the allotments.  The United States rebutted, saying the Hages’ water and range rights were owned under state law, not federal law, and therefore the federal government did not recognize them.  The Court disagreed, saying only the states could create property.  Several times the United States claimed the Hages needed grazing permits to use their rights, but each time the Court denied that claim.

 

Mr. Hage, reading from the “Final Opinion and Finding of Fact” issued by the Court on January 29, 2002, stated, “This court finds that plaintiffs showed by preponderance of evidence that the plaintiffs and their predecessors appropriated and maintained a vested water right in the following bodies of water in the southern Monitor Valley.  In addition to certificates of appropriation that were entered into evidence, the plaintiffs also submitted an exhaustive chain of title, which showed that the plaintiffs and their predecessors-in-interest had title to the fee lands where the following springs and creeks are located.”  Mr. Hage directed Committee members’ attention to pages 37 through 40 of the booklet entitled Securing Your Property (Exhibit E) that listed the creeks and springs mentioned in the Opinion.  Mr. Hage noted that Appendix A of the Opinion, listed in footnote 11 at the bottom of the page, listed every water source of any kind, and the explicit boundaries and dimensions of the Hages’ Monitor Valley property interests.

 

Mr. Hage pointed out that the United States Supreme Court had differentiated between “fee” lands and “fee patented” lands and referred the Committee to a court case entitled Yakima v. The Confederated Tribes.  He indicated that fee lands, lands where the United States was the underlying naked titleholder to the rock, the dirt, and the minerals, were what the court said the Hages had title to.  Mr. Hage explained that what he owned was the fee, the inheritable right to use the lands for any lawful purpose.  Mr. Hage explained that the way the fee had been acquired was through Nevada state water law because his predecessors-in-interest had put the water to beneficial use for watering livestock and harvesting the forage in that area.  As a result, he noted, when that right vested, it became a fee interest, the same interest the Internal Revenue Service (IRS) taxed when an individual died and their estate was settled.

 

Mr. Hage pointed out the argument made to the court was that they either had an inheritable right to use the grazing allotments, as a result of the ownership of the water through Nevada state law; or all of the land disposal acts of Congress from 1866 forward, either collectively, one individually, or several together, resulted in a grant of that interest to the people, or a surface estate right to the land.  Mr. Hage emphasized that the court made it very clear that the Hages did not have a surface estate right; however, the court made it abundantly clear that the Hages did own the fee, the inheritable right to use those lands for any lawful purpose.

 

Ms. Chenoweth-Hage directed Committee members’ attention to a quote on page 2 of the booklet, Securing Your Property, and explained that what the author, Thomas Sowell, was saying was that the value of property was a set of options and not a physical thing.  Ms. Chenoweth-Hage warned that in rural areas, option-by-option, cattlemen were unable to use the options originally granted to them.

 

Referring to page 25 of the booklet, a section titled “Introduction,” Ms. Chenoweth-Hage noted a judge had defined what he called “physical options” that he found in the fee lands.  She pointed out that the court found “that plaintiffs had met the threshold test for ownership and had a property interest in the vested water rights claimed.  Concomitant with this right, plaintiffs have a property interest in the ditch rights-of-way and forage rights appurtenant to their water rights.”  She noted that was one of the first times a court of proper jurisdiction had really admitted that the ranchers owned the forage.

 

Ms. Chenoweth-Hage, referring again to the naming of all water sources in the Court’s finding in their court case, emphasized that the judge in his decision had taken into account the entire Pine Creek Ranch. 

 

Mentioning she had not been certain of the legal meaning of the word “find,” Ms. Chenoweth-Hage directed Committee members’ attention to pages 12 and 13 of the booklet and quoted a Minnesota decision that said, “Facts stated by trial court in a memorandum made part of the decision, is not inconsistent with facts specifically found, become part of the ‘findings’ and the Supreme Court is bound to accept the facts so found on appeal.”  She stressed that a finding of fact, once found on the trial court level, was not reviewable in the appellate or Supreme Court levels.  As a result, Ms. Chenoweth-Hage emphasized, the judge’s finding of fact that the Hages had title to the lands the judge described on pages 37 and 38 could not be disputed.  She added that a “finding of fact” was different from an “opinion,” or a “judgment,” or a “determination.”

 

Referring to “vested water rights”, Ms. Chenoweth-Hage quoted a 1939 decision listed on page 14 of the booklet, “It was only a vested right which cannot be taken away except by due process of law.”  She also quoted two different court cases that stated, “Licenses and permits are generally not considered property in any constitutional sense.”  Ms. Chenoweth-Hage explained that they could never be compensated for the loss of the grazing permit, because it was not considered “property.”  

 

Going back to the discussion of vested rights, Ms. Chenoweth-Hage read another quote on page 16 of the booklet from a Puerto Rico decision that stated, “A ‘vested right’ is one which is absolute, complete and unconditional to exercise of which no obstacle exists and which is immediate and perfect in itself and not dependent upon a contingency.”  Another quote from the same page read, “A ‘vested right’ is a property interest so substantial in character that its destruction or deprivation cannot be justified by the objectives in view.”  In clarification, Ms. Chenoweth-Hage explained to the Committee that should the Legislature decide to diminish a party’s vested property rights, they could do it, but it would be viewed by the due process clause, the Fifth Amendment to the Constitution, as a “taking.”  She noted that the Nevada Constitution also had a due process clause.

 

Ms. Chenoweth-Hage discussed the meaning of the word “title” as used by the judge in the Hage decision.  She referred to the bottom of page 17 of the booklet and quoted, “Every right to land is a ‘title,’ and if a person has actual or constructive possession of property or right of possession, he has a title thereto, though another person may be owner.”  Ms. Chenoweth-Hage explained that what the judge had said was that there was a property interest in that land which was above the dirt, the rock, and the mineral that the government had retained in trust for future disposition under the general mining laws.  She quoted a reference to “ownership” elsewhere on page 17, which defined it as the “right to possession and use to the exclusion of others, the term is broader than either ‘title’ or ‘possession’ and includes both.”  Ms. Chenoweth-Hage mentioned that legally, the courts had ruled that “lands” also meant the surface waters and the water under the land. 

 

Ms. Chenoweth-Hage queried what the word “fee” meant and directed the Committee’s attention to the top of page 20 of the booklet, and quoted, “The grant of a ‘fee’ in land conveys to the grantee complete ownership, immediately and forever, with the right of possession from boundary to boundary.”  She noted that even though the judge had used the word “fee” alone, in the other annotations connected with the word, the word meant “fee simple, absolute.”  Quoting the fifth annotation on page 20, she read, “The word ‘fee’ is used interchangeably with ‘fee simple’ and ‘fee simple absolute.’  It implies an unlimited estate of inheritance when used without any qualifying adjective.” 

 

The definition of “public land,” Ms. Chenoweth-Hage emphasized, had fueled a raging debate in the West as well as in the East, and was a problem she had frequently dealt with in Congress.  She directed the Committee’s attention to the third annotation on page 21 of the booklet under the category “Public Land” and emphasized that the quote was from a United States Supreme Court decision that had never been overturned in whole or in part.  Ms. Chenoweth-Hage read, “It is well settled that all land to which any claims or rights of others have attached does not fall within the designation of public land.”

 

Ms. Chenoweth-Hage, stating that once the land was opened up for settlement under the federal laws, people went onto the public domain, took possession, mixed their labor with the land, put the water to beneficial use, and then title was recognized by the state.  She pointed out that the judge in the Hage decision went over and over the fact that title must be recognized through the state, and then the state protected those property rights, and also taxed them.  Ms. Chenoweth-Hage emphasized that the state taxed the allotments, because of the increased capacity that the allotments afforded for cattle grazing.

 

She pointed out that Judge Smith, in the Hage decision, had recognized that the Hages had private property rights.  She reiterated that if the Hages had not owned the lands, and they were indeed public lands, then there would not have been a “taking.”  However, if the Hages owned their property, as the judge determined in his finding of fact, then, she emphasized, there might very well have been a “taking.”

 

Chairman Collins thanked the group for their presentation, adding that he was very impressed by it.  Referring to Ms. Chenoweth-Hage’s assertion that “they could be taxed,” Mr. Collins asked if that referred to state or federal tax.

 

Mr. Hage replied that when an owner of a ranch died and someone inherited, the Internal Revenue Service assessed a tax.  He described a neighboring rancher who had gone through two estate settlements.  The ranch, he noted, was almost 99 percent grazing allotment, with the remainder being “fee patented” land with almost all the improvements, buildings, houses, etc. being on the fee patented lands.  Mr. Hage emphasized that in both settlements, over 70 percent of the amount assessed by the IRS for estate tax purposes was on the grazing allotments, those lands that the Forest Service, the Bureau of Land Management (BLM) and the environmentalists had been saying were “public” lands.  Mr. Hage pointed out that the IRS consistently assessed ranch estates in that manner.

 

In explaining taxation of the local county level, Mr. Hage used a hypothetical ranch as an example: He assumed there was a 320-acre ranch that would carry 1 cow per acre for 12 months, which would equal 32 cows, or 32 animal unit months (AUMs).  An appraiser would multiply the 32 AUMs by the value of each one and come up with an appraised value upon which to assess a tax.  However, Mr. Hage explained, if that same 320 acres had a grazing allotment associated with it that added 288 more AUMs, for a total of 320 AUMs, the tax bill would still be sent to the original 320 acres, but the value added by the additional 288 units would be the assessed value, so the figure to base the tax on would be 10 times higher.  The tax bill still went to the same 320 acres of fee patented land and not directly to the allotment, Mr. Hage reiterated, but the county did get additional taxes as a result of the value added.

 

Assemblyman Marvel inquired whether the “takings” element of the Hage case had been adjudicated yet.

 

Mr. Hage replied that the case was a bifurcated one and the first thing the court had ruled on was who owned the grazing allotments.  As previously stated, on January 29, 2002, the court had given its final opinion and finding of facts on the title phase by finding that the Hages had title to the fee lands, which were their grazing allotments.  Now, he added, they were in the process of setting a trial date to determine damages owed to the Hages by the federal government for having shut their cattle operation down for 12 years. 

 

Assemblyman Marvel asked whether the federal government had recognized that “it was a taking.”

 

Mr. Hage responded that they did recognize it was a taking.

 

Mr. Marvel mentioned that he had always assumed “fee simple” entitled an owner to the rocks, the land, and “everything.”

 

Mr. Hage agreed that was a common misconception and added that property was the rights, claims, and options, those invisible rights referred to by Thomas Sowell on page 2 of the booklet.  Mr. Hage again quoted that “fee is used interchangeably with fee simple and fee simple absolute.  It implies an unlimited estate of inheritance when used without any qualifying adjective.”  Referring to the British Commonwealth where much of our land use laws had originated, he noted that “fee lands” were estates that had been passed down through families for hundreds of years, and had been bought, sold, and traded.  Mr. Hage explained that the right to use those lands was what was being bought, sold, and traded.  The King or Queen, he explained, was the underlying titleholder of the rock, the dirt, and the minerals.  In most of the western United States, on the unpatented lands, the fee was conveyed in the way of grazing allotments, he pointed out.  The United States remained the underlying, “naked title holder” to the rock, the dirt, and the minerals.  The mineral rights, he reminded Committee members, had been retained under the mining laws for separate disposal.

 

Assemblyman Marvel asked whether the Hage allotments were BLM or Forest Service lands.

 

Mr. Hage replied that throughout the trial he had maintained that they were neither BLM nor Forest Service, but were the Hage allotments, and that was what the court agreed with.

 

Mr. Marvel inquired whether the commensurability was based on water or land.

 

Mr. Hage explained that all the lands were public lands at one time.  Then people came onto them, mixed their labor with the land, took possession of them, and the property right was recognized under state law.  By contrast, he noted, one laid claim to a range by virtue of where the water rights were, and water rights got their status as property from state water law.  He added that the individual who “took up” certain areas, such as springs and creeks, would also probably have a piece of fee patented property, which would give him ownership of the dirt, rocks, and minerals and would also give him the right to use the ground.

 

Mr. Hage added that when the Forest Service adjudication occurred, between 1907 and 1919, the Forest Service asked where a ranch’s water rights were and whether it could be proven that they had been used for three years prior to the rancher making the claim.  Next the rancher would be asked if there were a piece of base property somewhere that would tie to the water rights to create a year-round ranching operation or an “economic unit.”  If a rancher had an economic unit, he could participate in the adjudication process.  Mr. Hage explained that during the adjudication process, an individual still had to have a permit and pay fees, which separated those who had property rights from those who did not.

 

At the end of the adjudication, he continued, the need for the permit and the need for the fee ended, but why it continued and was institutionalized was another story, and was what the Forest Service and BLM referred to as “bridging the permits” or “offer and acceptance.”  “Commensurability” referred to the parcel of land being within at least 20 miles of the base property, so the two could tie together to become an economic unit.  If they could, they were then considered commensurate.  Mr. Hage stated that in desert areas where there was no base property in the way of fee patented land, oftentimes the water right itself became the base property and at that time, when the adjudication was done, they issued what were called “water based permits.”

 

Assemblyman Marvel asked whether Mr. Hage had a mixture of both types of permits.

 

Mr. Hage responded that all of his permits were land-based.

 

Mr. Marvel inquired what the basis for the denial of Mr. Hage’s use of his allotment had been.

 

Mr. Hage stated that the basis for their denial came down to the value of water.  He noted that there were global companies trying to get control of the water and pointed out the similarity with the Owens Valley where the Forest Service was used to drive the ranchers out of business to get that water for Los Angeles.  Mr. Hage believed environmental groups were using the federal land management agencies to carry out that agenda by placing so many environmental rules and regulations on a ranch that it was driven out of business, and ultimately sold for pennies on the dollar. 

 

Assemblyman Carpenter asked what the time frame for the compensation part of the legal action might be.

 

Mr. Hage estimated that the taking and compensation phase of the trial would be completed in approximately one year.

 

Mr. Carpenter inquired whether Mr. Hage was currently using his allotments.

 

Mr. Hage responded that he was using part of them, but restocking with cattle to utilize all his allotments would be expensive because he had been out of business for 12 years.  He also noted that in the interim, the BLM had leased out his allotments to other people.  The Forest Service as well as the BLM appeared to be ignoring the court’s decision, he added.  Mr. Hage mentioned that one benefit of a United States Court of Claims judgment was that in virtually every case, the court costs and legal fees would be paid by the government.  In addition, Mr. Hage explained, whatever compensation would be awarded to the Hages ran at compound interest from the date of the taking.

 

Chairman Collins, noting that even after a court had ruled that the phrase “under God” was unconstitutional, people were still continuing to recite the Pledge of Allegiance, asked if Mr. Hage believed the federal agencies were waiting for further instructions or further court case decisions.

 

Mr. Hage agreed that the agencies might be waiting for additional developments, as Mr. Collins had suggested.  He added that every time the agencies refused to acknowledge the court’s decision, it bolstered the Hages’ position with the court.  Mr. Hage pointed out that the government had made a motion for summary judgment three times, saying that the Hages’ needed a grazing permit.  After the final decision and finding of fact in January 2002, the government responded that he still needed a grazing permit.  February 5, 2003, the Court addressed that in an “Order” that Mr. Hage quoted, saying “Plaintiffs established at trial, the stockwater rights were possessed by Plaintiffs’ predecessors in interest long before the grazing permit system was established by government . . . the court is not of the opinion that lack of a grazing permit that prevents access to federal lands can eliminate Plaintiffs’ vested water rights that predate the creation of the permit system.”

 

Mr. Hage emphasized that out of all the cases brought over the years on the land and water right issue, only two had been successful, his and one other in 1911.  Both used the same argument, he noted.  The earlier one, Curtain v. Benson, concerned Yosemite National Park where Curtain was a rancher in what became Yosemite National Park.  The new park superintendent, Benson, told Curtain he needed a grazing permit to run cattle in the park.  Curtain refused because he ran cattle before it became a national park.  The U.S. Supreme Court agreed with Curtain, affirming that Curtain was grazing cattle before the establishment of the park and its permit system.  Mr. Hage reiterated that was what the U.S. Court of Federal Claims had found, that he and his predecessors had been on the land and established their rights long before there was a United States Forest Service or BLM permit system.

 

Ms. Chenoweth-Hage, replying to an earlier question by Assemblyman Carpenter, noted that on page 29 of the booklet, the judge had written that this was a final opinion on the property phase.  She added that the finding indicated that Hage and his predecessors-in-interest had a vested property right and had established an exhaustive chain of title.  The fact that Hage had title to the fee lands was a finding of fact and not reviewable at the Appellate Court or the Supreme Court level, she emphasized.

 

Chairman Collins asked if the Hages paid any allotment fees.

 

Mr. Hage answered that he had permit arrangements with both the BLM and the United States Forest Service, but that both had cancelled the permits, and since then he had not paid.

 

Chairman Collins stated, “You were paying the fees until they cancelled them.”

 

Mr. Hage agreed that was correct and said that the Court had addressed that issue in 1996, pointing out that plaintiff need not get a permit.  The Court also pointed out that any time requirements for a permit rose to the level of the taking of the property, then one was no longer required to get a permit and the issue of compensation also arose.

 

Assemblyman Goicoechea asked Mr. Hage to explain the acts that had created ditch rights, rights-of-way, and when in fact a vested water right was created.

 

Mr. Hage responded that the seminal act commonly referred to in United States law in the west was the Act of July 26, 1866.  The Act, he explained, acknowledged local law and custom and rules of the court, and originated in the Nevada Legislature with a Senate and Assembly Joint Resolution adopted in January 1865.  The Act applied to California, other western states, and lands that came in with the Treaty of Guadalupe-Hidalgo and ultimately applied to all of the “prior appropriation states,” which were basically those states west of the 100^th meridian, the line between Kansas and Colorado.  The Act, he explained, stated that the old Spanish law of land settlement, which allowed people to take up a piece of fee-patented land, turn their livestock out on the ranges, and utilize the water for stock watering purposes, would be accepted.  Mr. Hage claimed that most stock ran in common until ranching became more organized, at which time it was decided to adjudicate the ranges, which were then adjudicated as being commensurate with certain pieces of fee-patented land.  He pointed out that the first act of the California Legislature, when it became a state, was to reaffirm all land settlements, brands, marks, and range law.

 

Responding to Mr. Goicoechea’s question about vested water rights, Mr. Hage explained that any water right established prior to the advent of statutory water law in the state of Nevada, which was in 1905, was a vested water right.  The Nevada Supreme Court had also pointed out that any water right upon which one had a certificate was also a vested water right.

 

Dr. McIntosh added that within his dissertation was a very detailed analysis of the statutory development of water rights laws.  He also mentioned there was information about permits and the permit system, its origins, and statutory basis in the dissertation as well.

 

Assemblyman Marvel mentioned that because of Mr. Hage’s case and other similar ones, the Nevada Legislature had an ongoing Statutory Legislative Committee on Public Lands with a Subcommittee on Takings.  He noted that a previous Nevada Attorney General had ruled that any legislation the Committees enacted “would not be prosecuted by the legal arm of the state government.”  Mr. Marvel asserted that he could see that situation changing because there was a new Nevada Attorney General.

 

Mr. Hage strongly suggested avoidance of the term “public lands,” because once that term was used, he cautioned, one would then be stipulating that there were no private rights.

 

Chairman Collins opined that the name of the interim committee should be changed.

 

Assemblyman Christensen asked about the “Hidalgo case.”

 

Mr. Hage responded that he had referenced the Treaty of Guadalupe-Hidalgo, which the United States adopted and which had led to the land settlement pattern of the ranches in the West.

 

Assemblyman Christensen asked whether the Treaty was referenced anywhere in the materials that had been supplied to the Committee.

 

Mr. Hage answered that in Dr. McIntosh’s dissertation there was the best chronological discussion of the Treaty of Guadalupe-Hidalgo, Kearny’s Code which preceded it, and the subsequent land settlement laws in the United States that were based on that premise.

 

Assemblyman Carpenter inquired what we should call the lands.

 

Mr. Hage replied that one must make a determination for oneself, whether one was a permitee on the public lands or whether one was the owner of a fee allotment.  The proper name for the lands, he suggested, would be “fee lands.”

 

Ms. Chenoweth-Hage referenced a map on page 11 of the booklet, which had been commissioned by the Nevada Legislature, and showed all Nevada’s grazing allotments.  She pointed out that Nevada was nearly completely covered with grazing allotments.  Ms. Chenoweth-Hage also indicated that the lands were open and available for hunting, fishing, and recreation, because the same state law that recognized, protected, and taxed private property rights, also guaranteed hunting, fishing, access for mineral exploration and development, and recreation, so long as they did not interfere with the lawful business of the fee holder. 

 

Dr. McIntosh added that the best way to relate the property interest a rancher had would be to think of it as a very large easement over the land.  He said when viewed that way, it was easy to understand how the federal government could own the underlying naked title, but the rancher could have his own property interest.

 

Chairman Collins opined that the Committee could become the Interim Committee on Easements.  He then thanked Mr. and Mrs. Hage and Dr. McIntosh for taking the time to attend the day’s hearing, and making their presentation.  Chairman Collins expressed what an honor it had been for him and the other Committee members to hear their testimony, and then briefly recessed the Committee.

 

Chairman Collins reconvened the Committee and explained that the next presentation was by the Nevada Commission for Full Statehood.  He reminded the panel of presenters not to address any legislation currently underway in the Legislature.

 

O. Q. Chris Johnson, Chairman, Nevada Committee for Full Statehood, read from his prepared text (Exhibit F) and began his presentation with some history about the Nevada Committee for Full Statehood.  He stated that it was both an activist and an educational organization dedicated to promoting an understanding of the status of the sovereignty of the great state of Nevada, both to the Legislature and the electorate.  He noted that members of the Nevada Committee for Full Statehood had actively participated in demonstrations against the illegal taking of private property by agencies of the federal government, such as the taking of cattle from Ben Colvin, Jack Vogt, Raymond Yowell, and the Dann sisters.  He added that his group had demonstrated in favor of legislation before the 2001 Legislature.

 

Mr. Johnson acknowledged that the state of Nevada was created out of lands taken in the war with Mexico that culminated in the Treaty of Guadalupe-Hidalgo in 1848.  Language in Clause 9 of the Treaty, stated, “shall be formed into free, sovereign and independent states and incorporated into the Union of the United States as soon as possible and the citizens thereof shall be accorded the enjoyment of all the rights, advantages and immunities as citizens of the original states.”  Mr. Johnson noted that several attempts were made to establish statehood, and that on March 21, 1864, Congress passed the enabling act allowing Nevada to submit its Constitution and be admitted to the Union.  Mr. Johnson pointed out a clause in the enabling act, the disclaimer clause, that stated, “the people must disclaim all right and title to all public lands within the bounds of the state and that all such lands shall remain at the sole and entire disposition of the United States.”  Mr. Johnson believed that the disclaimer clause violated the 1848 Treaty as well as the United States Constitution.  He quoted an 1845 case, Pollard v. Hagan, in which the United States Supreme Court had held that “the federal government has no right or power to own, hold, control or exercise any municipal sovereignty over any land of any kind except over the District of Columbia and land it has purchased within the State, with the consent of the State Legislature.”  Mr. Johnson observed that in 1996, Nevadans voted 234,000 to 180,000 to throw out the disclaimer clause.  He maintained that continued federal ownership of Nevada lands was a grave threat to its sovereignty and was bogging it down financially.

 

Mr. Johnson noted that an act passed in 1834 stated if the federal government acted as a “trustee for the benefit of the States in which public lands were located, that the land would be sold into private ownership as soon as possible.”  He also pointed out an 1885 United States Supreme Court case entitled Ft. Leavenworth RR Co. v. Lowe had ruled that where the United States found itself managing large tracts of lands within a state, it did so as an ordinary proprietor.

 

Mr. Johnson claimed that when Nevada became a state, it became sovereign over all the land within its borders.  He added that United States involvement in management of the unsold lands in Nevada had outlived any practical usefulness and that further intrusion by federal agencies in Nevada land management was having a devastating effect on the lives and economics of its rural citizens. 

 

David Schumann, Vice Chairman, Committee for Full Statehood, provided Committee members with a folder full of documents (Exhibit G) to back up his presentation and noted the entire Pollard v. Hagan case was included in the packet.  Mr. Schumann began a “litany of recent victims of agency tyranny,” and mentioned Mr. Wayne Hage’s cattle being “stolen.”

 

Chairman Collins interrupted and asked whether it had been proven in court that Mr. Hage’s cattle had been stolen.

 

Mr. Schumann claimed that the federal agencies had had no right to take Mr. Hage’s grazing permits away.

 

Chairman Collins cautioned that Mr. Schumann was not a judge.

 

Mr. Schumann presented the Committee with a sheet entitled “Denial of Due Process to Citizens of Nevada (Exhibit H) that listed dates, occurrences, and names of people who had been affected by the actions of federal agencies.

 

Mr. Schumann indicated a 1998-1999 Utah study had identified the costs to the West of the high percentage of federal land ownership and annual property tax revenue lost as a result, and had included a summary of estimated financial impacts to the states (Exhibit I).  Referring to Nevada, Mr. Schumann pointed out that with the federal government claiming 87.9 percent of the land had resulted in an annual loss of property tax revenue of $305 million.  He also indicated that the federal government had agreed to pay $1.453 billion when it sold the Nevada land, but that one-time revenue had never been paid. 

 

Mr. Schumann next directed the Committee’s attention to a Nevada Department of Agriculture study (Exhibit J) that showed a 16 percent decline in public land grazing in Nevada since 1980, which, he stated, had a negative effect on rural Nevada communities.

 

Mr. Schumann indicated a map of the United States (Exhibit K) and pointed out all the darkened areas that were owned by the federal government.  He also quoted several parts of Title 43, Chapter 35, subchapter 1, of the United States Code (Exhibit L), mentioning that Section 1733 under “Notes” read that the BLM could hire local law enforcement officials to enforce its laws and regulations, but he pointed out that the BLM had chosen not to, which had resulted in a taking of cattle without due process.  In Section 1701 of the same document, Mr. Schumann read that “Nothing in this Act, or in any amendment made by this Act, shall be construed as terminating any valid lease, permit, patent, right-of-way, or other land use right or authorization existing on the date of approval of this Act (Oct. 21, 1976).”  Further along in that section, he quoted, “Nothing in the Act shall be construed as limiting or restricting the power and authority of the United States or . . . (6) as a limitation upon any State criminal statute or upon the police power of the respective States, or as derogating the authority of a local police officer in the performance of his duties, or as depriving any State or political subdivision thereof of any right it may have to exercise civil and criminal jurisdiction on the national resource lands; or as amending, limiting, or infringing the existing laws providing grants of lands to the States.”  Mr. Schumann testified that when the Code of Regulations conflicted with the United States Code, the U.S. Code would rule and noted one BLM pamphlet read that ordinances and referendums adopted by local governments that attempted to zone or regulate actions on federal lands had no legal effect, because of the Supremacy Clause in the Constitution of the United States. 

 

Mr. Schumann referred to a letter to Ken Jones, Sheriff of Eureka County, Nevada, from the United States Department of the Interior, that stated potential violations of law would arise if anyone interfered with BLM employees lawfully engaged in their assigned duties.  Furthermore, the letter continued, in the event criminal charges were filed against BLM employees performing their statutory and regulatory duties, the BLM would attempt to have the case removed to federal court.  Mr. Schumann pointed out that the states had created the federal government, and not the other way around.  He next referenced a letter from the office of the Nevada Attorney General (Exhibit M) to James Connelley, Administrator, Department of Agriculture (DOA), Elko Office.  Mr. Schumann indicated that Mr. Connelley was a state brand inspector and the letter, even though it stated it was not an official opinion, informed Mr. Connelley that the DOA could only refuse to issue Brand Inspection Clearance Certificates if the BLM were unable to produce proof of legal possession.  Mr. Schumann did not believe the BLM had produced such evidence in the Dann case. 

 

Chairman Collins again stressed that Mr. Schumann was not a judge in any jurisdiction.

Mr. Schumann asked if he could point out when things conflicted.

 

Chairman Collins agreed with that but added that he did not have the authority to make a judgment.

 

Mr. Schumann reiterated that the regulation conflicted with the statutes.  Referencing an article that appeared in the July 2001 issue of the Nevada Rancher, by Don Bowman (Exhibit N), he stated that the United States government used to abide by Article 1, Section 8, Clause 17 of the United States Constitution until 1947, when the Nevada Legislature gave up the right to approve purchases of land by the federal government in Nevada and delegated that duty to the Nevada Tax Commission.  In 1975 Nevada Attorney General List wrote an opinion that the United States could acquire real property in Nevada without the consent of the Legislature.  He also mentioned a judge’s finding that the Forest Service action in halting tree cutting to save the spotted owl in the Sierra Nevada mountains was arbitrary, capricious, and without rational basis.

 

Chairman Collins summarized Mr. Schumann’s testimony and opined that Mr. Schumann wanted to remove federal agencies from the state.

 

Mr. Schumann said those irrational policies had an impact on Nevada and agreed that he would like to see federal agencies removed from the state.  He mentioned a study to bring grizzly bears back by using dead horses to entice the bears into selected areas, which would result in the development of a corridor from Alaska to Mexico.

 

Chairman Collins asked if the federal government was trying to promote grizzly bears into Nevada.

 

Mr. Schumann answered that they were and warned about the effect that might have on horses and cattle.  He noted that Custer County in Idaho had taken action by passing an ordinance against “unacceptable species,” and that the federal government had detoured the program around that county.  In summation, Mr. Schumann requested that the Legislature and the Nevada Attorney General pursue policies that would ultimately take the federal government into the United States Supreme Court.  He believed that the U.S. Supreme Court would take Nevada’s side and all of our land could then be used profitably.

 

Chairman Collins suggested following the Hages’ example, because they seemed to be making some legal headway, and he cautioned against past hostile actions or name-calling.

 

Janine Hansen, Executive Director, Nevada Committee for Full Statehood, expressed her appreciation at being allowed to testify.  She handed out packets to all the Committee members (Exhibit O).  She agreed it was essential to maintain a sense of humor and a sense of perspective.

 

Chairman Collins noted that people who fished appreciated the federal government planting fish in the lakes.

 

Ms. Hansen began her testimony by reading a prepared statement to the Committee (Exhibit P).  She explained that the Nevada Committee for Full Statehood had been founded by her late brother, Daniel Hansen, in February 1991.  The group had rallied around the cause of a Ruby Valley, Nevada, rancher named Cliff Gardner, who ultimately was sentenced to one month in a halfway house and a year on house arrest.  They also demonstrated with others in opposition to the takeover by the federal government of the Black Rock Desert.  She pointed out that, even though 16 of Nevada’s 17 county commissions had voted against the takeover, the Black Rock Desert had still been named a national wilderness area.  Other activities the group involved itself in included protests against government confiscation of Ben Colvin’s and Jack Vogt’s cattle in Esmeralda and Nye Counties, confiscation of Raymond Yowell’s cattle in Elko and confiscation of the Dann sisters’ cattle, all without due process or a court order, according to Ms. Hansen.

 

Ms. Hansen explained that the Nevada Committee for Full Statehood, which sought a return of jurisdiction over Nevada’s lands to Nevada, continued to be active in Nevada politics, testifying during the 2001 Legislative Session and during the interim, holding town meetings, engaging in demonstrations, marching in several Nevada Day Parades, publishing a newsletter, and hosting a Web site.

 

Ms. Hansen reminded Committee members of a legislative briefing that evening which was sponsored by the Nevada Live Stock Association and hosted by Mr. and Mrs. Hage.

 

Mr. Johnson apologized if any of the panel’s remarks might have offended any Committee members, but he reiterated his belief that the actions of the United States against the Hages, the Danns, and others was clearly illegal.

 

Ms. Hansen indicated she had been complimented when a wild horse advocate had called the Nevada Committee for Full Statehood “dangerous,” because then, she said, she knew they were being effective.

 

Chairman Collins warned those who were testifying to be polite.  He observed that during the 2001 Legislative Session, this Committee had voted for the bill for full statehood.  He emphasized that he supported many of the Full Statehood Committee’s activities and the cause they were supporting.  Chairman Collins noted that after the Black Rock Desert was made into a wilderness area, other land use alterations had to allow for more public comment and that an improved process was now in place. 

 

Ms. Hansen indicated appreciation that the Committee had enabled the panel to testify and stressed that the Nevada Committee for Full Statehood was focused on free speech activities that would help public awareness.  She complimented the Assembly for its openness and for the opportunity to make their presentation and added that free speech would expand the understanding of issues.

 

Chairman Collins thanked the panel representing the Nevada Committee for Full Statehood for making their presentation. 

 

Mr. Johnson noted that the Hages had done an excellent job of pursuing justice through the court system and added that his group was using the Nevada State Legislature to attain their ends.

 

Chairman Collins answered that the Legislature was working on that process.

 

Written testimony was provided to the Committee (Exhibit Q), (Exhibit R), (Exhibit S), and (Exhibit T) but not presented verbally during the meeting.

 

With no further business to come before the Committee, the meeting was adjourned at 3:24 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

                                                           

Erin Channell

Committee Secretary

 

 

                                                           

Terry Horgan

Transcribing Secretary

 

 

APPROVED BY:

 

 

                                                                                         

Assemblyman Tom Collins, Chairman

 

 

DATE: