MINUTES OF THE
SENATE Committee on Natural Resources
Seventy-second Session
February 10, 2003
The Senate Committee on Natural Resourceswas called to order by Chairman Dean A. Rhoads, at 1:46 p.m., on Monday, February 10, 2003, in Room 2144 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Dean A. Rhoads, Chairman
Senator Mike McGinness, Vice Chairman
Senator Mark E. Amodei
Senator Maggie Carlton
Senator Bob Coffin
Senator Michael Schneider
Senator Raymond C. Shaffer
STAFF MEMBERS PRESENT:
Fred Welden, Committee Policy Analyst
Johnnie Lorraine Willis, Committee Secretary
OTHERS PRESENT:
Paul J. Iverson, Director, State Department of Agriculture
Don Henderson, Assistant Director, State Department of Agriculture
Alan R. Coyner, Administrator, Division of Minerals, Commission on Mineral Resources
Chairman Rhoads opened the meeting and informed the committee there were several bill draft requests (BDRs) for introduction. He said the first one was BDR 48‑670, and was designed to clarify the Legislative intent in regard to livestock watering rights.
BILL DRAFT REQUEST 48-670: Revises provisions governing acquisition of water rights on public grazing lands for the purpose of watering livestock. (Later introduced as Senate Bill 76.)
Chairman Rhoads said this bill was passed several years ago, however, it went to the Nevada Supreme Court and had some constitutional problems. He explained this new bill should correct the problems.
SENATOR MCGINNESS MOVED TO INTRODUCE BDR 48-670.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
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Chairman Rhoads introduced Bill Draft Request R-671.
BILL DRAFT REQUEST R-671: Urges Secretary of the Interior to amend certain regulations concerning allocation of water rights for watering livestock on public lands. (Later introduced as Senate Joint Resolution 1.)
Chairman Rhoads said the Secretary of the Interior was in the process of revising the regulations and should have them published by next month.
SENATOR MCGINNESS MOVED TO INTRODUCE BDR R-671.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
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Chairman Rhoads introduced Bill Draft Request S-672.
BILL DRAFT REQUEST S-672: Provides for administration of program to provide grants for local treatment and control of invasive weeds and noxious weeds. (Later introduced as Senate Bill 75.)
Chairman Rhoads said this bill would appropriate a total of $2 million each year of the next biennium.
SENATOR MCGINNESS MOVED TO INTRODUCE BDR S-672.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
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Chairman Rhoads introduced Bill Draft Request R-675.
BILL DRAFT REQUEST R-675: Urges Secretary of Interior, Secretary of Agriculture and Congress to take certain actions concerning expenditures of money for restoration of and water developments on public lands in Nevada. (Later introduced as Senate Joint Resolution 2.)
SENATOR MCGINNESS MOVED TO INTRODUCE BDR R-675.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
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Chairman Rhoads introduced Bill Draft Request R-715.
BILL DRAFT REQUEST R-715: Urges Nevada Congressional Delegation and Congress to take certain actions concerning wilderness areas and wilderness study areas. (Later introduced as Senate Joint Resolution 4.)
SENATOR MCGINNESS MOVED TO INTRODUCE BDR R-715.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
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Chairman Rhoads introduced Bill Draft Request R-716.
BILL DRAFT REQUEST R-716: Urges Congress to take certain actions concerning wilderness areas and wilderness study areas. (Later introduced as Senate Joint Resolution 3.)
SENATOR MCGINNESS MOVED TO INTRODUCE BDR R-716.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
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Chairman Rhoads introduced Bill Draft Request R-717.
BILL DRAFT REQUEST R-717: Directs Legislative Commission to appoint subcommittee to continue study of wilderness areas and wilderness study areas in this state. (Later introduced as Senate Concurrent Resolution 7.)
SENATOR MCGINNESS MOVED TO INTRODUCE BDR R-717.
SENATOR SHAFFER SECONDED THE MOTION.
THE MOTION CARRIED. (SENATOR SCHNEIDER WAS ABSENT FOR THE VOTE.)
*****
Chairman Rhoads informed the committee there would be a presentation by the State Department of Agriculture on background information, programs, and potential issues for this session and introduced Paul J. Iverson, Director, State Department of Agriculture. Mr. Iverson said the department has a tremendous number of responsibilities and in the recent crisis of his hospitalization, the department’s support staff competently handled the business of the agencies. He introduced Don Henderson, Assistant Director, State Department of Agriculture, and said Mr. Henderson would give the presentation to the committee.
Mr. Henderson said his presentation would provide the committee a brief overview of the department’s responsibilities, how successful it has been, and the department’s future goals.
Mr. Henderson explained in 2000 the department completed a comprehensive strategic plan to establish future goals and measurement indicators for the department. He said the plan also outlined a progressive mission or vision for the direction of the department. Mr. Henderson noted the primary function of the department was the welfare of all persons residing in the State by encouraging the advancement and protection of Nevada’s agriculture and its related industries. He added the department was reorganized to help meet its mission. He explained the department was overseen by the State Board of Agriculture, which sets direction and establishes policy. He said the board is comprised of 10 members from various areas of agriculture, including petroleum, pest control, nurseries, and other disciplines related to agriculture.
Mr. Henderson explained the department had 94 full-time employees and 132 intermittent employees. He said most of the intermittent employees were part‑time brand inspectors. He drew attention to page 2 of Nevada Department of Agriculture Agency Review and Update, Exhibit C, and said it was a break down of the divisions and their programs.
Mr. Henderson said over the past several years the Nevada Department of Agriculture had been making significant changes in many of its programs and priorities in order to meet ever growing needs of the State. He said with the tremendous growth in West Nevada, more focus has been directed on urban issues to fulfill the department’s regulatory and service programs in an effective manner. Mr. Henderson emphasized agriculture was one of the basic industries of the State. He explained production agriculture was the main industry of many of Nevada’s 17 counties. Mr. Henderson said working with the State farmers and ranchers was required to meet the department’s statutory requirements. He stated strong and economic sustainable rural counties and communities make for a strong Nevada.
Mr. Henderson reiterated the department has been focusing on the State’s urban areas. He explained the task of regulating several industries had become increasingly challenging. He said the department’s regulatory activities were designed to protect the general public and the industries that provide goods and services to citizens.
Mr. Henderson said the department’s new agriculture enforcement unit had become a key element in keeping unlicensed and dangerous agricultural material out of the State. Agricultural enforcement had been added to the department’s Department of Homeland Security duties as many trucks and trailers had to be searched and checked as they pass through the State. He said the resulting increase of nursery inspections and surveys for insects had saved the State from unwanted pests and expensive control efforts.
Mr. Henderson said the new continuing education program for pest control operators had made the industry safer, and better informed on new technology in the uses of pesticide and herbicides.
Mr. Henderson explained there were surveys being conducted for anthraces, West Nile disease, and chronic wasting disease in deer and elk populations. He noted other priorities of the department were rabies and plague in other wildlife species.
Mr. Henderson said to address the challenges of the State’s growth, the department had incorporated a new five-step formula addressing the regulatory and service programs the department supplies. He said the new formula gives the department the opportunity to prioritize its activities to better meet the needs of the citizens in both rural and urban areas of the State. He explained the key elements of the formula were shown on page 2 of Exhibit C. He said those elements include, exclusion, detection, control, enforcement, and marketing.
Mr. Henderson said the exclusion program’s focus was to keep unwanted agricultural materials, pests, and plants out of the State. He explained exclusion activities include quarantines, border and highway inspections by the new agricultural enforcement unit, and delivery point inspection at nurseries, warehouses, construction sites, wholesale grocery outlets, and livestock sale yards.
Mr. Henderson said the new program, called the agricultural enforcement unit, involves 10 P.O.S.T. certified, part-time law enforcement officers who have been trained and equipped to enforce quarantines, conduct inspections at points of origin and destination, and conduct random vehicle inspections throughout Nevada. He said the unit sometimes worked in conjunction with the Nevada Highway Patrol. He explained since becoming operational in January 2002, the agricultural enforcement unit had conducted countless vehicle stops that resulted in 3377 vehicle inspections and 595 citations. Mr. Henderson added most of these activities had been centered in Clark County because of its extended growing season, large horticultural industry, the amount of nursery stock, and the large number of agricultural products moving into this portion of the State from quarantine areas of other states.
Mr. Henderson explained detection was an essential function of the department. He emphasized pests and animal-related diseases that might affect the State’s animal population, agricultural industries, and the general public must be detected. Mr. Henderson explained the components of the detection section include survey, sampling, and identification of samples collected or submitted by citizens and businesses throughout the State.
Mr. Henderson said trapping and sampling of both insects and wildlife of the State were also part of detection. He explained trapping and surveying included Japanese beetles, gypsy moth, Africanized honeybees, and red imported fire ants. He noted that in the last several years trapping has also included survey of Mormon cricket and grasshopper populations. He said if the hatching areas could be detected early in the spring then these insect populations can be controlled or destroyed. Mr. Henderson explained exclusion and detection allows the department to save the State millions of dollars, if these pests and diseases are prevented from becoming established.
Mr. Henderson told the committee the department had a responsibility to inspect plant stocks in over 600 nurseries across the State. These inspections were for diseases, pests, and general health of the plant stock. He said the number of nurseries to be inspected was growing almost on a weekly basis.
Mr. Henderson said in a continuing effort to keep Nevada free of red fire ants, the department had placed 16,000 traps. He said 750 sites had been trapped in the Las Vegas area. He explained of the 750 trap sites 3 sites had imported red fire ants. He said the infected sites were treated for eradication. Mr. Henderson indicated the treated sites would continue to be surveyed for future infestation as well as the other sites. He explained in Texas the cost of imported fire ant infestations currently exceeds $1.2 billion per year.
Mr. Henderson said another project of the department was the West Nile Virus. He explained the disease was first documented in Uganda in 1937, and is commonly found in humans and bird populations, but was not found in the Western Hemisphere until 1998. Mosquitoes feed on infected birds and then transmit the disease to humans and animals when taking blood. Mr. Henderson explained this virus had moved across the United States very fast, and the department had developed a very aggressive surveillance program. Mr. Henderson noted the Division of Health was monitoring cases of the West Nile Virus in humans. He explained the State Department of Agriculture was monitoring seven chicken flocks and it had been working with mosquito control districts to collect samples of mosquitoes for testing. He said the department was also working with the Bureau of Land Management in drawing and collecting blood samples of captured wild horses. He explained the department also works with the Division of Wildlife and animal damage control to check wild birds and dead birds found in wilderness areas. He said the department also works with veterinarians across the State who draw blood from domestic horses.
Mr. Henderson said the department could say with confidence that Nevada was free of the West Nile Virus, however, it is likely the State would become infected sometime in the near future. He said detection in the horse population does not automatically indicate the disease will be in the human population, and stated the incidence of the disease being transferred to humans is very low.
Mr. Henderson explained control of pests and disease was a major element in protecting Nevada’s citizens. He said the department continuously focuses on projects to stop and control these unwanted pests, diseases and hazardous materials such as pesticides and herbicides. He said the department’s programs were focused on inspections of nurseries, retail outlets, newly landscaped areas, and existing landscaped sites in order to control pests and disease.
Mr. Henderson said another program was eradication. He emphasized when the department finds unwanted pests and diseases it must aggressively work toward eradication to protect farmlands, livestock, wildlife, and Nevada citizens. Mr. Henderson explained the department had taken steps to control and eradicate noxious weeds, anthraces, plague, equine infection anemia, Japanese beetles, imported red fire ants, Africanized honeybees, and other animal and plant pests. He said the department also pursues suppression when eradication was not possible.
Mr. Henderson explained the department had begun an educational program to effectively control pests and diseases that involved training for businesses, classroom presentations, and distribution of information materials to the general public.
Mr. Henderson said the State Department of Agriculture plays a leadership role in containing and eradicating weeds across the State. He explained the need to control and eradicate noxious weeds had led to the establishment of 10 weed management areas in the past 6 months. He noted in cooperation with Nevada Department of Transportation (NDOT) the State Department of Agriculture treated 4700 miles of State highways during fiscal year 2003.
Mr. Henderson explained the department developed and implemented the Nevada weed-free hay certification program over the past biennium. He added during the past summer over 3500 acres of hay had been field inspected and certified as weed free.
Mr. Henderson said the first foreign disease outbreak in Nevada since the 1970s was Exotic New Castle disease. He explained Exotic New Castle disease is a contagious and fatal viral disease affecting all species of birds, domestic and wild. He added this disease was one of the most infectious diseases of poultry in the world. He noted the disease was akin to foot-and-mouth disease in cattle. Mr. Henderson explained chickens and eggs are safe because this virus does not affect humans, however, it is very deadly to birds.
Mr. Henderson asserted all birds in quarantine areas had to be tested and certified free of the disease before being transported out of a quarantine area. He explained all birds identified as having the disease were purchased, tested, slaughtered, and then the carcass was disposed of properly.
Mr. Henderson continued by saying over the last biennium the department has emphasized the training for licensing pest control operators for the restricted use of pesticides certification programs. He said the results of one of the programs had certified 972 out 1101 licensed pest control operators who meet the State requirements for annual training in the past year. He said six 2-day pesticide safety seminars were held in fiscal year 2000. He noted that a total of 444 commercial operators and 62 private operators had been certified through the training sessions.
Mr. Henderson explained that animal damage control was an important section of the department. He said animal damage control continues to work with the wildlife division on a hunter-funded program aimed at providing predator protection for sage grouse, sharp tail grouse, bighorn sheep, mule deer, and pronghorn antelope in specific areas. He added animal damage control worked to control bird populations around airports and to control raven populations for the protection of desert tortoise.
Mr. Henderson said as a regulatory agency one of the State Department of Agriculture’s functions was enforcement. He noted the new agriculture enforcement unit has increased the level of inspection of agricultural material coming into the State. He stated more enforcement work needed to be done.
Mr. Henderson said the department was also responsible for licensing and continued monitoring of pest control operators, livestock brands, all commercial livestock buyers, and hay buyers. He said part of that responsibility was the registration of all pesticides, chemical fertilizers, and antifreeze sold in Nevada.
Mr. Henderson explained another element of monitoring was inspections performed by the weights and measures division, which included all gasoline quality testing, and testing of gas station pumps and commercial scales. He added this division also investigated pesticide misuse, farmworker protection, pretreatment of new homes for termite prevention, and reports of gasoline that does not meet State requirements.
Mr. Henderson said in order to accomplish the goals established for enforcement the State has three laboratories which are a pesticide analyst lab in Reno, and two petroleum labs, one in Las Vegas and one in Reno. He added the department also has two animal disease diagnostic labs, which are in Reno and Elko. He noted many diseases associated with livestock, domestic animals and wildlife are analyzed in these labs.
Mr. Henderson said the final element under the enforcement unit was a section to take actions on violation of State regulations and statutes, which was established to protect citizens of Nevada.
Mr. Henderson explained part of the department’s responsibilities also falls under marketing. He noted with a global economy and increased international trade the department was helping Nevada agricultural producers by grading agricultural products for export, which adds value to the products. He added the department also certified agricultural products. Mr. Henderson said these products were normally inspected in the field, which provides verification for buyers of the quality of the products being purchased.
Mr. Henderson said two of the major products certified in Nevada were alfalfa seed and garlic. He explained the department helps set standards of certification and to verify Nevada’s products meet national and international standards. He added the value of these products was very significant to the State.
Mr. Henderson explained the department was pleased with its accomplishment in assisting farmers and ranchers to access various markets for their products. He said with a United States Department of Agriculture (USDA) grant and help from the Nevada Association of Counties, the State Department of Agriculture had implemented an active agriculture marketing and promotion program. He said in total there were 62 programs and projects to promote or expand Nevada’s agricultural markets. He said of the 62 programs and projects 34 of them are direct financial grants to Nevada producers, agricultural businesses, and organizations. These grants are for funding educational programs, conducting test plantings of alternative crops, which includes native seeds, and grants for growing grapes for wine production.
Mr. Henderson explained another part of the marketing program included developing and coordinating two trade missions to Mexico in the next year, hosting business conferences, sponsoring a program to promote native plant seed in Nevada, a development and implementation program, and an education program for Nevada producers. He stated these had been extremely successful programs for the department.
Mr. Henderson noted a program that might be of interest to the committee was the Virginia Range Estray Horse Program. He explained the program goals were to remove excess horses to an adoption program or to a preserve, to remove horse where human safety was a concern, remove horses where they might be in harms way, remove horses that exceed habitat capacity, which was targeted between 400 and 600 head, and to evaluate the range conditions to assess carrying capacities. Mr. Henderson explained the department had recently expanded the program to include working with the Department of Corrections in a prisoner horse-gentling project, which increases the adoptability of the horses.
Mr. Henderson pointed out image 26 on page 6 of Exhibit C and explained this graph shows the estimated census of the horses in the Virginia Range, and shows how many horses are removed on an annual basis. He said the department started removing horses from the range in 1995. He explained a total of 166 horses had been removed from the Virginia Range alone between fiscal years 1995 and 2002. He said in this fiscal year, however, 300 horses had been captured and placed in the various adoption programs.
Mr. Henderson explained that fiscal year’s activities included the State Department of Agriculture’s first successful helicopter horse roundup which captured and permanently placed 144 horse in a sanctuary in California. He noted the department’s goal was to remove 250 to 300 horses per year from the range until the target population was reached.
Mr. Henderson explained the State Department of Agriculture had requested seven bill draft requests, all of which were actions to streamline or provide clarification for the department’s programs in order to increase its effectiveness and efficiency.
Chairman Rhoads asked whether the place in Virginia City where the horses were ranging was deeded ground. Mr. Henderson replied, “Yes, a large part of the Virginia Range is private property.” Chairman Rhoads asked whether the owners of the property were concerned with the large population of horses on that land. Mr. Henderson responded the Tahoe Reno Industrial Center would like to control the population, however, the residential property owners would rather keep the horses on the range. Chairman Rhoads asked what would happen to the horses if the property were sold to someone who fenced off the property and did not want the horses on the range. Mr. Henderson replied the department would remove as many of the horses as possible.
Chairman Rhoads asked whether there was possible funding for the project to spray for grasshoppers and Mormon crickets before they hatched. Mr. Henderson replied it was not practical to spray before the grasshoppers or Mormon crickets hatch. It was much easier to control them as they hatch. He said often the crickets were on public lands and the department coordinated its efforts with the Bureau of Land Management. Mr. Henderson said he believes the bureau would have funds to help control crickets on public lands. Chairman Rhoads then inquired whether the State Department of Agriculture would have funding for controlling grasshoppers and Mormon crickets on private lands. Mr. Henderson responded, “Not to my knowledge at this point.” Mr. Iverson told Chairman Rhoads he did not believe any funds would be available for private land control of these pests unless the department could get funds from the federal government in cooperation with the counties as had been done in the past. He said the department was pursuing opportunities to obtain funds from counties and other sources.
Chairman Rhoads shared the information that in his area airplane spraying had been tried, however, the benefits were not cost effective. Mr. Iverson said the department had been doing surveys so that these issues could be addressed with the federal agencies. Mr. Henderson said the key to control was to kill the crickets and grasshoppers as they were hatching, which indicates early spring for control. He said it was easier to spray the crickets and grasshoppers on public land where they usually hatch.
Alan R. Coyner, Administrator, Division of Minerals, Commission on Mineral Resources, said page 1 of the Nevada Division of Minerals PowerPoint presentation, Exhibit D, slide 3, states the division’s mission. He explained the minerals division is part of the Commission on Mineral Resources, which had seven members who were appointed by the Governor. Mr. Coyner stated the division had no General Fund money in its budget.
Mr. Coyner said the division’s programs were industrial relations, public affairs, abandoned mine lands, oil, gas, and geothermal activities and it runs the State’s reclamation bond pool. He said industrial relations and public affairs focus on advice to the Governor and the Legislature. Mr. Coyner explained the division provided educational programs to the public, Nevada school children, and teachers about the importance of mining and minerals to Nevada’s economy. He noted mining was the second largest industry in the State.
Mr. Coyner explained the division believed there were about 50,000 physical hazard abandoned mines in Nevada. He said these hazards were old diggings and excavations which had been left from many years ago. He noted in some cases these mines were over 100 years old. Mr. Coyner said the Division of Minerals was the only agency that performed securing of these openings. He reiterated the division believed there were 50,000 of these mines throughout the State that need securing. Mr. Coyner explained a typical securing of one of these mines was to put up barbed wire and signs around the opening. He said the division also reports these mines annually to the various counties that have enforcement authority on the private property where the mines were located. Mr. Coyner noted at the end of the last calendar year there were 9,120 hazards identified, described in writing, and 6,771 had been secured. He said mines not yet secured were mostly on private lands and the division was trying to get private owners to secure those hazards.
Mr. Coyner explained 70 percent of the hazards discovered had been secured and the division worked hard to keep that level at 70 percent or lower.
Mr. Coyner said, on page 2 of Exhibit D, slide 11 was a graph that showed the number of orphan hazards discovered and secured. He explained the orphan hazards were on public lands and the graph showed the private contribution to securing these hazards in the dark color and the division’s contribution in the light color. He said over the last 3 years the division had “put a push” on securing these orphan hazards, which were mostly done through a summer intern program. He noted the program had been very successful in putting college students to work.
Mr. Coyner explained the division had used some volunteer services and pointed out on page 2 of Exhibit D slide 12 was a photograph of a Boy Scout project in Clark County. He said these projects with the Boy Scouts had secured several hundred hazards.
Mr. Coyner explained the division was working more and more with the Nevada Mining Association to backfill some of these hazards which permanently secures them by filling the mines with rocks and dirt. He said on public lands the division must get clearances in regard to archeology and biology. He said in Clark County obtaining permission could be difficult because of the desert tortoise and the bats. Mr. Coyner added the division has permanently secured several mines in Clark County because of the danger to tourists.
Mr. Coyner said Nevada produces oil, but not much gas. He said those oil pumps were in Railroad Valley and Pine Valley in the eastern part of the State. He commented Nevada’s production rate had dropped considerably in the last few years. Mr. Coyner said the production is around 600,000 barrels per day. He said the price was approximately $33 per barrel and those prices were expected to go up, which would result in more oil exports for the State.
Mr. Coyner said the Legislature last session passed a portfolio standard for geothermal or renewable energy that had created a great deal of work. He said the industry in Nevada had been very stable, however, the department expects that to change within the next couple of years. He explained new plants were coming on-line and there was more exploratory drilling going on. Mr. Coyner said U.S. Senator Reid had dubbed Nevada as the Saudi Arabia of geothermal energy. He said Nevada had tremendous known and potential geothermal resources.
Mr. Coyner pointed out slide 19 on page 4 of Exhibit D was a map showing Nevada’s major mines, oil fields, and geothermal plants, and said, “Yes, there is mining in Clark County that contributes to the area’s economy.” He explained slide 20 on page 4 of Exhibit D shows the growth of Nevada’s natural resource minerals industry in the State. He said gold was the largest contributor with over $3 billion of gross sales per year of minerals.
Mr. Coyner explained the United States was in the middle of the largest gold boom ever experienced and most people did not know it. Mr. Coyner said Nevada contributes 75 percent of all the gold production in the United States and was the third largest producer of gold in the world. He explained Nevada produced about 8 million ounces of gold per year and expects to continue this trend over the next few years. Mr. Coyner explained the Carlin Trend area in Eureka county produced 50 million ounces of gold, which was very unusual. He added only two other places in the world even comes near that level of production.
Mr. Coyner said Nevada produces 17 million ounces of silver per year. He explained the closure of the Coeur McCoy mine might drop the level of silver produced in Nevada below 15 million ounces.
Mr. Coyner said gypsum and aggregate production were up because of the rise in Nevada’s population. He said with the population growth there was more demand for aggregate and gypsum for wallboard for building.
Mr. Coyner said slide 30 on page 5 of Exhibit D was a list of new mines due to come on-line in the near future.
Mr. Coyner said the department’s funding generally comes from mining claims so it kept a close watch on Nevada’s active claims. He said the Commission on Mineral Resources had to raise mining claim fees because of the drop of new mining claims throughout the State. He explained if a small miner did not claim the small miner exemption that miners must pay the federal government $100 to maintain a claim each year, and this had contributed to a major decline in mining claims in Nevada. He said mining claims had increased around 7 percent in the first half of the current fiscal year over the first half of the last fiscal year.
Mr. Coyner explained the increase in gold price from $270 to $370 would spur increased exploration in the state. He said finding and activating ore deposits was a time‑consuming activity, 5 to 10 years in some cases. Mr. Coyner stated timely permitting of new mines and expansion of existing mines was vitally important. He said 2 major projects were on hold due to legal challenges and permit challenges over environmental issues.
Mr. Coyner said there was a bill that would come before the Legislature involving corporate guarantee and the availability of reclamation bonds. He said almost all of the State’s mining companies were finding it impossible to get reclamation bonds due to several issues, such as medical malpractice, construction defects, and the terrorist attack on the World Trade Center on September 11, 2001. Mr. Coyner explained if the State takes away corporate guarantee then it is putting the mining companies into a position of having to obtain surety bonds.
Mr. Coyner said the University of Nevada, Reno’s president had reorganized the system and was planning to divide the Mackay School of Mines, thus effectively eliminating it. He said he believed the loss of the Mackay School of Mines would be a great loss to the State as it is famous throughout the world.
Chairman Rhoads asked whether the school would be placed under another division at the university. Mr. Coyner replied his understanding was that metallurgical engineering and the milling part of mining would go to the College of Engineering, and then what was left over would go to the new College of Science. He said there might be a Mackay School of Earth Sciences within the College of Science. Chairman Rhoads asked whether the enrollment in the Mackay School of Mines had gone down. Mr. Coyner responded the enrollment had actually been going up.
Senator Amodei asked whether the State had any operation where silver was the primary product rather than a by-product. Mr. Coyner replied, “Yes, there was a formula that determines whether a mine is primarily silver or gold.” He said the Coeur/Rochester Mine near Lovelock was a primarily silver mine.
Senator Amodei inquired as to whether there was a refining system in State that completed the final refining of the silver. Mr. Coyner replied there were no refineries in the State that refined the silver to the pure quality state.
Senator McGinness asked whether there were any further exploration of oil in Nye County. Mr. Coyner replied, “Yes, there is an upswing and a number of new wells being drilled, however, there has not been a lot of success.
There being no further business, Chairman Rhoads adjourned the meeting at 2:59 p.m.
RESPECTFULLY SUBMITTED:
Johnnie Lorraine Willis,
Committee Secretary
APPROVED BY:
Senator Dean A. Rhoads, Chairman
DATE: