MINUTES OF THE ASSEMBLY COMMITTEE ON NATURAL RESOURCES, AGRICULTURE AND MINING Sixty-eighth Session May 15, 1995 The Committee on Natural Resources, Agriculture and Mining was called to order at 1:15 p.m., on Monday, May 15, 1995, Chairman Marcia de Braga presiding in Room 321 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Mr. John C. Carpenter, Chairman Mrs. Marcia de Braga, Chairman Mr. Max Bennett, Vice Chairman Mrs. Genie Ohrenschall, Vice Chairman Mr. Douglas A. Bache Mr. Thomas A. Fettic Mr. David E. Humke Mr. P.M. Roy Neighbors Mr. Brian Sandoval Mrs. Gene Wines Segerblom GUEST LEGISLATORS PRESENT: Assemblyman Hettrick Assemblyman Ernaut STAFF MEMBERS PRESENT: David S. Ziegler, Senior Research Analyst OTHERS PRESENT: K. Derby; T. Streiker; John Pappageorge, Reno and Silver State Disposal; Verne Rosse, Division of Environmental Protection; Ken Jones; Robin Bain, Clark County Sanitation District; Frank Forvilly, Round Hill Pines Beach; John Michelsen; John Barneson; Gary Michelsen; Jane Beckett; Bill Chernock, Zephyr Cove Resort; Pam Wilcox, State Lands; Ed Bittleston, State Lands; Ron Pacheco, State Lands; Robert Kimball, State Lands; Barbara & Bill Ellis, Zephyr Cove Property Owners Assn.; Gene Empey; Kathleen Farrell, Tahoe Douglas Chamber. Chairman de Braga called the meeting to order and roll call was taken by the secretary. ASSEMBLY BILL 548 - Prohibits state land registrar from charging fees for permits for use of state lands for certain piers and related facilities. Assemblyman Lynn Hettrick, District 39, said A.B. 548 came out of a bill which was passed two years ago in the assembly. The bill enacted fees on piers, buoys, tie lines, docks, boat houses, etc., essentially in Lake Tahoe. The bill reads state- owned waters, and the only state-owned waters in Nevada happen to be Lake Tahoe. The fees came out of the fact in a tight budget year additional funding was needed to support the State Lands office and was one way of generating some funding, which unfortunately fell on only those folks at Lake Tahoe. He said the problem with the tax was supporting an entire state office with a tax affecting a very small group of citizens in the Lake Tahoe Basin. Mr. Hettrick did not dispute State Lands' need for additional funding, and he did not dispute California having taxed those things on the other side of the lake. The issue was a very small group of people in the Lake Tahoe Basin paid a significant amount of income to support State Lands. Mr. Hettrick did not find it an equitable way of funding the office of State Lands. This tax has had a significant impact on businesses and individuals in the basin. One individual would testify it put him out of business and others said the tax was as much as 43 percent of their net profit. People who have lived at the lake for years never had fees on piers, tie lines, buoys, etc. Now they were being charged for things they had not constructed and had been there for years and got hit with a tax after the fact. Mr. Hettrick said A.B. 548 was fairly simple. The brackets take out language which was put in two years ago, which established the tax. It essentially wipes the tax out in entirety. Mr. Bennett asked if this would eliminate all fees and taxes from Lake Tahoe like the Dixie and the major commercial operators. Mr.Hettrick said the fees would be put back prior to the initiation of this tax which was on everything. There were some taxes on some of the commercials, it just changes it back to the way it was. Mrs. Segerblom asked if he was talking about commercial owners who own slips and rent them. Mr. Hettrick said the commercial owners who were included in the taxes before would remain the same. The problem was the fee became too high, relative to what was charged in California, but relative to the ability to use the facilities. Secondly, the fees on private individuals were just too high for the amount of time they can use it. Mr. Bennett referred to Section 1, line 22, regarding short term lease. He asked if it was addressed in other statute, and what was the definition of short-term lease in this case. Mr. Hettrick said he could not say what it was before, he only was trying to put the bill back to where it was. The issue was to take out the unfair tax and put it back the way it was. He had not researched the old law. Mr. Fettic asked if the fees were imposed as a result of public hearings and legislative oversight, coming back to interim finance. Mr. Hettrick said his understanding of how the fees came about was essentially in the last session they needed increases to accommodate their budget and were told to find a way to raise fees and she did what she was told to do. He emphasized he was not criticizing her for that and she would be able to answer questions more accurately. There was controversy regarding hearings, initially some of the people who were on leases on federal land in the basin understood this to be a tax, it was listed in one of the bills as a tax. They questioned it at the time and when they questioned it the federal government representatives in the Lake Tahoe basin apparently told them, don't worry about it because Nevada state taxes do not get passed through federal leases. You will not be hit with a tax on this, you will be okay. They pretty well walked away from it at that point assuming they were covered. Somewhere along the way the tax got changed to fees. The leases on the national land called for fees to be passed through to the lease holders. The bill got passed and a charge for fees was sent to them, they said we were not going to get taxed it was national owned property and a lease. It was true when it was a tax, but not a fee. The charges would be passed straight through according to the lease. Mr. Pete Ernaut, Assemblyman from District 37, which encompasses half of Nevada's Lake Tahoe testified. The speaker, I am sure, echoed the sentiments of the people who live in Lake Tahoe of how punitive they felt and how specific it was to people who enjoy the luxury of having a pier on the lake, which would not add any degradation to the lake. He felt the bill of 1993 was punitive and goes to the worst part of government. Some practical applications have necessarily put people out of business which was not the intent of those who voted on this bill. It was the intent of the speaker and Mr. Ernaut to fix something which was wrong and should not have been passed in the first place. He asked support of A.B. 548. Mr. Hettrick made clear he and Assemblyman Ernaut drafted the bill. Due to expediency Mr. Hettrick's name appeared alone on the bill. Mr. Robert Bell, Desert Recreation, Inc., Laughlin, Nevada, was here to ask for support on passage of A. B. 548. He has nine water taxis, a tour boat, and each casino pays for their own pier. If the costs goes up, he would probably be asked to absorb the cost of the pier tax. Mr. Bell also has other boats and 50 wave runners in other casinos. He has fees from the Coast Guard for inspection, a license from fish and game and felt they were being taxed out of business. It was not only Lake Tahoe but Laughlin also. Mr. Fettic asked how hard the tax would affect him. He said he had not added it up but the tax was substantial. Ms. Karyn Derby, wanted on record she was in support of A.B. 548. Mr. Frank Forvilly, Round Hill Pines Beach, United States Forest Service Land, testified in favor of A.B. 548 (Exhibit C). He noted he had almost been taxed out of business. In 1993 State Lands billed him $16,300 for the fees on the resort on USFS land. In 1993 he had a net profit of $15,000 so in 1993 he went in the hole $1,300. His fees for the last two years 1993-94 and a small amount of 1995, was just under $30,000. His operation runs for eight months, four months a year. The eight months he operated the bill with State Lands was for $30,000 and he had started paying on the bill. The origination of the bill was from Nevada Fish and Game, to control the buoys going into Lake Tahoe. They were looking at drafting a bill for $25 a buoy to control the buoys. State Lands came along and put in a bill to generate a great deal of dollars. To the expense of individuals which has far exceeded what the actual cost would be. He said any way one looks it was a tax. Mr. Forvilly did not think taking all his profit and more was a reasonable tax. The way the current bill was written one would not only pay a tax on the buoy, but the boat tied to it and rented, then if a gas pump was on the dock another fee would be charged and then charged an additional amount to pump gas off the dock. Mr. Forvilly gave information on how they would check who owns the buoys and who to charge the fee to. Mrs. Segerblom asked if he had a concession from the USFS. Mr. Forvilly said yes they have a special use permit from the Forest Service. She was confirming that Mr. Forvilly had a commercial operation, and charging people to use the pier. He could not charge for the use of the pier because it belongs to the USFS and it was open to the general public. He did charge for the gas and the buoys. Mrs. Segerblom asked if he could raise his fees. He tried to raise the fees in 1994 but he lost 20 percent of his business. Mr. Humke asked Mr. Forvilly about the fish and game department he eluded to and asked if it was U.S. Mr. Forvilly said no it was the Nevada Wildlife Division. He was also asked by Mr. Humke regarding the language in the bill from 1993, "....based on fair market value." Mr. Humke asked if it was his testimony that it was not fair and in fact was confiscatory. Mr. Forvilly said definitely, not fair to him when it was more than you make, it can not be a fair fee. Mr. Forvilly said A.B. 496 which we will hear later was only a lengthy 1993 bill. It would help somewhat, but he would still be paying over $9,000 in taxes if he chose to take the buoys out. He would have to pay a diver an additional $50 to come in and drop the buoys at the end of every season. He felt the policing would also be a problem. Property tax on the lake was probably four times what Douglas County residents pay. Mr. Fettic asked if the fees were monthly or yearly. Mr. Forvilly said they were yearly fees. The question was also asked if a buoy had a $250 fee and you tied a boat up to it would it cost another $250 or a total of $500. Mr. Forvilly answered in the affirmative. His season runs for approximately four months, from the last week in May to the last week in September. Mr. Carpenter asked if Mr. Forvilly felt he should be assessed any fee for the items listed. He replied there could be some structured fees. Camp Richardson on the California side charges $25 to $30 a buoy. State lands was asked if they could cut it down to $30, but to charge for a rental boat which is standing in the water has absolutely nothing to do with State Lands. The state doesn't own the water, they own the ground underneath the water. A proclamation was in to the USFS to quit charging fees and let Nevada charge them. "The USFS said forget it, if you do not pay we will throw you out." The USFS charged eight percent right off the top. Now State Lands wants to do five percent and the amount on a gallon of gas would be eight cents he would pay to State Lands. Mr. Forvilly said the gas tank was on the dock, the dock belongs to the Federal government, the lake bottom with the pilings in it belongs to the state of Nevada. The dock goes off the water which belongs to the state and then it goes on to USFS property. The price USFS charged was eight percent of gross. Mr. Forvilly said he was not opposed to paying his share if they could come up with something compensatory to what he made. Mr. John Michelsen, a property owner in Zephyr Cove together with his partner Walter Cox had two buoys in Lake Tahoe for over 30 years. He was sympathetic with Mr. Forvilly's statements. He thought the bill was introduced improperly in 1993, as most of the property owners were not informed. He believed the bill was improper in the first place and Mr. Hettrick's bill was a fair bill to abolish the problem. He wished to support Mr.Hettrick's bill. Mrs. Segerblom asked if the buoys were commercial. Mr. Michelsen said no, private property. She asked if they paid the same as a commercial operator. Mr. Michelsen said $150 a year per buoy for personal use. Mr. Carpenter questioned if they were paying anything for the buoys before the 1993 session. Mr. Michelsen said no, a reasonable tax would be acceptable. He did ask if the tax would be necessary, and would it be proper to charge the tax and the state have to pay to collect the fee. There would be policing, inspections and collection of fees. Mr. Neighbors asked if anyone living at Tahoe could have a buoy in the lake. In the subdivision they only allow so many and Zephyr Cove was cut down on their allotments. Ms. Jane Beckett, Marla Bay, said they had not paid for a buoy because they had not been notified. The bill was passed, no one knew what was going to happen and no one knew how to control it, how to notify people. Mr. Carpenter asked if we would be willing to pay anything. We could pay something if the fee was appropriate, but what will stop this fee from escalating in future years. She said they had tried to control buoys within their field, which were all privately owned buoys. Buoys have to be acquired through a permit with the Army Corps of Engineers. Many, many years ago a gentlemen in Marla Bay went and acquired a number of permits from the Army Corps of Engineers and that was why there has been a buoy field in Marla Bay. With the control of the Marla Bay protective association they tried to control their buoys so no more were put in the lake. They even have trouble finding out who owns the buoys, they try and number them and the numbers fall off or the buoys were cut off. Another concern would be if the fee was paid, perhaps tomorrow it would be on someone else's chain, with the tag cut off. There would be a great deal of maintenance problems with the buoys and a whole department would have to be developed to maintain and control the fees on the buoys. Mr. Bill Chernock, Zephyr Cove Resort, a commercial operator who was extremely affected by the bill, stated he met with the committee on the other bill from State Lands and gave the committee numbers at that time. They basically felt the fee was unfair. They were a small business and following the 1993 session they received a bill to "pay it," with no recourse. When did a fee become unfair, when did it deserve to be removed. Was it when a pretty well run business loses money seven- or eight-out-of-ten years, or was it when a law was passed statewide, collects over two-thirds of its total revenue from a small group of citizens and businesses in one portion of Nevada's part of Lake Tahoe. Would it be when a statewide law collects over a third of its total revenue from two small commercial operations. Was it when these fees had been charged and no services were rendered by the state agency to earn those fees. Would it be when less than one percent of the state's population was being told, you will subsidize operation and services for the rest of the state. Would it be when it literally forces an operation out of business, was that when it becomes unfair. The state not only loses the revenues from those fees, but the jobs, taxes, and the legitimate fees it has been gaining all along. Mr. Chernock continued to give reasons to support A.B. 548. Mrs. Barbara Ellis, represented the Zephyr Cove Property Owners' Association, which was the other half of Zephyr Cove from the lodge. The president of the association was unable to be at the meeting, but Mrs. Ellis read a letter from him, (Exhibit D). Mrs. Ellis spoke for herself two weeks ago. Her family bought their house at Lake Tahoe in 1930, today the house with no central heating and a maximum use of three months, was taxed at $5,000 a year, and they have to rent the house out in order to pay the taxes. In renting the house they need to furnish a buoy for those who have a boat. They have two buoys and had to pay $600 for the two years and neither one of the buoys was used. She talked of the associations permitting 74 buoys and the amount of liability each would have to carry if they had a buoy. Most of the houses were inherited from families who built them prior to 1940. Mr. Carpenter asked who required the insurance policy. She said she understood it was State Lands who required the policy. She said there were 46 buoys in the field who paid and 36 could not afford them. Some were reassigned and some in the sand were removed. They have a property manager and she thought he had spent most of his time the last two summers policing the buoys. Mr. Fettic asked if State Lands had provided any services. She indicated they had not received any services from State Lands; they had only taken their money. Mr. Gene Empey, signed up but did not know if he was for or against the bill. Mr. Empey was a 41 year resident of Zephyr Cove and he used to manage Zephyr Cove Lodge in the 50's and 60's. In 1979 the state legislature determined the state owned the land below 6223 called the datum mark, the original lip of Lake Tahoe above sea level. There was a six foot cushion for the dam which raises the water to 6229.6. The lake goes up and down and the last three years the water has not been high enough to run out. There were a few protected harbors that were impacted due to the water level. The state did not own those waters which were there during the high water mark and often the low water mark goes below the state point of ownership. People were being charged for the ownership of lake front property, from county assessments. The county adds additional value for being lake front property. Boats were licensed by the state and yet under the law passed in 1993, people were being taxed again for owning boats. Gas taxes were also being paid for the use of those boats. He noted the buoys put out during the drought were probably on state land, however in years of high water, buoys were not put out on state land but were on the area between the high and low water mark. He did not think the state had a legal right to tax people for buoys which were not on their land. The water was managed by the Federal government and he did not think the state of Nevada claims title to the reservoir cushion of water which existed in years of high water. He did not think it was a fair tax to put on people who have by chance a pier. The state of Nevada owns approximately 30 + miles of lake front. The lake was 72 miles around, and California owns about three-fifths and Nevada owns the difference. George Whittell owned 14 miles of lake front, much of the property one could not put a buoy out if they tried because of the terrible weather which can happen on the lake. Mrs. de Braga said they would interrupt the hearing on A.B. 548 and hear A.B. 471 and then come back to the issue. ASSEMBLY BILL 471 - Prohibits sale and certain use of phosphate in laundering. Mr. Dave Ziegler, Senior Research Analyst, went over the memorandum of research on phosphate-free detergents (Exhibit E). He said there were some testimonials both pro and con on A.B. 471. The bottom line would appear to be on the residential, household laundry part of the equation there does not seem to be too much question the phosphate-free detergents were readily available and there was no impact on the consumer costwise or other. On the institutional and industrial side of the equation it seemed to be a little less clear. The industry people felt the phosphate-free products were inferior and would be a problem in the institutional, industrial sector. Mr. Ziegler did say from everyone he had talked to a pound of phosphate into the sewer system through detergent use or whatever, would cost $13 to take out again. Mrs. de Braga asked if there was research of the cost for industrial years between phosphate and phosphate-free detergents. Mr. Ziegler said on industrial use the testimony from the chemist at Mission Industries there was an increased chemical cost because they have to add chemicals to adjust alkalinity in the industrial process. They did say chemicals were a small part of their overall costs. Mr. Bache asked about lines 4 and 5 of the bill and wanted to know if it included dishwashing detergent. Mr. Ziegler said the wording in the bill could be clarified in that area. Mr. Bennett asked Mr. Ziegler about the standards on page 6 of Exhibit E. The key for laundry detergents was 0.5 percent by weight elemental phosphorus and asked if the bill should be adjusted accordingly to fit the chart. Mr. Ziegler said if the committee was so inclined to amend and do pass or do pass the bill it should be clarified. Mr. Sandoval said Mr. Ziegler eluded to the effect on Clark County was there an effect on Washoe County. Washoe County has strict phosphorus discharge limitations in their permit at the Reno/Sparks plant. They use a different process, one being a physical chemical which they use in the south and the other being a biological chemical which was used in the north part of the state. There would be some benefit to Washoe County as well. Mr. Sandoval also asked about the letter regarding disinfecting linens in hospitals which implies they could not reach sufficient disinfection level if the phosphate level was decreased to 0.5. He said they really did not know the answer and could not understand how detergents could be held to disinfect better than phosphate free. Mr. John Sande, representing the Soap and Detergent Association, provided a letter dated May 15, 1995 from the Soap and Detergent Association. According to them there were specific benefits to phosphate detergents especially for industrial and institutional products. Over the years there has been a decrease in the amount of phosphate and they said in southern Nevada to their knowledge no national brand seller of detergents used any phosphate in residential or domestic detergent. He also spoke to the Clark County Sanitation District and had hoped to get more information for the committee. The Soap and Detergent Association was having their annual meeting this week and could not come out and testify. However, maybe a compromise could be made with the Clark County Sanitation District over this bill and get some language which will work for everyone. Mrs. de Braga asked what volume of phosphates were used by the commercial industries for phosphates right now. Mr. Sande said it varies anywhere from .5 to 8.+ he believed. He would answer it specifically as soon as he could get the answers. Mr. Carpenter thought it would be important for him to contact the hospitals and hotels for their standards and use of phosphates. Ms. Robin Bain, Plant Manager for the Clark County Sanitation District facilities in Las Vegas testified. She noted someone had asked about hospitals both in the southern part of the state as well as the northern part of the state. The laundry was being done in California or they were going to a company called Sierra which was here in the north. When Sierra was read the proposed bill they said they would not have a problem complying with the standard. Mrs. de Braga asked if Ms. Bain would consider the 0.5 for household use and the higher 8.7 for industry and hospitals for two years to see what the effect had on the water treatment plant. Ms. Bain said they were most willing to find a compromise if it is what it takes. She said their goal was to keep the cost down to their rate payers. In the research Ms. Bain said for a nickel's worth of phosphorus, pound per pound it cost $13.16 to take it out. It is an easy point source to try to remove from the waste strain. She noted the 8.7 percent number throughout the country was largely attached to dishwashing detergents. Other municipalities in other states have banned the use of phosphorus in dishwashing detergents above the 8.7 percent. Some other states completely waive the institutional and industrial uses. She said they would be amenable on a trial basis for two years and then come back if they had to. Mrs. de Braga asked if 100 percent of the phosphate was removed . Ms. Bain said no about 97 percent of the phosphorus was removed. They receive about 3200 pounds a day and they need to go down to 180 pounds a day. Mr. Carpenter asked Mr. Sande to comment on the proposal to amend the phosphates for residential and 8.7 for industrial and hospital. He said he would contact the association to see if the compromise could be made. Mrs. de Braga asked how the institutional and industrial areas be defined. Mr. Sande said he would look at the other bills but believed if it said users of to exclude residential uses of products and be for commercial uses for profit purposes. He felt it would be fairly easy to define. Most of the large commercial entities would buy directly from a supplier as compared to going to a store and buying it off the shelf. Mr. Carpenter said Ms. Bain and Mr. Sande could come back with some language agreed upon so the bill could be processed. Mr. Sandoval said he had read the letter from the Soap and Detergent Association which stated there was not a direct relationship between a reduction in the amount of phosphorus and the improvement in water quality. He would like to confirm if we were accomplishing something by bringing it down to the 0.5 or the 8.7. If we brought it down to 0.5 would it save much money? Ms. Bain said she had read the letter and the point in item number two. The improved water quality has come through the regulations through the EPA and the NDEP. What they were trying to do through this ban was make it a more cost effective way of complying with the law. She did not expect the water quality in the Las Vegas Bay to improve because of this ban. They already have to meet the 180 pounds a day. What she did expect was the savings of $13.16 for every nickels worth of phosphorus which would come to them from the point source. It effectively increases the capacity to treat phosphorus. They would have a longer time to accept higher flows before they had to add more chemicals or all new properties to remove the phosphorus. Mr. Sandoval said if Ms. Bain indeed got her 0.5 at a cost of $13.16 to clean it now, what would it cost her now if the bill were passed with all the provisions? She said it would still cost considering the facilities which had been built and would be about $5 directly related to the chemicals and the electricity associated with moving the water and moving the phosphorus out of the water. It would be an operational savings which they would hope to save of the increment which would not be coming to them. Mrs. de Braga assigned Mr. Bache to work with Ms. Bain and Mr. Sande for language on the bill. Mrs. de Braga closed the hearing on A.B. 471 and returned to the discussion on A.B. 548. Ms. Kathleen Farrell, Executive Director, Tahoe Douglas Chamber of Commerce, which was a 530 member organization of businesses on the south shore of Lake Tahoe testified. She had also been given the authority from the Director of the Gaming Alliance at Lake Tahoe, which represents the gaming interest on the south shore. "With the proliferation of gaming has also come destination of marketing and the need to capitalize on the diversity and honing the evernarrowing competitive edge. It was their belief at the Chamber of Commerce not only was the tax or the fee unfair as it places an unequitable burden on but a few citizens and businesses, but also would be a major disincentive for enhancing one of the most viable attributes, boating on Lake Tahoe." Mr. Robert Kimball, Zephyr Cove Resort, noted one member of his resort had already testified but he would like to bring forward some other points. The bill which was passed last session caught everyone by surprise. They had spent much time with State Lands trying to work out a reasonable structure. The law was explicit, they could not negotiate. They did have to pay some $29,500 a year in fees. The fees come from many different directions, Mr. Kimball said there were in lieu of fees Mr. Forvilly and Mr. Chernok had not talked about. Mr. Kimball pays the Federal government for permission to operate on the Zephyr Cove Resort as it was a USFS facility and they were the permittee. They pay a percentage of their gross to the USFS, they in turn send back to the state, in-lieu-of-fees, which was 20 percent of what was paid the USFS. Presumably to pay back the fees the state loses in assessed valuation. The fees have been paid on gross revenue. Mr. Kimball said they look at the tax or fee State Lands was imposing as double dipping. The rental boat fee requires a fee for the buoy, rental boat, the pier and the fuel on the pier. This becomes very expensive and when fees take one third of the buoy rental it was exorbitant. He did not believe anyone could pay reasonable fees and pay for the enforcement to make it just. Mr. Kimball admitted he did not want to pay any fees. He spent $4 million in the state to put on a brand new vessel and he had the privilege of paying the sales tax on it. He said he would not have put himself on the line for the large expense if he had known State Lands was going after him. Last year they paid the state of Nevada some $750 thousand in various taxes both county and state, and a great deal of it was the sales tax on the new vessel. He had been doing business in the same location for years and never had to worry about State Lands coming down on them. Ms. Wilcox has a job to do and was very efficient. Ms. Pam Wilcox, Administrator, State Lands, stated the beds and banks of all navigable bodies of water in the state belong to the people of Nevada. They were held in trust by the state in perpetuity to protect the public values found in those bodies of water. Property owners have special privileges at Lake Tahoe or on any navigable body of water because they were permitted under state regulations to apply for permits to have buoys and piers on the State's land. They can put their private facilities on this land which belongs to the people of the State. No one else can do so, they must be a property owner to do so. She complimented Gene Empey on his excellent statement and his trip through history, he was right the State only owns to a specific mark in Tahoe and would be the low water mark. They were very careful to only charge for facilities which extend below that mark. If A.B. 548 were enacted it would take it back to no fees. People who had private facilities on submerged land before two years ago did not pay anything. They had their private facilities on the peoples' lands for free. When the bill was drafted two years ago they tried to make it fair, they did a lot of research. Ms. Wilcox said if the committee felt the fees were too high they were certainly open to discussion. A.B. 496 did try to correct some of the problems people had come to them with, including the problems commercial operators had, by capping it at five percent, which she felt was a very reasonable fee. No one likes to pay fees, particularly when they did not have to pay them in the past. Ms. Wilcox made analogies regarding living on the lake or a golf course or park. The taxes would be higher because of the good view, etc., those people would not have the privileges one did by living on a navigable piece of water. She said if we do not require people to pay for private facilities on the peoples' land, we would be giving away our public resources. There has been discussion if these were a fee or taxes, and she felt they were neither; they were fees for value, people were paying for a value they were getting in their use of state lands. Mrs. Segerblom asked the difference in the amount someone has to pay for a concession at Lake Mead and a concession at Lake Tahoe. Ms. Wilcox said Lake Mead was not a navigable body of water, the Colorado River was. National Parks would set the fee and charge. Mr. Bennett asked Ms. Wilcox what the commercial fees were prior to the 1993 session. She said she was sure they paid other kinds of fees to other agencies. But they were not paying a rental or any other kind of fee for the use of the peoples' land. Mr. Carpenter said in Ms. Wilcox's memorandum, the revenue if A.B. 496 was enacted would be closer to $200 thousand. Would that be for each year of the biennium. Her earlier estimate was for $120 thousand the first year and $150 thousand the second year. She agreed if everyone paid their bills and everyone was under permit it would be $200 thousand. Neither one of the commercial businesses at Zephyr Cove paid anything last year. They have started to make some payments this year and have been working with each other. What about the rate of compliance said Mr. Carpenter. There has been a lot of testimony it would take a lot of money to police this piece of legislation. What has been the rate of compliance this last year. Ms. Wilcox said the rate of compliance had been very good, they did have a problem at Marla Bay. They have generally identified more than 90 percent of the owners of structures in other areas along the lake. She did not feel it was much of a problem and most people pay their bills. They do spot checks, and for the most part people were coming in. What percentage were the fees in regard to Ms. Wilcox's total budget. The budget for State Lands was a bit below $500 thousand. This was not a fee for service, this would be a fee for value. If all the fees were rejected the $120 thousand for the first year and the $150 for the second year would have to be made up. Mrs. de Braga said it was the intention to put the bill into a subcommittee along with A.B. 496. Mr. Fettic told Ms. Wilcox she does a good job and was a fine administrator, but why were taxes imposed in 1993. She said the two years preceding the 1993 session were severe budget cuts. When State Lands went into the budget cycle State Lands was told to evaluate potential sources for gaining revenue. The department looked at different ways people use public lands for private facilities and decided there was a gift of public resources to tap. Mr. Fettic said he felt as if it was another thing where the government sniffs around to find money, and was not blaming Ms. Wilcox. Mr. Fettic did not like the whole thing, the people got slammed, it was unfair and they did not know it was coming. When using all these phrases, it was the public land sitting under 20 to 40 feet of water, but it was to fill a hole in the budget. Maybe they can pay something but I think some of the stories were just a little heavy to carry. Speaker Lynn Hettrick did appreciate the concern for the public trust but wondered how they took care of it before 1993 when the tax was added. He had correspondence as late as May 5, 1995 listing the high water mark that State Lands sent out saying people owed taxes on various units up to the high water mark, not the low water mark. He was told the opponents of A.B. 496 tried to work with State Lands, and he made it clear he was not critizing Ms. Wilcox, as she could not control every item which goes out of her shop. They offered to work with State Lands on A.B. 496 and basically what they heard was the hearing date on the bill. They did not get an opportunity to participate, they definitely want that now. They do pay higher fees in property taxes and other fees. In terms of the enforcement, if they do not intend to get into it, then it would be absolutely unfair. The honest person who pays the tax would be basically penalized for the person who does not. Fees being paid on a monthly basis with enforcement would wipe out the profit. The way the bill was structured was unfair, five percent of the gross in A.B. 496 could be 100 percent of the profit of the company, which would be absolutely unfair. When they talked about five percent they were talking about a $600 buoy which would be $30 a year. Every expense they have on the whole property was being taxed again at five percent. Mr. Carpenter asked Ms. Wilcox if she provided any service for the people at the lake. She said they provide them with the use of the public land. He asked if there was anything else they did in the way of service for them. She noted they were usually a user friendly agency. When people need permits from State Lands they usually need permits from TRPA and Army Corps and they tell us State Lands was the facilitator in the process and it was their help that helps them get all the other permits from agencies which were much tougher to deal with. Mr. Carpenter said if they did not get any funds from the taxes, how many people would you have to lay off if the money committee did not fund the agency from general funds. Ms. Wilcox said their budget was a general fund budget, if it were not there would be a substantial hole. She said they had only three land agents in the office and they do the whole state, one does navigable bodies of water. The office consists of three land agents, one engineering tech, a title position, two clerical positions, a planner and Ms. Wilcox. They have a very small agency and do a lot with what they have. Mr. Carpenter felt the agency should be coming out of the general fund and not from these people. She said the service they provide was to the public generally and state agencies specifically. Mrs. de Braga closed the hearing on A.B. 548. A subcommittee of Mrs. Ohrenschall, chairman, Mr. Sandoval and Mr. Fettic will meet and report back to the committee. Mr. Robert S. Proctor asked to have a letter (Exhibit F) written into the records. ASSEMBLY BILL 147 - Makes various changes to provisions governing license agents of division of wildlife of state department of conservation and natural resources. The bill the committee sent to the Senate needed to be concurred with or not. After discussion it was noted to leave the fee at one dollar and concur with the Senate. It was unanimous by all members present. Meeting was adjourned at 4:00 p.m. RESPECTFULLY SUBMITTED: Pat Menath, Committee Secretary APPROVED BY: Assemblyman John C. Carpenter, Chairman Assemblyman Marcia de Braga, Chairman Assembly Committee on Natural Resources, Agriculture and Mining May 15, 1995 Page