MINUTES OF THE meeting
of the
ASSEMBLY Committee on Natural Resources,
Agriculture, and Mining
Seventy-Second Session
May 12, 2003
The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:36 p.m., on Monday, May 12, 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. Kelvin Atkinson
Mr. John C. Carpenter
Mr. Chad Christensen
Mr. Marcus Conklin
Mr. Jason Geddes
Mr. Pete Goicoechea
Mr. John Marvel
Mr. Bob McCleary
Mr. Harry Mortenson
Ms. Genie Ohrenschall
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Senator Dean A. Rhoads, Northern Nevada Senatorial District
STAFF MEMBERS PRESENT:
Linda Eissmann, Committee Policy Analyst
Erin Channell, Committee Secretary
OTHERS PRESENT:
Fred W. Welden, Chief Deputy Research Director, Legislative Counsel Bureau
R. Rene Yeckley, Principal Deputy Legislative Counsel, Legislative Counsel Bureau
Bob Abbey, Nevada State Director, Bureau of Land Management, Department of the Interior
Hugh Ricci, P.E., State Water Engineer, Nevada Department of Water Resources
Dennis Gebhardt, Hydrologist, Nevada-Sierra Planners
Joe Dahl, Rancher, Fallon, Nevada
Doug Busselman, Executive Vice President, Nevada Farm Bureau Federation, Nevada Farm Bureau Service Company
Joe Guild, Attorney, Lobbyist and former President, Nevada Cattlemen’s Association
Steve Boies, President, Nevada Cattlemen’s Association; Rancher, northeastern Nevada
Harry Swainston, Carson City Attorney
Joe B. Fallini Jr., Nye County Rancher, Twin Springs Ranch
O.Q. “Chris” Johnson, Chairman, Nevada Committee for Full Statehood
Joe Johnson, Government Affairs Consultant, Toiyabe Chapter of the Sierra Club
David Schumann, Nevada Committee for Full Statehood
Thomas Jefferson, Nevada Committee for Full Statehood
Jackie Holmgren, Legislative Chairman, Nevada Live Stock Association
David Holmgren, Vice Chairman, Nevada Live Stock Association
Janine Hansen, President, Nevada Eagle Forum
Wilfred Buffington, Mineral County Planning Commission
M. K. “Ike” Yochum, Independent American Party of Nevada
Doug Bierman, Humboldt River Basin Water Authority
Kaitlin Backlund, Nevada Conservation League
Demar Dahl, Candidate for U.S. Senator from Nevada, 1992, and President of the Nevada Cattlemen’s Association, 1994-1995
Helen Chenoweth-Hage, Nye County Rancher, former U.S. Representative, 1st District, Idaho
Wayne Hage, Nye County Rancher and Plaintiff, Hage v. United States
Ed Depaoli, Fernley Rancher, Chairman, Nevada State Grazing Board
Senate Bill 76 (1st Reprint): Revises provisions governing acquisition of water rights for purposes of watering livestock. (BDR 48-670)
Chairman Collins opened the hearing on S.B.76, and stated, for the record, that the room was full and over 20 persons had signed up to testify for and against the bill. He asked witnesses not to restate anything that had already been said and to keep in mind that it was within his authority to swear in witnesses and take testimony under oath if necessary.
Senator Dean A. Rhoads, Northern Nevada Senatorial District, representing Elko, Eureka, Humboldt, Lander, Lincoln, Pershing, and White Pine Counties, and portions of Nye County; a rancher, and Chairman of the Legislative Committee on Public Lands, stated that he was accompanied by Fred Welden, Research Division, Legislative Counsel Bureau (LCB), and Rene Yeckley, Legal Division, Legislative Counsel Bureau (LCB), and Wayne Howle from the Nevada Attorney General’s Office.
Senator Rhoads stated that, as everyone knew, Nevada was the driest state in the nation. He said he had been working on the stockwater problem for many years because, as a rancher, he had a special interest in the issue.
In 1979, when Ed Roland was the Director of the Bureau of Land Management (BLM), the BLM suddenly applied for between 6,000 and 9,000 water permits, including stockwater, recreation, and wildlife permits. Almost all the applications were protested against by ranchers and by the United States Department of Agriculture (USDA).
Senator Rhoads stated that, in 1983, the State Water Engineer indicated that he might approve those applications. He had thousands of applications in his office with more coming in each year. In 1983, the Attorney General’s Office was very critical of the State Water Engineer’s proposed action. Subsequently, the Attorney General’s Office, the State Water Engineer, and federal agencies had a series of meetings that resulted in an agreement which would allow the State Water Engineer to conduct some test cases and to hear testimony for and against such issuance. The State Water Engineer did so, and, in 1985 and 1986, he denied the water permit applications that had been filed by the federal agencies.
In 1985, Senator Rhoads said that the BLM appealed the denial of those water permit applications to the 4th District Court in Elko, Nevada. Judge Joe McDaniels agreed that the BLM and the United States Forest Service (USFS) could not hold stockwater permits. In 1988, the case went to the Nevada Supreme Court and the resulting decision overruled 4th District Court and stated that the State Water Engineer had to grant stockwater permits to federal agencies.
Between 1988 and 1995, Senator Rhoads said that there were three ways to hold water permits on Nevada public lands:
Senator Rhoads explained that in 1995 Bruce Babbitt, Secretary of the Interior, drafted a Rangeland Reform proposal that had been very destructive to the western United States. Senator Rhoads, Governor Miller, Joe Dini, and seven others met with Secretary Babbitt at the Reno Airport, under heavy security. According to Senator Rhoads, Bruce Babbitt agreed he would “back off” on some of the Rangeland Reform proposals, but he did not. This program, Rangeland Reform ’94, led to federal regulations that eliminated the three-way system of holding water permits and substituted the following policy:
Stockwater rights shall be acquired, perfected, maintained, and administered in the name of the United States.
Consequently, the new federal regulations that were issued to complement the new policy were completely contrary to Nevada’s state water laws.
In 1995, S.B. 96 of the 68th Legislative Session was passed by the Nevada State Legislature, which created a state law that said only owners of livestock could obtain stockwater permits. The BLM filed suit against the State Water Engineer for denying stockwater permit applications submitted by BLM, and the case took seven years to reach the Nevada Supreme Court.
In the meantime, Senator Rhoads noted that the Douglas County District Court had ruled that S.B. 96 of the 68th Legislative Session was constitutional, and that BLM should be able to acquire water rights. Since the BLM had water rights applications pending in Douglas County, the State Water Engineer felt he had to grant them and approved the applications. Then, in 2002, the Nevada Supreme Court overruled the Douglas County District Court. In 2003, the Senate adopted S.B. 76, the subject of this hearing.
Senator Rhoads then read from his prepared statement:
S.B. 76 revises the statutes governing stockwater rights in the state of Nevada. S.B. 76 sets up a two-pronged approach to obtaining water rights for watering livestock in Nevada. Initial procedure is established in statute, but if this approach is found to be unconstitutional, a secondary or backup procedure automatically takes its place.
As an initial approach, the measure provides that the State Water Engineer may issue a permit to water livestock only to the rancher who owns, leases, or manages the livestock. Thus, the owner of the land upon which the livestock is grazed or watered, if it is a public entity or a person other than the rancher who owns, leases, or manages livestock, cannot receive a permit solely in his own name, or jointly with the rancher.
Such water rights were also declared appurtenant to:
1. The land where the livestock is watered, if it is owned by the rancher, or
2. Land contiguous to the land where the livestock is watered, if this contiguous property is owned by the rancher.
If the initial approach is found to be unconstitutional, the bill sets up an automatic default to a system through which the State Water Engineer may issue a permit to water livestock solely to the rancher owning the livestock, or jointly to the rancher and the owner of the land where the livestock is grazed or watered.
Certain provisions of the bill are effective on passage and approval, while the effective dates for other provisions are staggered to foster implementation of the two-pronged approach.
Senator Rhoads then turned over the microphone to Fred Welden, LCB, to present an overview of S.B. 76, and to Rene Yeckley, LCB, to analyze the legal aspects.
Fred W. Welden, Chief Deputy Research Director, Research Division, Legislative Counsel Bureau (LCB), said he also staffed the Senate Natural Resources Committee where S.B. 76 was processed before coming before the Committee today. He stated that, as research staff, he was prohibited from advocating either for or against a bill, but he would describe the main provisions of the final bill that was approved by the Senate Committee on Natural Resources.
Mr. Welden said he had provided two documents to the Committee:
Mr. Welden said the measure was essentially a two-pronged approach to granting permits for watering livestock in the state of Nevada. If the initial approach proved to be unconstitutional, then the back-up, or default, approach would automatically become law.
Mr. Welden asked the Committee to turn to Exhibit D, Section 6, on the bottom of page 6, which described the initial approach. He selected the main point in highlighted language and read as follows:
Section 6, subsection 1(a)(1): The State Water Engineer shall not issue . . . a permit to appropriate water . . . unless . . . the applicant . . . owns, leases, or otherwise possesses a legal or proprietary interest in the livestock.
He said there were some other criteria as well, but the above sentence was the key point: the person had to own the livestock. For the certificate of a water right, once it was perfected, the same criteria would apply, as follows:
Section 6, subsection 2(a)(1): The State Water Engineer shall not issue a certificate of appropriation . . . unless . . . the holder of the permit . . . owns, leases, or otherwise possesses a legal or proprietary interest in the livestock.
Mr. Welden added that if the above procedure went to court and was found to be unconstitutional, then the default position, or secondary approach, was outlined in Section 1 of the bill, on page 1. Section 1 provided for the following secondary approach in highlighted language, which he read as follows:
Section 1, subsection 1(a)(1): The State Water Engineer shall not issue a permit to appropriate water . . . unless . . . the applicant for the permit, or if the application for the permit is made by two or more applicants at least one of the applicants for the permit . . . owns, leases, or otherwise possesses a legal or proprietary interest in the livestock . . .
He said that the default position would revert to the position in which a rancher could obtain a permit on his own, or a rancher and the landowner could get a joint permit. A landowner would not be able to obtain a permit alone.
Mr. Welden concluded that those were the two main sections of S.B. 76.
Mr. Welden said that Section 2, beginning on page 3, dealt with the pertinence of the new water right. On page 4, Section 2 continued with a declaration that the water right was “appurtenant to” (a) and (b), and he read as follows:
(a) The land on which the livestock is watered, if the land is owned by the person who possess a legal or proprietary interest in the livestock; or
(b) The land located contiguous to the land on which the livestock is watered, if that contiguous land is owned by the person who possesses the legal or proprietary interest in the livestock being watered.
Mr. Welden testified that Section 2 allowed the appurtenance of the water right to be moved to an adjacent piece of property also owned by the rancher. He said Rene Yeckley would address the proposed amendments, which were related to Section 2.
Mr. Welden stated that Section 9, page 8, was also significant because it listed the effective dates of the different provisions in the bill. Section 9 said that Section 6, the initial approach, would be the law in the state of Nevada, unless a court of competent jurisdiction in its final action declared it unconstitutional, in which case Section 1 would automatically become law.
Mr. Welden concluded that those were the basic tenants of S.B. 76.
R. Rene Yeckley, Principal Deputy Legislative Counsel, Legal Division, LCB, said she would explain two amendments (Exhibit E). Ms. Yeckley said that Senator Rhoads had requested that the Legal Division prepare those amendments based on issues that were raised by the Nevada Cattlemen’s Association (Exhibit F).
The first amendment (Exhibit E) would amend Section 2 of the bill, which was related to the appurtenance provision of new water rights that Mr. Welden had just discussed. The proposed amendment would delete all references to land contiguous to land on which the livestock was watered and would replace those references with a provision providing that the appurtenance could be applied to other land located in Nevada that also benefited by the watering of livestock, and which was capable of being used in conjunction with the landowner’s livestock operations.
The second amendment (Exhibit E) would amend Section 9 of the bill, which listed the effective dates of the bill’s provisions, and which Mr. Welden had discussed. Ms. Yeckley said this was a technical change to clarify that Section 1 of the bill would only become law if a court were to invalidate Section 6 in its entirety, or paragraph (a) of subsection 1, or paragraph (a) of subsection 2 in Section 6.
Senator Rhoads said that, according to all the legal advice, the bill had an excellent chance of holding up constitutionally. Both the Attorney General’s Office and the LCB Legal staff held that opinion, so he felt quite comfortable with it.
Chairman Collins noted that persons who were present represented a great deal of collective expertise on public land issues. Linda Eissmann had served as research staff for the Legislative Committee on Public Lands. Rene Yeckley and Fred Welden had also attended those meetings. Senator Rhoads, Assemblyman Goicoechea, Assemblyman Marvel, Assemblyman Carpenter, and Chairman Collins, had all been involved with the Legislative Committee on Public Lands. Senator Rhoads had been working on stockwater issues for over 20 years.
Assemblyman Geddes wanted to know if Senator Rhoads believed that the bill would stand up to the legal challenge, as written, or if it would be stronger once his amendments were incorporated.
Senator Rhoads said that he believed it would withstand legal challenges either way, but that the bill would be in a stronger position if his amendments were included.
Assemblyman Carpenter asked Senator Rhoads why a fallback position was required if he thought the bill would be judged constitutional.
Senator Rhoads deferred the question to Ms. Yeckley.
Ms. Yeckley said it was her belief that the initial position was nondiscriminatory and was likely to be upheld. However, they also felt that, if the proposed legislation were invalidated, it would be because it did not allow a person who did not own livestock to participate in a joint permit. That was the reason for the fallback position, which allowed joint permits.
Assemblyman Goicoechea asked Senator Rhoads why they were moving to a court of competent jurisdiction, rather than to a court of last resort.
Ms. Yeckley answered that the effective date provision began with a decision from a court of competent jurisdiction that had invalidated part of Section 6, and that the “triggers,” or effective dates, would not apply until the parties had exhausted their appeals or had taken the case as far as they wanted.
Chairman Collins stated that he would be asking the Committee to take action on S.B. 135 this afternoon when he returned from the Senate Government Affairs Committee, where he had to appear on behalf of three bills. Meanwhile, Vice Chairman Claborn would conduct the meeting.
Chairman Collins asked Bob Abbey to come to the witness table. He said he understood that Mr. Abbey had a prepared statement, but he hoped that Mr. Abbey would address rangeland reform and some of the changes that were taking place now in his testimony.
Bob Abbey, Nevada State Director, Bureau of Land Management (BLM), said he had a prepared statement but would not be reading from it today. He asked that the written statement be entered into the record (Exhibit G).
Mr. Abbey stated that during the Interim, the Legislative Committee on Public Lands worked on the issue of livestock water rights, so they could develop a bill that would address the ruling of the Nevada Supreme Court. He applauded their hard work. S.B. 76, as originally introduced, would allow for joint applications for the appropriations of water for the purpose of watering livestock and would provide the greatest flexibility for long-term management of public rangelands.
Although livestock gathered where there was water, Mr. Abbey said dispersing grazing animals more broadly across the range made for better use of available forage and relieved the pressure on streambeds, which helped riparian areas to function properly.
Mr. Abbey said he would like to bring the Committee up to date on what was going on within the BLM regarding its federal grazing regulations. He said that BLM held public meetings throughout the West and took statements from interested parties and stakeholders regarding current federal grazing regulations, in order to determine if they needed modification. He said that the information and the statements obtained during the public meetings were taken to heart by the folks in Washington, D.C., and by the BLM, as they looked at current regulations to determine if they should be modified.
One major change under consideration would reinstate an earlier provision that allowed the BLM and a grazing permitee to share title of certain range improvements, including water developments. As stated by Senator Rhoads, that option had been precluded by Rangeland Reform ’94, which was introduced by former Secretary of the Interior, Bruce Babbitt. A companion initiative to the rule change proposal was a policy initiative that aimed to improve management flexibility, so they could work with livestock operators and other interests to experiment with innovative approaches to rangelands management.
Mr. Abbey said that both of the proposed policy changes had the potential to greatly improve the way the BLM conducted business and to change the way they managed public lands in the West. The BLM was a public lands agency committed to managing the range for multiple uses. Grazing, when properly managed, was an important and legitimate use of public lands. In managing public lands, the BLM (Bureau of Land Management) was committed to working as partners with all users, including livestock producers. The BLM, in partnership with the livestock producers and with all stakeholders, could work together to develop the necessary water sources to benefit the public rangelands. There was a need for additional water on public rangelands, and they needed to develop water resources as quickly as possible, so that at least some of the grazing could be dispersed. Then ranchers and their livestock could take better advantage of the all the available forage on public rangelands.
Mr. Abbey commended Chairman Collins and Senator Rhoads for looking for a way to resolve the issue so water developments could get under way. It was not an easy task, and S.B. 76, as amended, could make it difficult for the BLM to do the job they were mandated to do under federal regulations. Mr. Abbey said, as he understood the amendment, the BLM would be prevented from holding water rights jointly with producers on public lands unless it owned livestock. That concept was currently inconsistent with the BLM regulations and policies regarding water development on public lands. When taxpayers’ money was expended on water development, the BLM had a fiduciary responsibility to the public to protect that investment.
The Department of the Interior’s position was to comply with state water law. They hoped that any law enacted in Nevada would be fair to all users, including the agencies that manage public lands, where the water development was being proposed. BLM National Director, Kathleen Clark, and Mr. Abbey, BLM State Director, were both committed to working with all stakeholders to manage the rangelands and water systems to benefit livestock, wildlife, and wild horses, and to protect habitat. Mr. Abbey said he appreciated the opportunity to share the BLM perspective on S.B. 76, as amended.
Assemblyman Carpenter said, “in the old days,” developing water resources was not a problem because most of the development was being done with private resources. Now, BLM wanted water rights, or at least half of them, and felt they had to exercise control. BLM also wanted ownership of all improvements, whether a private individual had developed them or not. Perhaps because he had lived in rural Nevada for many years, Mr. Carpenter said, it seemed to him that the problems were due mainly to BLM’s insistence on controlling all the water.
Assemblyman Carpenter said there was no reason not to go back to the way it used to be, where everyone had the choice to either develop water cooperatively or independently. At least you could get something done. For 20 or 30 years now, no water development had taken place. There had been a virtual stalemate for years. Mr. Carpenter said “in the old days,” they knew that the state owned the water, but it was understood that, if individuals could put the water to good use, they could appropriate it. Now, because the BLM (Bureau of Land Management) wanted to control everything, they were in a terrible situation.
Mr. Carpenter pointed out that, whether they controlled the water or not, BLM could still control the grazing.
Mr. Abbey said that Mr. Carpenter was correct. He said he thought that Senator Rhoads did an excellent job of providing some background as to how the former three-way system evolved into the current situation, where the BLM sought to hold water rights on public lands. The former Secretary of the Interior, when he implemented Rangeland Reform, changed BLM regulations to require that BLM had to hold stockwater rights for all new water developments on public lands. The BLM was currently considering whether they needed to modify those regulations to allow ownership of water rights by others. However, Mr. Abbey’s perspective was that the three-way system had worked quite well. If Mr. Carpenter was proposing a return to the way it used to be, he said the BLM could support that.
Assemblyman Carpenter said that they ought to be able to work out an agreement where whoever paid owned the water rights. He did not see why an individual should be required to partner with an unwanted entity, especially if the individual had developed the resource and paid the costs.
Mr. Abbey said that BLM’s review of S.B. 76, as originally proposed, would allow flexibility so that there could be filings by livestock operators as well as by the managing agency, or jointly. It would allow for joint filings, but not necessarily for independent filings by the BLM.
Assemblyman Marvel said that the former Secretary of the Interior was the one who had created the trouble. He asked if Mr. Abbey had offered any amendments during the Senate hearing.
Mr. Abbey said they testified on behalf of S.B. 76 as proposed. The amendments had not been formally submitted at that time, but he later submitted a letter, once they had reviewed the amendments.
Assemblyman Marvel asked how much BLM had spent on water development.
Mr. Abbey responded that he did not know but would research the information and share it with the Committee.
Assemblyman Marvel said it would be valuable to know that. His experience was that livestock operators were the major investor in water developments. He asked Mr. Abbey if he dealt with “Section 4s” anymore.
Mr. Abbey replied that they did not; however, if the Committee wanted to return to the old way of doing business relative to filing for water rights, BLM (Bureau of Land Management) could support that position.
Looking at the way S.B. 76 was amended, Assemblyman Goicoechea asked Mr. Abbey if he thought BLM would challenge it.
Mr. Abbey answered that he could not speak for the Secretary of the Interior or for the Department of Justice. His concern was that they needed water developments on public lands. He hoped that whatever resulted from this legislative session would be something BLM could live with, so they could get on with their business. He could not assure anyone that the Department of the Interior or the Department of Justice might not challenge the legislation that passed. He said he could, however, reassure the Committee that the BLM, a bureau within the Department of the Interior, was prepared to live with the legislation that was passed by the Legislature. That legislation would put the BLM in the position of reviewing each proposal, on a case-by-case basis, to evaluate its merits and the public benefits.
Chairman Collins asked what water could be developed today or tomorrow, based on current laws and regulations.
Mr. Abbey said the current regulations, which were under review, required BLM to hold all water rights for all developments on public lands. When he testified in support of S.B. 76 at the Senate hearing, he said he felt it was somewhat risky to say that BLM would be willing to file jointly because the regulations had not been changed, and, until they were changed, both S.B. 76 and the amended version of S.B. 76 were inconsistent with current BLM regulations.
Chairman Collins asked if it would be at least a year or more before proposed changes to BLM regulations would be finalized.
Mr. Abbey replied that modifying the current regulations would require preparation of an Environmental Impact Statement (EIS), which would take at least a year, and then it would be subject to protests, appeals, and litigation.
Assemblyman Carpenter asked how the Secretary of the Interior, Bruce Babbitt, with just a stroke of the pen, and some federal regulations, could overturn Nevada’s water law.
Mr. Abbey said that federal regulations clearly stated that BLM (Bureau of Land Management) would abide by state water law. However, the federal regulations also went further and stated that any water right, for the purpose of development on public lands, would be held by the federal government. He said that there were inconsistencies in the stated intent of those federal regulations: Stating right up front that BLM would abide by state water law, and then writing a requirement that the BLM must hold the water rights to all water developments on public lands were conflicting concepts.
A BLM survey, backed up by current research and analysis of other western states, showed that the state of Nevada was the only western state considering changing state law to preclude BLM from holding stockwater rights.
Mr. Abbey said that Rangeland Reform ’94 changed the grazing regulations under which BLM operated. One component of the federal regulations indicated that BLM would abide by existing state water rights law, and another component of those regulations asserted that the BLM had to hold water rights to all new water developments on public lands, which was one reason BLM challenged Nevada’s laws after passage of Senate Bill 96 of the 68th Legislative Session.
Assemblyman Goicoechea asked, if he submitted an application to the State Water Engineer and met the criteria of having proprietary interest in livestock that was pertinent to those properties, if the Bureau would then issue an equivalent to a “Section 4” that would allow him access to develop that water.
Mr. Abbey said they would look at his proposal to assess its merits and at the public benefits of such development. Certainly the BLM would look at the opportunity to work with a permitee to see what other benefits could be derived from developing water resources on that location. To the degree that they could justify filing for water for wildlife and wild horses, BLM would like to do that. That did not necessarily require BLM to file for livestock waters.
Assemblyman Goicoechea said that, if he applied for permission to develop water resources, obviously, it would be in an area of no water, which would distribute livestock and wildlife over a wider area. All those permits reserve a portion of the water for wildlife, so he asked if Mr. Abbey was saying that the only way BLM could refuse the application would be if the use was not beneficial to the public interest or to the range resources existing in that area. Mr. Abbey agreed that was true.
Assemblyman Marvel asked if the Division of Wildlife filed for water.
Mr. Abbey said they had filed for water rights. He clarified that BLM managed the habitat, and the Division of Wildlife managed the wildlife. For the purposes of enhancing or improving habitat to support wildlife, the BLM would file for the water rights. If the Division of Wildlife had justification and documentation supporting the need for waters to enhance wildlife species, then the Division of Wildlife would probably file for the water rights.
Assemblyman Marvel asked if BLM would protest. Mr. Abbey said they would review each proposal.
Assemblyman Marvel asked Mr. Ricci if the Division of Wildlife had many permits.
Hugh Ricci, P.E., State Water Engineer, Nevada Department of Water Resources, replied that the Division of Wildlife did not file many applications. He said several years ago the Legislature passed a statute that required that any new permit from a spring or a seep was required to leave water that was customarily used for wildlife. Wildlife did not develop many wells, so they had very few applications for that reason.
Assemblyman Marvel asked if that would also apply to springs.
Mr. Ricci said it would be the same principle because, if no one developed the water right, wildlife would go there and drink. If anyone asked for a permit on the spring, however, wildlife would still be entitled to drink water at that spring. It was a standard provision included in all stockwater permits.
Chairman Collins said he had two questions:
Mr. Abbey said, answering the second question, that BLM had developed water resources, but not necessarily in support of livestock.
Answering the first question, Mr. Abbey replied that it was news to him that the State Water Engineer had denied BLM protests over water rights. He would like to know what his rationale was for denying the protests, and to review the decision, before developing a course of action.
Chairman Collins asked both Mr. Abbey and Mr. Ricci how long they thought it would be before stockwater could be developed in Nevada without protest or conflict.
Mr. Abbey said he would defer to the State Water Engineer relative to the applications on file. He would give his answer after hearing Mr. Ricci’s answer.
Mr. Ricci said that the BLM had 103 applications on file on which no action had been taken, 20 joint applications between private owners and BLM on which no action had been taken, and 308 that were in line for review. He clarified that, even with the two applications he ruled on last week, those individuals still had to go to BLM, because the water permit did not give them the right to start developing water on public lands. It still had to be reviewed by BLM. He could not estimate how long it would take stockowners to deal with BLM.
Mr. Abbey said it was an excellent question, but he would need to defer the question to see what came from the Legislature this year, relative to changes in state law. At that point, they would review individual proposals to determine the public’s benefit before making a decision. He said the decision would not necessarily require the BLM to hold all waters, but it would make things easier in dealing with existing regulations if a possessory interest were held by the BLM. The possessory interest in water could be either through joint filings or through parallel filings; BLM could file for wild horse and wildlife needs, while stockowners could file for livestock.
Assemblyman Goicoechea said that the right of wildlife to obtain surface water was already addressed in statute, so he wondered why BLM would need to file for water for wildlife.
Mr. Abbey said they would want to protect the interest of the wildlife so they could continue to have access.
Assemblyman Goicoechea said that state law already guaranteed that right.
Assemblyman Carpenter asked, if the “Babbitt Regulations” were changed, such as by a state resolution requesting that they be changed, would Mr. Abbey have a problem with a livestock operator holding a permit. He did not understand what the basis was, or what was wrong with a livestock operator holding a permit, when there were existing provisions for wildlife water. What was the basic premise that made BLM, or Mr. Babbitt, think that they should control the water, too.
Mr. Abbey said he could not speak to former Secretary of the Interior Bruce Babbitt’s intent when he changed the grazing regulations. Mr. Abbey said he guessed that it was a matter of the public policy advocated at that time, and that Mr. Babbitt believed that any development on public lands should be undertaken with at least a possessory interest held by the United States government. Right or wrong, that was his position.
Mr. Abbey said that the BLM’s position today would be to decide based on an evaluation of the public benefits, and it would not require the BLM to hold all the water rights.
Dennis Gebhardt, Hydrologist, Nevada-Sierra Planners, Reno, stated that he had worked as a hydrologist for 30 years in various states, including Arizona, Alaska, Montana, California, and, for the last 12 years, Nevada. He said he was testifying as a private citizen because the issue was very significant to the state of Nevada. Mr. Gebhardt submitted written comments that were entitled, ”Perspective on Nevada’s Water 2003, Re: First Reprint S.B. 76” (Exhibit H).
Mr. Gebhardt said that Nevada had been called the driest state due to its low average annual precipitation of 9 inches per year. The use of and right to water in a dry climate was of great importance. Without the ability to invest in managing water resources, little of the existing development in Nevada would have taken place. As with other western states, a fair and stable water rights program with oversight by the state of Nevada, encouraged landowners to invest in improvements.
He said that, because of the homesteading and settlement pattern in Nevada, the majority of water rights were tied to early ranching and farming lands. Those rights were passed from generation to generation, or to new owners, and continued to be used to create a patchwork of fertile green valleys. Mr. Gebhardt said that the historic rights of private landowners should be encouraged, preserved, and upheld with thoughtful revisions to the water statutes by passing laws like S.B. 76.
Mr. Gebhardt said that the proposed amendments to S.B.76 had avoided listing arbitrary classes of users and beneficial uses, which would have opened the door to legal challenges by opponents of states’ rights. In a state with a large federal presence, like Nevada, safeguards were needed to conserve and protect water resources for the residents. The McCarran Amendment (43 USC 666) was a legislative example of balancing private rights with federal powers. It restricted the federal government from using its permitting authority to reallocate or obtain nonfederal water rights in certain instances.
Mr. Gebhardt said there was a court case in Nevada that concerned the primacy of the state, as opposed to the rights of the federal government, to public lands and water rights. Mr. Gebhardt stated, “The case has been between the State of Nevada Water Engineer and the United States of America through the Bureau of Land Management (Case No. 970-C-0119, Ninth Judicial District Court).” A Nevada District Court had ruled on the case in 1998, and it had been appealed to the Nevada Supreme Court. The case had potential to define how much power federal land management agencies could exert over the lives of individuals and over states’ rights. Unless the federal government lost its appetite for continuing beyond the Nevada Supreme Court, the case could end up being determined by the United States Supreme Court.
The current Nevada court case with the federal government came about because the BLM filed for stockwater rights to nine springs on federal lands. The state refused to appropriate stockwater rights to the BLM because the federal government did not own the grazing livestock but would lease those rights and their associated permits to livestock growers for using public lands.
Mr. Gebhardt said that when the federal government approved the creation of individual states out of the public domain, it enumerated the rights that could be exercised by the new state governments, which included water rights for the citizens of the state. It was clearly understood that each state government would be able to administer and regulate the use of water for its citizens.
In addition, the federal government declared that there were other rights reserved to the federal government that might become important in the future, but those rights were unspecified at the time.
Mr. Gebhardt said that the majority of the public, not understanding how water rights were administered in the western United States, would be amazed by how detailed the system for ownership and use of water had become. In Nevada, as in other western states, water rights were based on defining certain things: the point of diversion, the quantity taken, the place where the water would be used, and what beneficial use would be served. Those collective aspects, along with many others, were referred to as a person’s claim to water. A claim to water would not reach the highest quality of ownership until it was “perfected,” or until water usage had been established over a period of time.
A reasoned interpretation of Nevada’s water rights was that, in order to obtain a water right, a permitee must be the direct user of the water. That policy kept water available for the residents of the state instead of allowing them to be usurped by other entities that did not put the water to beneficial use or might even try to put it to other uses as they saw fit. The federal government could rely on its “reserved” rights for wildlife and Indian Reservations, so their case for claiming stockwater rights was not a good case.
Mr. Gebhardt warned that Nevadans should be wary of how far the federal government might go in its effort to appropriate water resources and the implications of such actions. There were people in the United States today, being ignorant of history and natural resources, who viewed raising livestock on the open range as undesirable and wanted to eliminate that traditional use.
Many citizens of Nevada had suspicions that there were individuals embedded in public land management agencies who possessed such an agenda. Mr. Gebhardt said that an aggressive federal government, seeking undeserved water rights, and other resource rights, had become the “proverbial 600-pound gorilla,” an all-powerful force over many aspects of life that were critical to individual survival in the western United States.
For example, he said,
Suppose that in the future, because of market forces, stock grazing almost dies for a decade, and the federal government succeeds in assigning the water to other uses. It would be impossible to reestablish livestock grazing without water rights.
Mr. Gebhardt concluded by saying that some states had already acceded to the federal government, which had awarded certain water rights instead of have reserving them for individual uses. Enacting S.B. 76, as amended, would be a big boost for states’ rights and could set an important precedent for reserving the use of important resources, such as water, for individual citizens of the state.
Joe Dahl, a rancher from Fallon, in the interest of time, deferred to other representatives of the livestock industry.
Doug Busselman, Executive Vice President, Nevada Farm Bureau Federation, stated that their policy on water development on federal lands was to encourage the expansion of private development and ownership of stockwater on federal land. In discussions leading to the introduction of S.B. 76, their Board of Directors had identified three additional policy requirements that would need to be met to secure Nevada Farm Bureau support for the legislation.
Mr. Busselman said S.B. 76, in its first reprint, matched the current Nevada Farm Bureau policy, including the three necessary conditions listed above. From that point of view, they supported S.B. 76, and continued to support it with the proposed amendments. He said there were ongoing debates and discussions as to whether or not the various approaches were feasible.
Mr. Busselman said that comments by Mr. Abbey and others today had led them to hope that they were close to a solution regarding the change in federal regulations dealing with the ownership and title of the water rights. Current rangeland reform regulations stated that a private person could not own an improvement on federal lands. That regulation was also being revisited in the process.
Mr. Busselman said he knew how difficult it was for a rancher to acquire a loan for investment on an improvement. The cost for exploration wells was running about $25 per foot or more. It was difficult for ranchers to acquire financial backing when they needed water, but did not, and could never, own the improvement for which they needed backing to develop. If the ownership and title regulations were changed, Mr. Busselman thought there would be progress towards getting the water out of the ground and flowing again. He believed that water needed to be developed in Nevada so that livestock had water to drink, and getting to that point was a critical step.
Assemblyman Carpenter said that it was his analysis over many years that Nevada now had more wildlife because of water sources that ranchers had developed for livestock in the past. He said they needed to develop water resources because water was not only beneficial to livestock and to ranchers, but it was also beneficial to the wildlife.
Mr. Busselman agreed. He said there was an enhanced capacity for greater distribution of wildlife because of greater distribution of the water on the land. Improved and enhanced rangeland conditions were also a result of that distribution. He said there were many benefits to water development, and he encouraged Nevadans to get back into the business of developing water resources.
Assemblyman Goicoechea asked if the State Water Engineer would describe what would happen if the Legislature did not adopt S.B. 76. He asked Mr. Ricci if he could explain to the Committee his interpretation of existing statute and the ability of federal agencies to acquire stockwater rights if no legislation was passed this session.
Mr. Ricci said that the current law, NRS (Nevada Revised Statutes) 533.503 as amended in 1995, was the part ruled on by the Nevada Supreme Court. The Supreme Court, in a unanimous decision, said that BLM could hold water rights individually. Thus, nine permit applications were granted in Douglas County. Currently, BLM and stockowners could obtain water permits. In addition, if everyone agreed, he could issue a joint application.
Assemblyman Goicoechea said that what he heard Mr. Ricci say was that he would grant water permits to federal agencies for stockwater, unless it was protested.
Assemblyman Goicoechea asked if Mr. Ricci’s interpretation of the District Court ruling and the Supreme Court ruling was that they almost required him to issue stockwater permits to the BLM; or, if not, what his interpretation was of those court rulings.
Mr. Ricci said that the way the decision came about was the reason that he issued the permits, because there were no protests for any other reason. He said there might be protests dealing with other issues on other applications in other areas, and he would have to judge those on an individual basis.
Assemblyman Goicoechea said Mr. Ricci had answered his question. There were people who thought the Legislature should not pass any more legislation. He wanted to make sure that Mr. Ricci’s position was that he would grant stockwater rights to the BLM.
Mr. Ricci said that was correct.
Joe Guild introduced himself as a lobbyist and former President of the Nevada Cattlemen’s Association (NCA). He said as an attorney representing the NCA at that time, he attended meetings held at the Reno Airport in 1994 and 1995 with Secretary Babbitt, and Senator Rhoads; Mr. Demar Dahl, President of the NCA at that time; the Governor; and Joe Dini, former speaker of the Assembly, were present when Secretary Babbitt said he would follow state law.
Mr. Guild said he wrote a letter, at Secretary Babbitt’s request, which set forth the status of state law regarding stockwater rights. When federal regulations were issued that did not respect state law, they set the course that had brought Nevada to this point. Mr. Guild said he had a 10-year history with those issues and was happy to say that he could support S.B. 76.
Assemblyman Carpenter asked what the status of state law was at that time.
Mr. Guild answered that state law at that time was the three-way system that Senator Rhoads had mentioned. He added that the letter he wrote to Secretary Babbitt was peer reviewed by Peter G. Morros, who was the State Water Engineer at that time, and who later became the Director of the Nevada Department of Conservation and Natural Resources. Mr. Guild said that the three-way system allowed:
Steve Boies, President, Nevada Cattlemen’s Association (NCA), and rancher from northeastern Nevada, said that the NCA Board of Directors addressed S.B. 76 at their February 2003 meeting in Fallon, Nevada. The meeting was well attended, attesting to the serious importance ranchers in the state attached to water issues, and, in this case, to joint stockwater filings with federal agencies. An overwhelming majority of the Board felt that federal land agencies should not hold stockwater rights, and that anyone holding a stockwater right should own livestock, thereby putting that right to immediate beneficial use.
Mr. Boies said that the NCA Board met again on May 7, 2003, in the Legislative Building. They unanimously supported S.B. 76 as amended by the Senate, and endorsed the proposed amendments presented by Harry Swainston (Exhibit I). The NCA Board took the position that no joint filings with federal agencies should be allowed to force the issue back into court for judicial review. The NCA realized they had caused the stalemate in stockwater development because they wanted to address the cause, not to appease the symptoms. Their goal was to reach a long-term solution, not to provide a short-term remedy. For those reasons, they felt that the legal approach would best assure the future of the livestock industry in Nevada.
Mr. Boies acknowledged that there were many unanswered questions and unknowns regarding joint filings. If joint filings passed into law, there was the potential that existing privately‑owned water rights on Bureau of Land Management and United States Forest Service lands could be held hostage. Owners of existing water rights could be required to forfeit 50 percent of their rights to the federal government to develop those water resources.
Mr. Boies said he would like to make a few personal comments. He said that his children were the sixth generation to grow up on their ranch, and he wanted to make sure that the seventh generation had an opportunity to make a living on the ranch. During the early years of settlement of the West, the federal government had filed for public water reserves (PWR) to protect certain waters for the benefit of settlers traveling through, thus ensuring an available water source. He said the PWRs still existed.
Today, regulations guaranteed that all concerns were identified and addressed in the water filing process. As ranchers, they developed water resources so that wildlife had access. They inserted bird and rodent ladders in troughs before any water development took place. Extensive cultural inventories were carried out by federal land agencies to ensure significant historical sites were preserved. Ranchers utilized floats in engineering stockwatering systems, in order to conserve water. Most of these efforts were carried out at the ranchers’ expense.
Nevada’s wildlife had full access to water developments across the state, and ranchers did not restrict that use. Concerns that agencies now stated as reasons for joint filings were addressed long ago by federal regulations and in cooperative agreements with water permitees, thus ensuring that all concerns would be addressed.
Mr. Boies said that raised two important questions:
· Why did federal agencies now need to own stockwater rights?
· What did Nevadans want Nevada, and especially rural Nevada, to look like in the near and distant future?
He said that if citizens wanted to preserve and sustain Nevada’s diverse rural landscape, culturally and environmentally, then ranching would have to take on a role of historical and contemporary relevance: in the legislative process, in the minds of citizenry, and in the state. If not, ranching in Nevada would disappear from the landscape and from rural communities.
Mr. Boies stated that, ultimately, the practice of agriculture preserved open green space. Federal regulations and laws that dehumanized and separated ranchers from the land, and from their rights to using that land, could not sustain family ranches. In Nevada, top-down regulations had aided the destabilization of rural communities and led to diminished cultural diversity.
Nevada was now faced with critical decisions that had far-reaching implications on the state’s resources. The people of Nevada needed to decide if the federal government should acquire more land and if water could be taken from its natural watershed. Those decisions would change the high desert landscape forever.
In eastern Nevada today, properties had been purchased for the sole purpose of speculating on the eventual sale of water rights to the highest bidder. Mr. Boies commented that water was not a commodity like pork bellies. There were ethical issues connected to water that concerned humans, animals, and the land itself. “Water is a basic right, like the air we breathe,” he said.
Do we want to abdicate our responsibilities as Nevadans to the federal government and assume they know what is best for Nevada concerning our water resources?
The federal government is hijacking Nevada’s water by declaring supremacy rights any time they face a challenge by the state. With 87 percent of Nevada’s land, they own enough. They do not need to own stockwater rights as well.
Mr. Boies said he and his family had worked hard to maintain a good working relationship with the governing land-use agencies. He did not have an “axe to grind,” but he did feel deeply that, as a state owned predominantly by the government, citizens had a responsibility to define the future of their communities and of the state, instead of allowing outside forces to define the future for them. He said he believed that Nevada should maintain control of their water resources and should continue to recognize historical vested rights and beneficial uses. If citizens could accomplish that, it would be a memorable legacy for future generations of Nevadans.
Mr. Boies urged the Committee to pass S.B. 76 as amended by the Senate and to consider adopting Mr. Swainston’s proposed amendment that would reinforce the bill’s constitutionality.
Harry Swainston, Attorney, Carson City, and former Deputy Attorney General, said that, like Senator Rhoads, he had a long history with this issue, dating back to the 1970s. Consequently, he had some firm beliefs. Mr. Swainston said that at the foundation of the legislation was one postulate: Nevada could only give away its water once. He said it was apparent from prior testimony that, as far as Mr. Abbey and the Bureau of Land Management were concerned, there was no need to give Nevada water to the federal government at this time. He said his sense of the testimony on S.B. 76 so far had confirmed that there was no appetite for that.
Mr. Swainston said he had prepared a document that proposed certain amendments (Exhibit I). Those amendments had been represented to the Committee in a slightly different format. He did not have a problem with the format or language used in Senator Rhoads’ proposed amendments, which were drafted by the Legislative Counsel Bureau staff. He said that those provisions had included purposes he also felt were important, which were the two principles of appurtenance and beneficial use. Mr. Swainston allowed that he was somewhat of a purist as far as state water law was concerned; hence, given his own resources, he would have chosen to “wade through the bill with an axe.” However, being realistic and experienced in the legislative process, he realized that he needed to have realistic expectations. He said that he supported what others had contributed to the bill and to the process.
Mr. Swainston said he would be brief but wanted to make one point regarding amending the legislation to withstand a constitutional challenge. He said there was no question that the state sovereignty and jurisdiction over nonnavigable waters on public lands was “very close to absolute.” He said that not only United States Supreme Court cases, but Acts of Congress, the Mining Acts of 1866 and 1870, the Desert Land Act of 1877, and many other acts, all confirmed the basic principle that water had been severed from public lands so that the state, in its wisdom, could make proper disposition of the waters to meet the needs of both public and private appropriators.
Mr. Swainston said that the United States was a person under Nevada water law, and it had the ability to acquire all the water rights necessary for pastures, administrative sites, wild horses, wildlife, or even for cattle, if they wanted them.
[Mr. Swainston continued.] He stated that the legislation was broadly nondiscriminatory, even-handed in principle and in purpose, and would withstand a constitutional challenge against any claim that it violated the supremacy clause because, under the “equal footing doctrine,” which was a grant from the United States Constitution the states had plenary authority over their water.
Consequently, according to Justice Rehnquist and Justice Sutherland, and as demonstrated in the Oregon Power Company v. the Beaver Portland Cement Company case, the only two provisions of the federal constitution that might conflict with the state’s plenary control of water in a supremacy clause challenge were:
For example, one Nevada case that fell under the Federal Reserved Water Rights Doctrine arose at Devil’s Hole, and involved 200 pupfish. A small historic site had been preserved that surrounded Devil’s Hole. The State Water Engineer granted several well permits to an adjacent rancher, and he started pumping the water. As a result, pupfish could not spawn because the pumping drew the water level down below the spawning ledge. The issue was resolved in litigation between the United States and the State of Nevada. The United States won because of the supremacy clause, which was related to the Federal Reserved Water Rights Doctrine. In other words, when the federal government reserved Devil’s Hole, it reserved sufficient water to protect the pupfish. Therefore, the Federal Reserved Water Rights Doctrine trumped the State Water Engineer’s subsequent granting of water rights.
The other relevant doctrine was the Doctrine of Navigational Servitude. Any time the State of Nevada built a dam, for example, it interfered with the navigability of a navigable stream, which was a supremacy clause problem.
Assemblyman Goicoechea asked Mr. Swainston if he felt the bill was defendable as amended by the Senate, so that the default language would not take effect.
Mr. Swainston said he did not believe that the default language was necessary, as long as the only question of constitutionality in Section 6 related to beneficial use. However, there were two other provisions, subparagraphs (b) and (c), that he had problems with because they referred to forage and grazing preferences. He warned that this was “mixing apples and oranges,” which could open the door to a discrimination claim by the federal government.
Assemblyman Goicoechea asked if he would be more comfortable if those references were amended out.
Mr. Swainston said he would. Nevertheless, he was comfortable with the overall language of the amendments proposed by Senator Rhoads and the Legislative Counsel Bureau staff.
Assemblyman Carpenter asked Mr. Swainston if he thought the amendments presented by Senator Rhoads were sufficient to prevent a legal challenge.
Mr. Swainston said he thought that the challenges, if they were even posed, would not be successful. He doubted that the Bureau of Land Management attorneys would even seek to challenge the legislation because what was being proposed in the amended version was simply an exercise by the Legislature to enact general rules of property law. Mr. Swainston said that courts of law were saturated with the view that the federal government could not complain under those circumstances. Hence, Mr. Swainston did not feel there would be litigation over S.B. 76 because the only basis for overturning the law would be its constitutional basis.
Assemblyman Carpenter asked about the way the amendments were written, and, if they were included, if the state would be returning to what Joe Guild and others had alluded to, where federal agencies could file for water rights, or a permittee could file for water rights, or they could file for joint water rights together.
Mr. Swainston said that the only way the default provision, which would allow joint filings, could be activated, would be if Section 6 were declared unconstitutional. He thought that was very unlikely.
Assemblyman Carpenter wanted to know what the options would be if the bill were declared unconstitutional and the state returned to the three-way system of granting water rights.
Mr. Guild said that the short answer was no. Section 1 of the bill, the default provision, was broadly written, except that it specifically stated that at least one of the applicants had to own the subject livestock. He said that the only situations that could occur, even under the default provisions of the bill, would be a joint permit application with a livestock operator and the BLM, or the livestock operator by himself. The default provision did not allow the BLM to own stockwater permits in its own name. So, the state could not return to the three-way system, but only to a modified two-way system.
Assemblyman Carpenter said the state would be a little better off if the legislation was found to be constitutional because BLM could not obtain stockwater permits.
Mr. Guild said he viewed it that way, too.
Assemblyman Goicoechea asked, if the default provision took effect, if wild horses would qualify as livestock in terms of BLM filing for water rights alone.
Mr. Guild said that, under state law, wild horses were not defined as livestock. He envisioned the situation where BLM applied for a water permit to water wild horses. He did not want to speculate what the State Water Engineer would do.
Assemblyman Goicoechea said they would check with him.
Assemblyman Marvel asked how the other federal agencies fit into the issue. He said they had heard the BLM’s perspective, but there were other federal agencies that would be affected.
Mr. Guild said that the bill was now written so broadly that all potential water permitees, including BLM, State Lands, private land owners, other federal agencies like the United State Forest Service (USFS), U.S. Fish and Wildlife Service, were under the purview of the bill. In other words, anybody had to follow the criteria set forth in Section 6 of S.B. 76 in order to qualify for the permit. He asked the Committee to look at language starting at the bottom of page 6, to the top of page 7, that said:
The State Water Engineer shall not issue a permit to appropriate water for the purpose of watering livestock unless the applicant for the permit was legally entitled to place the livestock on the lands for which the permit was sought.
Mr. Guild said that his interpretation of “lands” in this sense meant every bit of land in the state of Nevada.
Assemblyman Marvel said that, somewhere during the course of the legislative session, he heard that the USFS was going to challenge the bill.
Mr. Guild said that he had been to every hearing on the issue and had heard rumors to that effect.
Chairman Collins explained that the Committee had received a letter about three or four weeks ago from the USFS, but no one from the USFS was present to speak today. He said that some legislators had spoken to persons above Bob Abbey, Director of the BLM, and some had spoken to persons above Robert L. Vaught, Forest Supervisor, Humboldt-Toiyabe National Forest. Persons higher up than Mr. Abbey were saying that the BLM, or the Department of the Interior, might change some things. Everyone was waiting to see what would happen.
Assemblyman Marvel said if those agencies were opposed, he would like to have them speak on the record.
Chairman Collins said he agreed, but it was all right because there was no certainty to the letter.
Chairman Collins apologized for having to testify on bills in another committee. He then closed the hearing on S.B. 76, and said he would return and reopen the hearing to hear opposing testimony on S.B. 76.
Senate Bill 135 (1st Reprint): Revises provisions governing killing or possessing of certain animals and penalty for violating those provisions. (BDR 45‑711)
Chairman Collins said the Committee would consider two amendments to S.B. 135.
The amendment Chairman Collins presented at the last bill hearing would make a first poaching offense a gross misdemeanor, and would make the second offense a felony. Assemblyman Conklin had rewritten Chairman Collins’ amendment and added language that would improve the enforcement aspect of the proposed legislation (Exhibit J). Chairman Collins asked Assemblyman Conklin to present the revised amendment.
Assemblyman Conklin said he revised the amendment (Exhibit J) because several Committee members were struggling with enforceability of the bill. Everyone wanted to ensure that it did not penalize or punish hunters for accidental things that might happen. Assemblyman Conklin asked the Legal Counsel for the Judiciary Committee for his assistance because it was more of a criminal bill than a natural resources bill. They changed the language on page 3, subsection 2 (b), to clarify that, in order to be guilty of this crime, the animal that was killed had to be the intended target, not an accidental target, or the result of some other legal hunting effort.
Assemblyman Conklin told the Chairman he would prefer, if they were going to include his amendment, that no other amendments with respect to either felony or gross misdemeanor be incorporated into the bill. He said that if another amendment was accepted, either the “wobbler” or the first-time gross misdemeanor, then his amendment should be rejected because it would water down the bill and would not have the desired effect. He said he had presented the amendment as an option, not as a provision that could work with another amendment.
Chairman Collins said he had spoken with the chief sponsor of the bill, Senator Titus, and she was willing to accept both amendments. Chairman Collins said he understood that Assemblyman Conklin had tightened the bill considerably and that there were many sportsmen who were in opposition to the bill. Chairman Collins said he agreed with Senator Titus that they should process both amendments.
Regarding page 3, subsection 2(b), Assemblyman Geddes asked how a field biologist would be able to enforce that provision. He said he was supportive of the intent but was concerned about enforcement.
Chairman Collins said that, coming from the legal department, the “intentionally to kill” language, on page 2, was more concise than the “willfully in killing” language. The second part, proposed by Assemblyman Conklin, would have to be reviewed because, in a state with a population of 2 million, there were only six or seven convictions last year. So, the issue was “not high on the radar screen.” He noted that, on one hand, there were folks in support of stronger penalties and prosecutions in Nevada, and, on the other hand, there were folks concerned about sportsmen being over-policed, rather than folks working to define the middle ground of responsible hunting.
Assemblyman Claborn said he thought the amendments were fine. He liked the “intentional” language and said that the same scenario had actually happened to him. He killed a big buck and a doe in one shot and told the landowner he had killed a doe on the property.
Chairman Collins asked if he had to report it.
Assemblyman Claborn said he reported it to the property owner, but he did not know what the property owner did afterwards. Mr. Claborn said that the amendments were fine, and he thought that Assemblyman Conklin had done a great job.
Assemblyman Goicoechea said he appreciated the effort that Assemblyman Conklin had invested in the bill, but he had never supported the intent of the bill. He thought it clearly belonged in district court and that a judge should make the call as to whether a case should be prosecuted to the utmost or, as in a case of a perpetrator trying to feed his family, if a Category E felony should be dropped, or perhaps the charge reduced. Mr. Goicoechea said he would not support the bill even with Mr. Conklin’s amendment.
Chairman Collins said he wanted to vote on the amendments separately.
The first amendment, which was presented at the first bill hearing, would allow some leniency for a first poaching incident. For example, because of the way the bill was written, sportsmen had raised issues such as, if a hunter was standing on the wrong side of the creek in section 10A and should have been standing in section 10B, he could be convicted of poaching. To narrow the bill, Chairman Collins wanted to amend the bill to allow the judge some discretion in certain cases, such as:
· If it was a first poaching offense.
· If a hunter was from out of the area.
· If a hunter shot at one minute before the legal sunrise.
· If his watch was wrong.
Mr. Collins said there were many examples why a judge might not want to charge a hunter with a felony on the first offense, or in extenuating circumstances.
Assemblyman Conklin asked if the first offense, involving only one animal, would always be gross misdemeanor or if it would allow the judge to use his discretion on a first offense.
Chairman Collins explained that in existing law, it was a gross misdemeanor and that charge would remain if the poaching was aggravated, or involved more than one offense. However, if a person crossed a state line to sell the animal as a trophy, it would automatically become a felony.
Assemblyman Carpenter said that he thought that if the charge was a gross misdemeanor, a person would receive a jail sentence, but a person charged with a Category E felony could only be sentenced to probation.
Chairman Collins said a Category E felony involved mandatory probation and did not include sentencing to state prison, although that person could be sentenced to time in a county jail. He said the way it was explained to him, whether the charge would be a Category E felony or a gross misdemeanor, the jail time was equivalent.
Assemblyman Atkinson asked Assemblyman Conklin if the amendment referred to a first instance felony case, and, if so, what the difference would be.
Assemblyman Conklin said the original bill indicated that all of the charges would be felonies. He tightened the language so it would only apply to those who were intentionally poaching, not to traffic accidents, stray shots, or other extenuating circumstances. His personal feeling was that, if a person was in Nevada and set out to kill animals that were specifically protected, or if a person lacked a valid license to hunt legally, then that was poaching and should be a felony. However, there were exceptions. The debate was whether those exceptions should be classed as gross misdemeanors.
Assemblyman Atkinson said he had a problem with the whole notion of a felony. He said he agreed with Assemblyman Goicoechea that a judge should determine that rather than the Committee. He said there were many crimes committed on humans where the perpetrators rarely got felony convictions, and he did not think they should be writing law to increase felony violations. He stated he had a problem with that.
Assemblyman Conklin suggested to Assemblyman Atkinson that they eliminate both amendments and just put the “wobbler” term in, to let judges decide, based on each individual case, if it would be a felony or a gross misdemeanor.
Assemblyman Atkinson said that he would not have a problem with that.
Assemblyman Claborn said the difference between a poacher and a hunter was that, if a person was killing animals out of season, they were clearly poaching and should go to jail.
Chairman Collins said he was open to taking a vote on the first amendment, which would make the first offense, single event, meaning one animal, a gross misdemeanor, and would make a multiple offense, meaning more than one animal, or a second offense, a felony.
ASSEMBLYMAN CLABORN MOVED TO AMEND S.B. 135 TO MAKE THE FIRST POACHING OFFENSE, OR A SINGLE EVENT, A GROSS MISDEMEANOR OFFENSE, AND THE SECOND POACHING OFFENSE OR GREATER, OR A MULTIPLE EVENT, A FELONY OFFENSE.
ASSEMBLYMAN GEDDES SECONDED THE MOTION.
Chairman Collins summarized the amendment as follows: If there were 6 or 7 convictions last year out of about 29 alleged poaching cases, the amendment would make the first offense a misdemeanor, and a second, or multiple, offense would be a felony.
THE MOTION FAILED.
Chairman Collins said he would consider a motion on the Conklin amendment that would ensure a first poaching offense would remain a felony.
ASSEMBLYMAN CONKLIN MOVED TO AMEND S.B. 135 TO STRINGENTLY IDENTIFY ANY POACHING OFFENSE, INCLUDING THE FIRST OFFENSE, AS A FELONY.
NO ONE SECONDED THE MOTION.
Chairman Collins closed the hearing on S.B. 135 with no action taken and reopened S.B. 76.
Chairman Collins instructed the Committee, especially the three members who needed to testify on bills in other committees, to remain in their seats as long as possible to hear the following testimony in opposition to S.B. 76.
Joe B. Fallini Jr., Nye County rancher and part owner of Twin Springs Ranch, stated that there were two types of bases for BLM permits. One was a water-based permit, and one was a land-based permit. Mr. Fallini said the testimony he had heard so far did not address water-based permits. He said that Section 3 of the Taylor Grazing Act created water rights ownership as a private property right, which was the commencibility for ranchers to be on the land. He wanted to address that issue because, if a permit was water-based and the water right was revoked, there would be no base for having a ranch on the property. He said he did not understand why the federal government would address one part of a law and forget the other part. Under a water-based permit situation, ranchers had to own and control the water in order to continue ranching on the property.
Mr. Fallini listed the exhibits he had submitted for the record and commented on each:
Mr. Fallini commented that the federal government had removed a dam from a ranch where the property owner had a certified water right. They had destroyed the dam and fenced the area so he could not reconstruct. They put a diversion above the dam so he could not access or use the water. Mr. Fallini said the federal government must have wanted the water very badly because they had taken it at gunpoint.
We are continuing to file applications to incorporate waters for a variety of beneficial uses, [and on] much more than just livestock. For example, we are filing for water rights for wild horses, wildlife habitat, wetlands, and fisheries, and the list goes on and on.
Mr. Fallini warned the Committee “It’s not just stockwater rights that are being claimed here. It’s everything.”
Mr. Fallini commented that if the Committee looked at BLM’s reply to the legal protest, it showed that BLM also claimed one half of the NDOWR water rights. Mr. Fallini said that BLM would take the water, whether by gunpoint, by coercion, or by blackmail.
Chairman Collins reminded Mr. Fallini that the meeting was on overtime and the Committee wanted him to have his say. However, he would not be allowed to make accusations that were untrue or disparaging unless he had court case documents to show that an individual or agency, state, federal, international, or otherwise, had done something wrong. Chairman Collins also reminded Mr. Fallini that he should speak only to S.B. 76, or to the proposed amendments. He could propose his own amendment or speak in opposition to the bill.
Mr. Fallini said he did not want the bill to be passed because he operated under a water-based permit, and if it passed, his ranch would no longer exist. It was that simple. They had to own and control the water. If they did not own and control the water, there was no commencibility, and they no longer had a right to live on the property.
Mr. Fallini said he and his partner went through two estates, one worth $1.5 million, and one worth around $1 million. They paid the IRS, but when the IRS found they were running out of money, they received a letter saying that they would have to either lien their water rights and grazing allotment to the IRS, or post a bond. He said that was proof that those water rights were property rights.
Mr. Fallini said that the BLM said they would recognize all the Fallini family’s water rights. The BLM asked them to make a map of their water rights so that the BLM could make a determination that the water belonged to them. He said they spent about $60,000 making that map and presented it to the BLM around 1990. In 1993, they received notice from the State Water Engineer that the BLM had filed for 111 of the Fallini water rights. He said they took his map, and instead of recognizing and affirming his water rights, they used that information to file for 111 public water reserves (PWR) on water rights that he already owned at the time (Exhibit R).
Chairman Collins asked if the BLM had received any water from them.
Mr. Fallini said they had not yet held any hearings on the issue.
Chairman Collins was incredulous that the BLM had not held any hearings since the notice Mr. Fallini had received in1993.
Mr. Fallini said emphatically, “No.” The BLM had not held any hearings since the notice he received in 1993. Mr. Fallini had filed a protest against those actions by the BLM (Exhibit M) in January 1994.
Mr. Fallini said the estate was valued at over $2 million, and the BLM had filed on 73 percent of his father’s water rights and on 38 percent of his mother’s water rights. They also had to pay $707,187.61 for inheritance rights to 25,730 animal unit months (AUMs) of water developments on his BLM grazing allotments. He stated that this also demonstrated ownership and private property rights.
Mr. Fallini said that when BLM came to the point where they did not believe Mr. Fallini had enough money to pay for the water rights, the IRS, Department of the Treasury, sent him a letter (Exhibit N). Paragraph 2 of the letter stated:
We have discussed the issues that are peculiar to the ranching operation of the estate and the effect the lien would have on the continued operation of the estate. In light of these concerns, the Service (IRS) would agree to forego the requirement of the lien if the estate could pay approximately half of the estate tax owing at this time. This would require a payment of $43,000 by July 1, 1992.
Mr. Fallini said they had to appropriate money from their children’s college education fund to pay off the estate tax, at which point the BLM determined that they did not own anything. Mr. Fallini said the Committee had all the documentation in front of them, and he was not trying to hoodwink anyone.
Mr. Fallini said that his family had been in the ranching business since the 1870s. The BLM had written up a Range Line Agreement on the oldest section of his vested property, without his consent. Everyone signed it but the property owners. When the Fallinis found out about it, they tried to set it straight, but the BLM refused. Consequently, in trying to rectify the situation, Mr. Fallini said they filed for the water rights on that land, even though they already had vested rights to it. The Fallinis filed for certificates of water rights on top of their vested rights.
He said he never thought he would be filing suit against the State Water Engineer but that was what he had to do because the BLM manipulated that area and gave the water rights to someone else. In the meantime, Mr. Fallini got together all concerned parties, they rewrote a new Rangeland Agreement, and everyone signed off on it. When he presented it to the BLM, they did not accept it because of Ruling 5192, dated December 2002. He later sued the State Water Engineer over Ruling 5192.
Chairman Collins clarified that this all happened after federal legislation in 1994 referred to as Rangeland Reform ’94. Mr. Fallini said yes, that was correct. He added that BLM’s opposition to his ranching operation was unfounded because their stated intention was to disperse water across the range and that was exactly what they had been doing.
Mr. Fallini commented that he had filed many Section 4 applications for rangeland improvements to disperse the water across his land. He said that Section 4s were the only way they could obtain approvals for water developments because they were a water-based ranching operation, per Section 3 of the Taylor Grazing Act that referred to private property, but that now Section 4s were no longer an option. He said they had previously filed many water rights applications and, if it turned out that BLM could now file for those water rights, he would lose them all.
Chairman Collins said that S.B. 76 was not supposed to affect any currently existing water rights. He said that Mr. Fallini had water rights (Exhibit S) that had been challenged previously to this bill, and that a court ruling last year had changed everything. He said it sounded to him that some of his problems took place before Rangeland Reform ’94. Mr. Fallini said that was correct.
Chairman Collins noted that Mr. Fallini had not yet addressed S.B. 76. Then, he added that his impression was that Mr. Fallini had been mistreated.
Mr. Fallini said that he objected to any part of the bill that might even potentially allow anything to go to the federal government that would jeopardize his water-based private property rights because that would jeopardize his ranching operation as a whole. Without ownership of and control of his water, he did not have a ranch.
Chairman Collins replied that this was why, in 1995, S.B. 96 of the 68th Legislative Session was passed, even though it was later judged unconstitutional by the Nevada Supreme Court. That was also the reason that S.B. 76 was being addressed today: To reaffirm the authority of Nevada’s state water law.
Mr. Fallini said that he believed that the state of Nevada should own the water, especially since the federal government already owned 87 percent of Nevada, and now wanted half of the stockwater rights for grazing livestock. He did not feel that was right. He said that the “scary part of the bill” was Article 1, Section 8, subsection 17, of the United States Constitution.
Mr. Fallini addressed the Committee:
You people have so much power, you can’t believe it. Because if you give the federal government that authority for land, for property rights, or anything else, it automatically becomes constitutional, and we lost it. You have a tremendous amount of power, and I hope you don’t give it away.
Assemblyman Claborn asked if any of his water was on federal Wilderness Study Areas (WSAs). Mr. Fallini replied that about 100 or 150 were on WSAs.
Assemblyman Claborn asked if some were on “suitables” and some on “unsuitables.” Mr. Fallini replied, “Yes. You bet.” He said he showed legislators some of those developments on a recent tour. He said he spent over $1.5 million on water improvements and not one penny was contributed by the BLM.
We have tried to redistribute water like Mr. Abbey, State Director, BLM wants. He won’t let us do it, but he did tell us, “If you want it, you give us half your water.” Now that is blackmail. That is coercion, and that’s just the way it is.
Assemblyman Goicoechea reminded the Committee of earlier testimony by the State Water Engineer, who said that his interpretation of the law was that, if S.B. 76 did not pass, he would have to allow the federal government to file on water rights.
Assemblyman Goicoechea wanted to know if there was some way to amend the bill, perhaps by removing the default language, which would only allow the federal government to hold water rights jointly with individual stockowners.
Mr. Fallini said he would recommend taking out the default language. He urged the Committee to lobby BLM directly and to ask them to change their regulations so they were again consistent with state water law. He said if BLM regulations were consistent with state law, they would not have any problems in Nevada.
Mr. Fallini said that the Fallinis personally held over 270 water rights (Exhibit S). The BLM had taken his maps, his listing of water applications and water rights, and subsequently filed claims for those water rights as public water reserves (PWRs).
Mr. Fallini admitted he was bitter. He said he had spent over 35 years of his life paying off the estate that the BLM now said he did not own any part of. Then the IRS wanted a lien on the property or a bond. A bond would have cost him 10 percent per year, and they could not afford it, so they had to pay the price. He said it just about broke the ranch. Because of conflicting laws and purposes, Mr. Fallini said they ended up paying for the ranch twice. His estate consisted of mixed vested rights, private property rights, AUMs, and a grazing allotment. He said, “That was what we paid for. Twice.”
Mr. Fallini said he was against any bill that would take anything away from the water-base rights he owned as part of his ranching operations. Anything less would wipe them out. He asked how many people would be happy if the BLM suddenly claimed half of a car they owned. He said that was what was happening to water rights in Nevada.
O.Q. “Chris” Johnson, Chairman, Nevada Committee for Full Statehood, said that he wanted to make a few changes because he had learned a few things since entering the building this morning. In the middle of page 1 of his written testimony (Exhibit T), where it referred to the “Swainston amendment,” he said that should be changed to the “Nevada Live Stock Association (NLSA) amendment.” He said he preferred the NLSA amendment to S.B. 76.
Chris Johnson said he wanted to point out some objections to S.B. 76. On page 3, line 12, it referred to “evidence of a valid grazing permit, other than a temporary grazing permit” in order to show beneficial use when filing for the allocation of water. Mr. Johnson said he did not see how a federal grazing permit had anything to do with Nevada water. Anyone who had an adjudicated grazing allotment should be allowed to file for a permit because an adjudicated grazing allotment was property, and Nevada state law dealt with property. It did not deal with federal permits. A permit was a license issued by the federal government to graze livestock and had nothing to do with property or with Nevada law. He objected to that language and to any other references to water permits.
Chairman Collins asked Mr. Johnson to quote lines and page numbers from the mock-up version of the bill, which included all the proposed amendments. Mr. Johnson clarified that he was discussing Section 1, subsection 2, lines 11 through 13, in blue print in the mock-up.
Chairman Collins asked if there was anyone currently grazing on federal land who did not pay for a grazing permit. Mr. Johnson said yes and they were doing it legally.
According to findings of fact in the case of Hage v. United States, Mr. Johnson said that anyone who owned vested water rights also owned the forage and were therefore entitled to graze without a permit. It had been decided in the Federal Court of Appeals, in Washington, D.C.
Chairman Collins asked if that was from boundary to boundary, or down a narrow strip of a ditch. Mr. Johnson said it was boundary to boundary, as far as he was concerned.
Chairman Collins acknowledged that was his opinion.
Mr. Johnson said that another objection was that he did not see any reason for the federal government to hold water permits, whether jointly or separately, in the state of Nevada. He said they had no use for them and no respect for them. He asked the Committee to turn to the last page of Exhibit T, which showed that the federal government had little regard for horses or livestock.
Mr. Johnson said he would like the following wording in the bill:
No person, entity, or agency of the United States who could not show beneficial use of Nevada water should be allowed by the State Water Engineer to protest allocation of Nevada water. Such protestation shall be disregarded and would not delay the legitimate applicants’ requests for permits.
That way the State Water Engineer had clear instructions to ignore federal agencies and other illegitimate protestations.
Chris Johnson said the bottom line was that the Committee, as Mr. Fallini had pointed out, had the authority. The federal government only had as much authority in Nevada as the Committee and the Nevada Legislature were willing to allow. He said, “If you give it away, then they will take it,” because government had no conscience.
Chairman Collins objected that each member of the Committee had a conscience, because if they did not, they would not be here.
Chairman Collins reminded everyone that Nevada had more designated federal land than any other state. Nevada was also the only state that did not currently require joint filings with federal agencies, unless it was voluntarily. He said that Wyoming and Idaho ranchers did not seem to have any trouble, and he was not sure why. He said he knew because he had cattle in both states.
Joe Johnson, Government Affairs Consultant, Toiyabe Chapter of the Sierra Club, stated that he came to speak in opposition to S.B. 76 and in opposition to the amendments. He said that the Sierra Club viewed S.B. 76 as not really a water issue, but as an issue oriented towards establishing real property rights based on water rights. The Sierra Club thought that the Committee and the Legislature should ignore that issue.
David Schumann, Nevada Committee for Full Statehood, stated that they supported the Nevada Live Stock Association’s amendment (Exhibit U), which contained a critical clause that was not included in any of the other versions. Section 19(c) of the amendment stated:
Section 1. The State Water Engineer shall issue a permit to appropriate water for the purpose of watering livestock if:
c. The applicants for the permit own, possess an adjudicated grazing allotment, and;
1) Have lawfully established a vested, superior right or priority appropriation of entitlement in land or water or both in the allotment, which is recognized by both the federal and state governments by virtue of the adjudication; and
2) Have a superior right over subsequent entry men for stockwatering purposes on the said allotments and thereby are lawfully entitled to apply for a stockwater permit within the allotment boundaries to the exclusion of all others.
Mr. Schumann said that the critical provision was not included in any other proposed amendments. It referred to adjudicated allotments, which were actually not public lands, but were considered “fee lands” as determined by Judge Loren Smith of the U.S. Court of Claims. He said that, according to Judge Smith’s conclusions in the Hage v. United States case, which were issued in February 2003, a person did not need a permit if he had an adjudicated grazing allotment.
Regarding former Secretary of the Interior Bruce Babbitt, Mr. Schumann said, “He could make regulations, but those regulations were not the law of the land.” Mr. Schumann said that the law of the land was what the United States Congress passed, which was called the United States Code. He said that the Code of Federal Regulations was not binding on anyone because they were written to govern the behavior of employees of the federal government and often conflicted with the United States Code. He said that sometimes their interpretations did not match the intent of the legislation.
Mr. Schumann said that Mr. Abbey had referenced the U.S. Code because they govern his life, but they did not govern the lives of anyone living in the state of Nevada who was not employed by the federal government. For example, he said that Title 43 of the Code of Federal Regulations, which was supposed to carry out Title 43 of the U.S. Code, did not follow the legislative intent.
Mr. Schumann distributed copies of a U.S. Supreme Court case Pollard v. Hagan, 44 U.S. 212 (1845) (Exhibit V). He said this case was concerned with two things:
The United States Government claimed land that they obtained from the King of Spain in Mobile, Alabama. They went through that claim. We think a proper examination of this subject would illustrate that the United States never held any municipal sovereignty, jurisdiction, or right of soil in, and to, the territory of which Alabama, or any of the new states, were formed, except for temporary purposes.
The temporary purposes were to sell the land and use the money to pay off the debt of the Revolutionary War. That dealt with the retention, in this case, from the war with Mexico. In Article 9 of the Treaty of Guadalupe Hidalgo, it stated that this area should become a state.
Until then, the government had the perfect right to sell the land and use the funds, but once it became a state, the absolute sovereignty to the water in this state, and to the land . . . according to the U.S. Supreme Court.
The court went through a disclaimer clause that said: We forever forego a claim on the wastelands . . . The proposition there for the . . . cannot operate upon subject matter of its enactment without the express consent of the people because they had to have the people of the new state agree to it. “Without the express consent of the people” contains its own refutation and required no further examination.
Mr. Schumann said that neither the disclaimer clause nor the retention of the land provision . . . and they say that Alabama is therefore entitled to sovereign and jurisdiction within her limits.
Mr. Schumann said that he supported the proposed NLSA amendment.
The Constitution of the United States, Article 1, Section 8, clause 17, said that a person might discriminate against the federal government. He did not know where the Supreme Court came up with their interpretation. He said if they tried to do the same thing to him or to anyone else here . . .
“The territory purchased by the consent of the Legislature, the state in which the same shall be . . .”
If they want to buy land, they were supposed to come to the Legislature and ask your permission. Mr. Schumann stated, “Now you can’t do that to any citizen in America.” Any citizen of the United States could come to Nevada and buy land. They did not need to ask the Legislature’s permission, but the federal government did. It was in the Constitution of the United States, Article 1, Section 8, clause 17. He said “you” discriminated against the federal government, and there it was right in the Constitution. The idea that you could not discriminate against the Constitution needed to be taken to the United States Supreme Court and let them decide this. He thought that the Supreme Court would come down heavily on the Legislature’s side, as the Supreme Court did in 1845, and the precedents were found in the Pollard v. Hagan of 1845.
Chairman Collins said he had just received a legal opinion regarding the Hage v. United States case he wanted to share with the Committee. It referred to earlier testimony that said the decision was “boundary to boundary.” He read the following legal opinion:
In 2002, the Court issued an opinion identifying the scope of the plaintiff’s property, which includes certain water rights and ditch rights-of-way, with associated forage rights. Associated forage rights were included in the ditch. The Court rejected plaintiff’s claims regarding ownership of the grazing permit and the surface estate. This opinion rescinded the 1998 final opinion, except where expressly reaffirmed. That concluded the first phase of this litigation Hage v. United States, 51 Federal C 57-2002, Hage 4.
In addition, in 2002, the Court granted in part the United States motion to clarify the final 2002 final opinion. The owner made clear there was no pertinent right for livestock to forage around seeps and springs.
Chairman Collins said that this showed that the status of that ongoing case, Hage v. United States, and the state of the law were in flux right now.
Mr. Schumann said that they were not in flux because there was a written order from that same judge in February 2003. He would bring in copies of that order the following day. The 2002 ruling was superceded in 2003 by the final decision, which differed drastically from what Chairman Collins had just quoted.
Chairman Collins said he would let Helen Chenoweth-Hage and Wayne Hage come up and clarify that, since they were the plaintiffs in that case.
Mr. Schumann agreed that they were the experts.
Thomas Jefferson, private citizen and member of the Nevada Committee for Full Statehood, said that there had been much talk of litigation at this hearing. He looked at the possibility of litigation as an opportunity for Nevada. He said Nevada should use litigation to establish the state’s right to equal footing and constitutional intent on unsold lands. He hoped that the Committee would show courage and optimism in favoring the opportunity.
Mr. Jefferson also felt that the decision by the Nevada Supreme Court was not the final say in water matters. He said that the Supreme Court of the United States was the final judge of those matters. In cases involving the state of Nevada, or any state, and the United States Government, the court of original jurisdiction was the United States Supreme Court, not the Nevada Supreme Court.
Mr. Jefferson said that the U.S. Supreme Court had been friendly to state sovereignty on such matters, as in Alabama v. United States, or Pollard v. Hagen (Exhibit V), in which the court ruled that the federal government had no jurisdiction on unsold lands within the state.
Mr. Jefferson asked the Committee to please have courage. He added, “Please do not water down the best water laws in the West.” His view was that federal agencies would “devour us all, one bite at a time.” Litigation sounded like a terrifying course to him. He asked them to either vote S.B. 76 down, or to adopt the amendment proposed by the Nevada Live Stock Association. He warned that the state was the final bulwark between the federal government and the people of the state of Nevada.
Mr. Jefferson asked the Committee to please ask the Nevada Attorney General to plead with the United States Supreme Court to assert the original intention of the United States Constitution.
Chairman Collins said that on March 3, 2003, the court issued an order setting trial for the next phase of the litigation for spring 2004. That trial would determine whether a “taking or takings” of any of plaintiff’s property interests had occurred, and if so, what compensation would be owed by the federal government.
Jackie Holmgren, rancher and Director, Nevada Live Stock Association (NLSA), said that the NLSA amendment (Exhibit U) had not been examined as much as it deserved. She said that the Committee should go directly to the Nevada Supreme Court with the bill because they would win. The record of those who proposed the first reprint of the bill and the amendments to it had not been good. They had lost in the Nevada Supreme Court twice and had damaged Nevada water laws, not from lack of zealousness, but because they had taken the wrong ideas and tried to intertwine Nevada’s water law with federal grazing law.
Ms. Holmgren said that NLSA’s proposed amendment to S.B. 76 denoted two classes of applicants for stockwater permits, as enumerated in NRS 533.503, subsections (a) and (c). Subsection (b) was applicable to both classes of applicants. NRS 533.492 and NRS 533.495 had, both before and as amended, substantiated the appropriateness of those classes, which were already in existence, and which were slightly amended here. The amendments applied equally to all persons and were not discriminatory.
The supremacy clause of the Constitution of the United States was not triggered by the amendments because U.S. 43 CFR 4120.3-9 clearly stated that any right obtained for the purpose of watering livestock “shall be acquired, perfected, maintained, and administered under the substantive and procedural laws of the state within which such land is located, to the extent allowed by the law of the state.”
By specifically acknowledging the limits set by state law, the United States could not have intended to occupy the entire field of regulated conduct. Thus, states had not been preempted from asserting their rights in this instance, and “That is what we have to do.” Ms. Holmgren added that they had tried to assert the state’s rights in S.B. 96 of the 68th Legislative Session, in 1995, but they went about it in the wrong way. That was how they arrived where they were today.
The federal regulations established the limits of the federal objective to be congruent with the limits allowed by state law. By the few amendments below, based in historical state water law, the State Water Engineer could retain the authority to deny or grant stockwater applications to any person, based on the amended statutes presented.
Under “Facts Confirmed,” the Nevada Supreme Court Opinion issued on July 24, 2001, stated:
The applications state that the BLM (Bureau of Land Management) desires to appropriate the water for purposes for granting water rights to individuals seeking to obtain grazing permits from the BLM. If granted, the BLM, rather than the state of Nevada, would have the ultimate say in the distribution and use of stockwater rights among the competing interests of the livestock industry.
In other words, the Nevada State Water Engineer would be working for the federal government, and Nevada would be paying for it. However, Nevada’s water rights were not based on a grazing permit from the BLM, but on beneficial use. There were no property rights involved in grazing permits, and therefore, no value.
In the United States Court of Federal Claims, Hage v. United States, Nevada stockwater rights had great value and were tied to the beneficial use of the water, most of which occurred prior to the advent of the United States Forest Service or the BLM, by the hard work of natural persons.
Ms. Holmgren noted that one of those natural persons, Joe Fallini, had testified today. He told the Committee that he owned property. She asked how the BLM could claim to own half of his property when the federal government had taxed him for owning that property for years. The entire premise that the BLM could lawfully become the grantor of stockwater rights, once they were acquired from the State Water Engineer, was completely erroneous.
Ms. Holmgren said that the NLSA (Nevada Live Stock Association) represented members who were more than deeply concerned with the BLM (Bureau of Land Management) becoming the grantor of Nevada livestock water rights. The threat that stockmen would be compelled to become partners with the BLM, in order to perfect additional waters within their adjudicated allotments, was abhorrent to the sense of raw individualism that built the United States.
Chairman Collins asked Ms. Holmgren to please leave extra copies of her amendment on the table. Ms. Holmgren said she had and people had taken what was there.
Ms. Holmgren continued, saying that the NLSA had presented their amendment for serious consideration as an alternative to S.B. 76 First Reprint before a vote was taken, and now also as an alternative to the Swainston amendment to S.B. 76 First Reprint.
Ms. Holmgren stated that her amended bill was a very elegant bill. It was short, nondiscriminatory, and both she and Judge Gamble believed that the bill could withstand a U.S. Supreme Court challenge, if necessary. In addition, she said there were no fallback clauses.
Chairman Collins asked if she had a letter of endorsement from Judge Gamble. Ms. Holmgren said no, but she had given Chairman Collins a letter of endorsement from Judge Gamble when she first submitted the NLSA amendment.
Ms. Holmgren said she had attached a page showing all of the adjudicated grazing allotments in Nevada (Exhibit W). She said that the boundaries of her own allotment had been surveyed in detail by the BLM.
Ms. Holmgren then read the NLSA proposed amendment, on page 2 of Exhibit U. She made the following comments on the amendment.
Section 1.1(c) of the NLSA amendment stated:
The applicant(s) for the permit possess an adjudicated grazing allotment and;
1) Have lawfully established a vested, superior right or priority appropriation of entitlement in land or water or both in the allotment, which is recognized by both the federal and state governments by virtue of the adjudication; and
2) Have a superior right over subsequent entry men for stockwatering purposes on the said allotment(s) and thereby are lawfully entitled to apply for a stockwater permit within the allotment boundaries to the exclusion of all others.
Ms. Holmgren made two comments on the above section. Regarding 1), she said that a good example was Mr. Fallini, who had established an entitlement, which was recognized by both the federal and state governments by virtue of the adjudication. Regarding 2), she said that the “exclusion” did not just exclude the BLM. Ms. Holmgren said that she had a water-based allotment like Mr. Fallini. Within that boundary, she asked, “What if anyone could come in and drill a well and put livestock in the middle of our livestock?” Nevada had a law that addressed that situation, and it was clearly not lawful in Nevada.
Ms. Holmgren then addressed the NLSA proposed amendment to NRS 533.492, bottom of page 2 of Exhibit U. There were two changes: In Section 1(a) she would delete the word “whether,” and she would add a new Section 1(a)(4), which would read:
(4) A statement of vested, superior right or priority appropriation of entitlement in land or water or both, which is recognized by both the federal and state governments by virtue of an adjudicated grazing allotment.
Chairman Collins said that he understood that she was dealing with state’s rights. However, she had also said earlier that it was wrong to mention grazing permits, but now it seemed that it was alright to mention grazing allotments. He asked if she was recognizing the federal government or not.
Ms. Holmgren said it was important to remember who came first. The rancher was there first, and he had to prove he had been there for 5 years before the allotment boundaries had even begun to be drawn. At that point, there was no permit.
Ms. Holmgren said that the NLSA amendment would also delete the word “public” to NRS 533.495 in two places (Exhibit U), because in (a) and (b) above, it referred to range that was also private.
Ms. Holmgren said that NRS 533.495 illustrated the exclusionary principle that was already part of Nevada water law, so that one person could not impose on another person’s area to drill a well, or to develop a spring that might not have been developed yet, or to graze cattle in the middle of another person’s herd.
Ms. Holmgren said that the reason the amendment would not be discriminatory to either the BLM or the USFS, was that it applied to any person or entity that might intervene. Since BLM and USFS were persons under Nevada law, this would apply to them also, but it was not exclusionary.
Ms. Holmgren said that the footnotes she had compiled at the end of Exhibit U were important, and she urged the Committee to read them carefully.
Ms. Holmgren said she believed that her amendment would show the way out of a disaster, and that it was a very simple amendment. The amendment did not address preferences or permits. It simply stated what both Nevada and the federal government had recognized.
David Holmgren, Vice Chairman, Nevada Live Stock Association, said he appreciated the Committee for hearing his testimony. He said he was speaking today as an individual rancher, as well as on behalf of his family and on behalf of the Nevada Live Stock Association and for many other ranchers in Nevada.
Mr. Holmgren said that he and Ms. Holmgren had put an extensive amount of work in footnoting their proposed amendment (Exhibit U). He said if the Committee read the footnotes, they would learn more about Nevada law, and how it evolved. He said they read State Supreme Court cases from the 1860s forward, having to do with possession, water, and history. They read extensively on the first lawsuits that were fought over water, when the Taylor Grazing Act was passed, to try to gain an understanding of why they had taken a wrong turn.
Mr. Holmgren said that when Lewis and Clark navigated the Missouri River, they could not determine which river to follow upstream. When they came to the Marias River, there was a great dispute. If they had followed the wrong river, it would have spoiled the whole expedition.
He said that was what had been happening in the last 10 years in Nevada, regarding the water law and the Supreme Court cases. He warned the Committee that the Legislature might be going up the wrong river, like Lewis and Clark. Perhaps they should go back to the fork and explore another river. He said patching up a “wrong turn” in Nevada water law would not work because there was language in S.B. 76 that would get Nevada into trouble again.
Mr. Holmgren said they stopped by the State Water Engineer’s Office that morning to check on the Douglas County water filings, especially on the nine springs that the State Water Engineer had permitted to BLM (Bureau of Land Management). They found that filings by the BLM mentioned 2,000 sheep, wildlife, wild horses, songbirds, sage grouse, and recreation-seekers. The same range had been adjudicated long ago, and those BLM filings were for old water rights from the 1800s that had watered large stock operations with as many as 8,000 sheep and 2,000 cattle. Many BLM filings had specifically targeted old mining applications that were not completely perfected. Mr. Holmgren said that those actions raised serious issues.
Mr. Holmgren continued his comments on S.B. 76, recommending that the bill should address the concepts of what it meant to be “legally entitled,” and to “possesses a legal or proprietary interest in the livestock” because when BLM took cattle from the ranchers, they always used the phrase “legal possession.” Therefore, if the law, or this bill, gave federal agencies the right to “legal possession,” ranchers would lose their cattle because BLM would be able to take them all.
Mr. Holmgren said it was critical that those two clarifications be included in the bill, because the concepts of what it meant to be “legally entitled” and to take “legal possession” had not been fully defined.
Mr. Holmgren added that they had established that water rights pre-dated the permit system.
Next, the Holmgrens attempted to establish how a person attained ownership to land or to water. Historically, a person first took possession. The land was open, and people came and took possession through mining and ranching. Possession always came first. Through research, they discovered that there were actually two parts to ownership: “possession,” the guarantee of the fact, and “ownership,” which was the guarantee of the law.
The question was: How had the BLM, through the language “legally entitled to place” or “legal possession of livestock” become entitled to file for ownership?
Mr. Holmgren said they should not proceed with S.B. 76 until they had addressed those two issues.
Mr. Holmgren said, with all they had learned in working on their own case and from living on their water-base ranch for over 6 years, by adding that knowledge to what Joe Fallini had learned over 35 years, he felt they had some valuable expertise to offer. He hoped that the Legislature would consider their suggestions.
Mr. Holmgren said he had discovered this morning new information in the history section of a Montana library, regarding the issue of possession of livestock. He discovered that the military, or the federal government, had never had the right to own livestock because, although they used a brand to identify remount stock, they were not allowed to record it. The military had never been allowed to record the brand because they could not own livestock as natural persons could own livestock. He read one excerpt:
Except for small herds to fill beef contracts at Army posts, and a bunch of milk cows that saloon keeper Charlie Brown is said to have kept in the valley of the Tongue River, near Mile C, there were almost no cattle in the 500-mile stretch between Bismarck and Bozeman in 1880.
He said he was still researching that area of the law.
Chairman Collins said that was before the cattle drives and wondered what that had to do with S.B. 76.
Mr. Holmgren said it related to how the BLM (Bureau of Land Management) came to own water rights before they could prove title, which was required in order to file for ownership. He said they needed to understand what the concept of “livestock” meant.
Chairman Collins asked, as a former resident of Montana, why all water permits on federal lands in Montana now belonged to the federal government.
Mr. Holmgren explained that the grazing association district in which he ran cattle included BLM land, U.S. Fish and Wildlife Service land, state land, and deeded land. The ranchers in that area made an effort to always develop water on the deeded land. He said they protected themselves and let the BLM assert a position. The President of the Montana Stock Growers Association said that was the best strategy to take with an open allotment: graze cattle on land watered by water developments on deeded properties and let the cattle roam to the allotment boundaries. He said they also developed artesian wells on deeded land and made sure they piped the water out onto deeded areas.
Mr. Holmgren stated that they mingled their operations as little as possible with the federal government’s, and that practice had served the country very well.
Janine Hansen, State President, Nevada Eagle Forum, stated that they opposed S.B. 76 and supported the Nevada Live Stock Association amendment. She said most of her concerns had already been addressed in previous testimony. However, she wanted to direct the Committee’s attention to Article 4, Section 4, of the United States Constitution, which guaranteed to every state a republican form of government.
Ms. Hansen said her brother always said, “He has rights who dares to assert them.” She encouraged the Committee members, as Nevada Legislators, to assert their rights and to defend citizens’ rights, to water in the state of Nevada. She said in the Tenth Amendment, the federal government was limited as to what it could do. Yet, there was, every day, a natural encroachment of power. She said legislators were in a position to assert their authority to defend the rights of citizens of the state of Nevada. She said that Nevadans depended on them to defend those rights. If they did not, it would leave citizens with very little recourse.
Ms. Hansen said she wanted to express her appreciation to the Committee for removing the phrase “public lands” from S.B. 76. She said it showed that Committee members were genuinely trying to be responsive to concerns that were brought forward.
Ms. Hansen reminded the Legislators that the federal government was the agent of the states, not the reverse. As Legislators, they were not agents of the federal government. The states existed before the federal government, and it was an important concept to grasp regarding the formation of the Constitution of the United States as a compact because it gave state representatives the higher authority.
Wilfred Buffington, a rancher and Planning Commissioner for Mineral County, stated that he was opposed to federalizing the water in Nevada. He was scared that BLM would take more and more control of federal land in Nevada.
Mr. Buffington told the story of his grandfather, who came to Austin, Nevada, in 1887 and had a ranch near McCloskey, which was currently named Bowman Creek. He said his uncles and his grandfather ranched there for 90 years. His grandfather used to carry a shovel while riding his horse to dig out springs in the area. He said before they ran cattle there, they ran sheep. Early each spring, when the cheat grass grew to about 2 inches tall, they would graze it off with the sheep, and later did the same with cattle.
Mr. Buffington said that since they sold the ranch, the whole landscape had burned because federal agencies would not let them graze cattle in early spring, as they had traditionally done.
Chairman Collins asked which side of the highway he was on.
Mr. Buffington answered that it was up Grass Valley, out of Austin, Nevada.
Mr. Buffington said he thought the federal government was getting too strong. He said that his grandfather and uncles worked that ranch for 90 years, and there were no fires there. Since the 1990s, when George Pinola owned the ranch, there were ongoing problems with wildfires. He said they needed to have Nevada “running their own show” instead of the federal government.
M. K. “Ike” Yochum, Independent American Party of Nevada (IAP), stated that the IAP opposed the bill as written and recommended adoption of the Nevada Live Stock Association amendment. In the interest of time, he deferred his time to Wayne and Helen Hage because he wanted to hear what they had to say.
Doug Bierman, Humboldt River Basin Water Authority, submitted a copy of his prepared testimony (Exhibit X). He said the group opposed S.B. 76 as amended because they had supported S.B. 76 as introduced into the Senate. He said that their position required some explanation because the Humboldt River Basin Water Authority was responsible for bringing the issues in S.B. 76 to the attention of the Legislative Committee on Public Lands, following the adoption of Rangeland Reform ’94 by the Bureau of Land Management.
Mr. Bierman said that the Humboldt River Basin Water Authority was committed to expanding and protecting private ownership of all stockwater rights for watering livestock on public lands. Maintenance of at least a partial private interest in stockwater was critical to maintaining viable range for the livestock sector in Nevada.
The Humboldt River Basin Water Authority had worked extensively with the Legislative Committee on Public Lands to develop S.B. 76 as introduced into the Senate. As introduced, S.B. 76 heightened the likelihood for at least partial private ownership of stockwater because it required all parties involved with an application for stockwater rights on public lands to participate in developing the subject stockwater and to participate in putting the water to beneficial use.
Mr. Bierman said that S.B. 76, as amended by the Senate Committee on Natural Resources, now faced an uncertain legal future, which could result in unanticipated and undesirable delays in developing new stockwater resources on public lands.
Section 2, subsection 5(b) could prevent valid holders of grazing permits, who were operating within their adjudicated grazing allotments, from obtaining stockwater permits to water livestock on public lands because their base properties were not contiguous to the public lands on which the livestock were watered.
Mr. Bierman said that Section 9 required that if Section 6 was invalidated, both Section 6 and Section 2 would expire. When introduced into the Senate, S.B. 76 had included Section 6. Since Section 2 was the section that would be subject to legal challenge, he said that only Section 2 should be subject to expiration. Section 6 was very similar to Section 1, except it dealt with a permit rather than with an application. Section 6 should not expire if Section 2 was invalidated by a court.
The Humboldt River Basin Water Authority encouraged the Committee to amend S.B. 76 to remove all the amendments that were adopted by the Senate Natural Resources Committee and passed by the Senate.
Kaitlin Backlund, Nevada Conservation League (NCL), stated that they did not support the amended version of S.B. 76 because the original bill had been compromised before it came to the Committee. She stated that the NCL would support the original bill and hoped there might be a compromise position that could be negotiated. She said that their main concern was the broad application that resulted from removing the “public lands” portion of line 2, on page 7.
Chairman Collins asked Hugh Ricci, P.E., State Water Engineer, ranchers Demar Dahl and Joe Dahl to come to the witness table.
Demar Dahl, Candidate for U.S. Senator from Nevada, 1992, and President of the Nevada Cattlemen’s Association, 1994-1995, said that he had heard Bob Abbey, State Director of the BLM, say today that if the Legislature passed this bill, Nevada would be the only state that did not allow BLM to file for water. Mr. D. Dahl pointed out that Nevada was also the only state with 87 percent of its land in federal ownership. If Nevada now linked water to federal land ownership, federal agencies would have even more power. He thought that everyone in the state would be concerned about that and would want to limit federal government ownership and control of water.
Mr. Dahl said that S.B. 76, as introduced, was a good bill, and was even better as amended with the Swainston amendments. Mr. Dahl recognized that the Committee needed to make some decisions about what they were going to do and what they would pass. He said that S.B. 76, as amended by the Swainston amendments, would be the best choice, mainly because of what might be required to get the bill passed, he thought they might have to follow Senator Rhoads recommendations this afternoon.
Demar Dahl said what was important about the final bill was that it had to protect existing rights, to limit the ways the federal government could own water, and to be able to meet constitutional challenges.
Mr. Demar Dahl said that Harry Swainston had been involved in Nevada water issues since the late 1970s, when he had been the President of the Nevada Cattlemen’s Association. He thought that they had finally come to a point where it was time to put the issue to rest and that they were very close to finding the best way to do it: include the Swainston amendments and take out the fallback position.
He remembered that Assemblyman Carpenter had asked earlier, if the bill would pass constitutional muster, why they needed a fallback position. He said that was a good question. From everything he knew about the bill, he believed that it would pass a constitutional challenge. If not, the Legislature could rework it. Including a fallback position was not essential, and joint filings should be completely eliminated.
Mr. Demar Dahl said that Joe Fallini had also made a very important point. Harry Swainston had admitted in conversation with Mr. Demar Dahl earlier today that he had overlooked Mr. Fallini’s concern that the bill, as amended by Senator Rhoads, did not address the problem of water-base ranches. Mr. Demar Dahl said that language in Mr. Swainston’s proposed amendment addressed the water-base property issue, as follows:
Other land or interest in real property [water] which are benefited by the livestock being watered, if that land or such interests in real property are owned by the person who possesses a legal or proprietary interest in the livestock.
Mr. Demar Dahl concluded that, if Committee amended and passed S.B. 76 as amended, and with the Swainston amendments, the water issue would finally be put to rest. He did not think the bill would be challenged in court, or, if so, he had been advised by people he respected, and so believed, that they would prevail.
Mr. Demar Dahl said that, with a few “tweaks”, the Rhoads bill as presented and including the Rhoads amendments, was a workable bill because it would protect existing rights, it would prevent the BLM from filing on stockwater, and he believed it would pass constitutional challenges. He suggested that language should be added to protect water-base ranches, like Mr. Fallini’s, and that it would be a cleaner and better bill without the fallback position and the reference to joint filings, which he thought was unnecessary.
Assemblyman Carpenter said that it was his understanding that Mr. Swainston wanted to delete all language in S.B. 76 and replace it with his language. Mr. Carpenter wanted to know if they were discussing something different now.
Mr. Demar Dahl said that, if his understanding was correct, and he was not sure it was, Mr. Swainston’s amendment would address Section 6 and Section 2. If Section 6, the body of the bill, were found to be unconstitutional, the bill would revert to a fallback position that would allow joint filings.
Assemblyman Carpenter wanted to be sure he understood what was going on because he had a memorandum from Mr. Swainston that said, “S.B. 76 under my proposal would contain only the provisions that I provided. Everything else would be deleted.” Mr. Carpenter said they needed to clarify what they wanted because he understood Mr. Swainston to say in testimony that Senator Rhoads’ amendment would be fine, too.
Mr. Demar Dahl asked Chairman Collins if he could defer to Mr. Swainston to clear up the matter.
Chairman Collins asked Hugh Ricci, to define “vested rights,” “certificates of water,” and “water-base ranches,” and if he would address what happened to the Fallinis.
Hugh Ricci, P.E., State Water Engineer, Nevada Department of Water Resources, said that his impression all along was that S.B. 76 would only deal with applications that were filed after the enactment of the law, whether it was S.B. 96 of the 68th Legislative Session, in 1995, or current law. He said that, in a couple of different places in the first reprint of S.B. 76, it provided that nothing.
Chairman Collins clarified that S.B. 76 would only apply forward from the date it passed, if it passed.
Mr. Ricci agreed saying:
That’s right. Anybody that has a vested right. This bill doesn’t have anything to do with that. If someone has a vested right or claim to a vested right, that’s what they have. This bill would not affect anything on an application to appropriate water from this day forward.
Chairman Collins asked why Mr. Fallini and the State Water Engineer were involved in a lawsuit.
Mr. Ricci said he recalled that, in that particular instance, they wrote to BLM and asked them who was allowed out there on the land because they had Joe Fallini’s application before them. They said it wasn’t Fallini, and they denied it. Mr. Ricci added, “Just the same way that, two or three days ago, I turned around and granted a permit to the individual rancher on the basis that BLM indicated they could graze cattle there. So, for the very same reason I granted one, I denied one.”
Mr. Swainston said that Assemblyman Carpenter was basically correct in his interpretation of the memo he sent to him. Mr. Swainston said when he started advising different groups, originally the two principles of beneficial use and appurtenance were included in two sentences. He had been working with language lately that the bill drafters had proposed, largely out of deference to them.
He said that beneficial use and appurtenance, those two principles, were now Section 2 and Section 6. He said there was also language in the bill that was surplus. He referred to his previous testimony that stated he would “wade through it with an axe.” He said he would prefer to leave no more than what he had proposed in the amendments. However, out of deference to Senator Rhoads and the bill drafters, he would accede to using some of their language.
Assemblyman Carpenter asked if he thought that the language that was submitted by Senator Rhoads would accomplish the same purpose as his language would.
Mr. Swainston said yes, essentially it would, except that, as Demar Dahl had noted, Senator Rhoads’ amended bill lacked language that would address water-base-ranches. Mr. Swainston’s proposed amendments addressed that issue by using the phrase “other interest in real property,” which was water rights, which tied the bill to water-base-ranches. He said that was important. There was no reason to exclude those ranches from having the benefit of appurtenance.
Assemblyman Carpenter asked what about the fallback language.
Mr. Swainston said he did not like the fallback language because he thought it would wreak havoc to water law. He said he was a purist because Nevada water law had earned high marks nation-wide for its simplicity and its brevity. He said, “Now, we are just junking it up with stuff that has nothing to do with water law.”
Assemblyman Goicoechea asked Mr. Swainston to walk through the bill and tell him what he wanted to amend. He said he had Senator Rhoads draft, and wanted to know how Mr. Swainston would amend it to take care of the water-base allotment.
Looking at Senator Rhoads’ Proposed Amendment 1 to first reprint of S.B. 76 (Exhibit E), Mr. Swainston said he would amend Section 2 of the bill, page 4, by deleting lines 6 through 9 and inserting “other land and interest in real property.” In other words, Mr. Swainston would change the green text that began, “Other land located in this state. . .” by inserting after “other land” the phrase “or interest in real property.” [Section 2, subsection 5(b) of the first reprint of S.B. 76, page 4].
Mr. Swainston said that water rights were interest in real property. Furthermore, just the fact that he was testifying to that meant that it was now part of the legislative record, and the bill would have to be interpreted in that manner by the courts, or otherwise.
Helen Chenoweth-Hage, Nye County Rancher, and former U.S. Representative, First District, Idaho, stated that this had been a very interesting experience for her, especially since she had been up since 3:30 a.m. and traveled for 5 hours from their ranch in central Nevada to testify.
Ms. Chenoweth-Hage said there had been a great deal of misunderstanding over the Hage Decision, and, since it was mentioned, she wanted to respond.
Chairman Collins said he had three different letters in the file and all had different views of it.
Ms. Chenoweth-Hage said her husband was in the audience and would be glad to answer any questions. [Wayne Hage joined her at the witness table at the invitation of Chairman Collins.]
Ms. Chenoweth-Hage said that the opinion Chairman Collins had read was from the government. She said the federal government had held that opinion consistently and had returned to argue it in court on four different occasions. Furthermore, each time they argued that opinion, the court had denied their motions for summary judgment.
Ms. Chenoweth-Hage said she concurred with testimony by Demar Dahl and Jackie Holmgren. She said that the amendment by the Nevada Live Stock Association (NLSA) was the cleanest and least confusing. However, she very much appreciated the work that Demar Dahl, Joe Dahl, and their attorney had done.
Chairman Collins asked if Mr. Swainston and the people who drafted the NLSA amendment had read each other’s amendments.
Ms. Chenoweth-Hage said she did not know the answer, but she was opposed to any form of joint filings. Without regard to what was happening in her home state of Idaho, and without regard to what was happening in Montana, Nevada’s water law was the hallmark in western water law because it was so clear and so simple, and had worked so well.
Ms. Chenoweth-Hage said she wanted to speak about a related issue, on which she was well informed, and that issue was rangeland reform. She said she sat on the Committee on Natural Resources in the United States House of Representatives, and chaired one of the committees on that issue. She stated that there was nothing in Rangeland Reform ’94, as drafted by Bruce Babbitt, nor in the seminal law that upheld Rangeland Reform ’94, in which the U.S. Supreme Court’s unanimous decision on Peale c.v. Babbitt, issued on May 15, 2000, with Justice O’Connor and Justice Thomas writing a non-dissenting minority report, that mandated that the federal government had to own all the water rights. All her experience had validated that fact.
Ms. Chenoweth-Hage said that the federal government’s opinion was an overstatement. For that reason, and because federal officials were known to stretch the truth to the detriment of citizens, when anyone appeared before her committee she made them take the oath to tell the truth.
Ms. Chenoweth-Hage referred the Committee to a map of Nevada, as commissioned by the Idaho Legislature in 1996, that showed the entire state was covered with grazing allotments, and many of those allotments included vested water rights. The proposal by the Department of the Interior to help manage western water was presented in their 2025 Water Reform Program, in which they suggested that through collaboration and through market evidence, they would work in coordination with Nevada law to manage water in not only Nevada, but in all the western states.
Ms. Chenoweth-Hage said that the concept of joint filings were tough to accept for those who had vested water rights. What Mr. Ricci said was true: Those who had vested water rights did not have anything to worry about, unless they ran cattle on allotments on which had a permit; through the permit, they could be forced to agree to turn over half of their water rights. She said that was the reality.
It was kind of like having a joint bank account. When you had a joint bank account you had the ability to have control over 100 percent of the bank account, you could write checks and spend whatever you wanted. That could also happen with joint filings.
Ms. Chenoweth-Hage concluded that U.S. Congress never intended that the BLM should enter into the business of managing and raising livestock, and become ranchers, in competition with those whom they had control over through rules and regulations.
Ms. Chenoweth-Hage yielded the rest of her time to her husband, Wayne Hage.
Wayne Hage, Nye County rancher and Plaintiff, Hage v. United States, apologized to the Chairman and to the Committee for appearing in his work clothes, but he had not planned to testify today.
Mr. Hage said he wanted to address the issues that came up in testimony relative to Hage v. United States. He said that the U.S. Department of the Interior bulletin that Chairman Collins read from, which was supposed to be an analysis of Hage v. United States, was the same bulletin that they planned to lay before the court to show them that the BLM (Bureau of Land Management) continued to try to confuse the decision on Hage v. United States. Mr. Hage said, ”They know they’ve lost to us, but they don’t want other people to figure out what that decision means.”
Chairman Collins said he had a letter from a Cheyenne, Wyoming, law firm, that described the decision as relating to a 55-foot-wide ditch.
Mr. Hage said that the word he had conveyed back to those folks, and to another prominent attorney in the West, was that they should have been arguing on the side of the BLM, and listened to the court explain the decision, because that argument fell right in line with BLM’s argument in opposition to the Hage case. Mr. Hage said that the court had rejected BLM’s argument four times, and he wanted to explain that further.
Mr. Hage said when they first filed the case, the issue was that the USFS (United State Forest Service) and the BLM (Bureau of Land Management) had said, “Either you obey our rules and regulations, or . . .” The BLM rules and regulations were such that they prevented the Hages from using a good share of their range and would have made their ranching operation economically nonviable. “Because of that, we said no. We will take our case to the United States Court of Claims on the property issue.” In other words, we would ask the court, “Do we own it or not?”
The BLM and USFS said at the time, “We own everything. We own the land and we own the water. All you have out there is a conditional privilege to graze granted by us.”
Mr. Hage said, “I don’t think so. If I were to die tomorrow, the IRS would assess this estate, and probably 70 to 80 percent of that assessment would be based on what I own on what you call public lands.” So, they went to court.
Mr. Hage said that the government immediately made a motion for summary judgment, saying, “We own the land; therefore, we own the water. Mr. Hage doesn’t have anything but a permit and our permission.” The court rejected that argument, saying, ”No. Mr. Hage has an opportunity to show what he owns out there.”
They had a hearing on that issue in Washington, D.C., and the Hages presented what they owned under Nevada state law. The United States responded saying, “We have to admit that Mr. Hage owns water rights and range rights out there, but everything he owns out there was owned under Nevada state law, not federal law. Therefore, we do not recognize it.” The judge said, “Wait a minute. Let’s go back to basic property law. The United States cannot create property in the first instance. Only the states can create property.” The government had just put on record that the Hages owned range rights and owned the water, under the appropriate law, which was Nevada state law.
Chairman Collins asked Mr. Hage if he owned property “fence to fence” now, or did he only have a 50-foot strip.
Mr. Hage said that after rejecting the government’s argument four times, the fourth time they said, in the February 5, 2003, order, that his range rights and water rights pre-dated the BLM and USFS rights. Therefore, he did not require a grazing permit.
Chairman Collins asked when he could have a copy of the February 5, 2003 order, or if it was out and available, but he had not yet received one.
Mr. Hage said it was.
Mr. Hage said that the ditch issue loomed large because the government prosecuted him criminally for cleaning pinion, juniper, and sagebrush out of the ditch. The ditch issue was treated separately from the rest of the rangeland case and the water issue. They were separate issues, but the argument that the government made was that they owned all the vegetation on the ditch banks, not Mr. Hage. Therefore, if he removed them to clean the ditch, he had to be in violation.
The court decision on the ditch issue was also a separate decision. They decided that, “Under the rules of common law, if you have a right-of-way, you own what grows on it.” Therefore, he owned the forage on the ditch right-of-way.
In the other case, he said that they had vested water rights, and if the water rights were vested, which meant that they were permanent, not temporary or just a water permit, and not subject to any conditions, then, the beneficial use that went with the permit also became permanent and inheritable, which was the definition of the fee. So the court determined that he had title to the fee lands upon which those waters arose, the boundaries of which, the court specifically pointed out, were the boundaries of his grazing allotments.
Mr. Joe Dahl, rancher, from Fallon, Nevada, said that the Committee would have to either do something or do nothing on the bill and that the easiest thing to do would be to pass S.B. 76 as amended by the Senate. If they did that, however, it would leave water-base allotments, like Joe Fallini’s, in some kind of jeopardy. It would also allow for the fallback provision, which made an embarrassing kind of legislation, as if the drafters were not very confident. As Harry Swainston said, the state could only give away its water one time.
Mr. Joe Dahl pointed out that court attorneys always said they never knew what might happen in court. If the bill went to court, the main risk was having it overturned, which would mean, per the fallback provision, that there would be joint filings forever. He said that neither the industry nor most of the state of Nevada wanted joint filings.
Mr. Joe Dahl said that Harry Swainston had essentially presented a simplified version of what Senator Rhoads produced. He said it may be doing Senator Rhoads a favor to clean it up and eliminate the unnecessary portions. Mr. Swainston’s version would protect the water-base allotments and would make for good, clean, concise, and understandable legislation. He encouraged the Committee to do that.
Chairman Collins said he thought that Mr. Swainston felt that “interest in real property” might be too broad, and that it needed better language. He asked Mr. Swainston if he had heard correctly.
Mr. Swainston said that the language was not too broad, particularly in context of his testimony here today. It was intended to solve the water-base property problem. He said it would be conceivable that the language could apply to an easement, but as long as it was property owned by a livestock operator . . .
Chairman Collins asked that if it was located in a stockwater statute would that be enough to make it reasonably restrictive.
Mr. Swainston said he thought so.
Ed Depaoli, Fernley rancher, permittee, and Chairman, Nevada State Grazing Board, said he would be brief. He said he appreciated that the issue might still be in gridlock after the session was over. Should that happen, his overriding concern was that there would be a possibility of looking back at how things worked for the 7 years prior to Rangeland Reform ’94. He suggested that they return to that procedure for 2 years, which would be a cooling off period, and then address the issue again next session.
Mr. Depaoli said he knew the BLM (Bureau of Land Management) had problems to address. He pointed out that, if a private individual held a water right, the State Water Engineer was a “stickler” for details, and that should hold true for the BLM, as well. To merely hold a water right based on some vague future use and for an undefined amount, should not be allowed to happen. Those regulations needed to change, and if they could not change fast enough, the 2‑year moratorium might give things a chance to work out. There were people out there who really needed to develop water. Their livelihoods depended on it.
Assemblyman Goicoechea asked Mr. Depaoli, if they went back to the three‑way system prior to Rangeland Reform ’94, if he thought they would truly have water development. He said his greatest fear was that the federal agencies would then require joint filings or filings in their name.
Mr. Depaoli said it would be a decision between the State Water Engineer, the parties, and the agencies. If you could not reach an agreement, nothing would happen. He said the main point was if someone paid 100 percent of the development costs, that person, or agency, should have 100 percent of the water right. The percentage of ownership should be shared proportionately, but the State Water Engineer would determine beneficial use. If livestock use by the Bureau was not beneficial use, they could not hold water rights. He still thought that returning for two years to the prior system would work.
Chairman Collins said that prior to litigation, the court case, and the 1995 legislation that resulted from S.B. 96 of the 68th Legislative Session, in the years when there was a three-way system and prior to that, the USFS owned water rights independently and the BLM owned water rights independently, and there were joint water rights that existed and which people still benefited from. Yet, since the current legal dispute, they had not been able to develop water in Nevada communities and had not been able to develop Nevada.
Chairman Collins said there were also folks who would like to see an end to the litigation and a beginning to developing water by whoever could finance the costs, or by only ranchers, or by people willing to partner as necessary. Some folks did not even want to discuss doing anything with the federal agencies. There have been other issues raised by other litigation, by people who were paying grazing fees, and by folks who were not paying grazing fees.
Chairman Collins said that the Legislature, within a 120-day legislative session, was supposed to solve all those issues so that everyone could move forward with water development in the state. At the same time, Rangeland Reform ’94 declared that all developments on BLM must belong to the BLM, which contradicted Nevada state law. Chairman Collins said that the federal agencies were bound by federal law, and residents of Nevada were bound by state law, and both were bound to address court cases and case law. Everything was in flux. He concluded that whatever was passed out of this Committee might be, if not to avoid litigation, to limit litigation, knowing that everyone would probably return in another two years to the Legislature because of changes that would take place between now and then.
[Written testimony on S.B. 76 was provided to the Committee by Elsie Dupree (Exhibit Y), Mark Peplowski (Exhibit Z), and Juanita Cox (Exhibit AA) that was not verbally presented or discussed in the meeting.]
Chairman Collins closed the hearing on S.B. 76, and said he appreciated everyone staying so late to testify and to listen.
Chairman Collins noted there would not be a Committee meeting on Wednesday because of funeral services for the Director of the United States Department of Agriculture, who passed away. The next Committee meeting would be Friday, on adjournment of the Floor Session, if there was one. The alternative would be to meet at 1:00 p.m. on Friday. A Floor Session had been scheduled for Saturday. Chairman Collins adjourned the meeting at 5:17 p.m.
RESPECTFULLY SUBMITTED:
Erin Channell
Committee Secretary
APPROVED BY:
Assemblyman Tom Collins, Chairman
DATE: