MINUTES OF THE ASSEMBLY COMMITTEE ON NATURAL RESOURCES, AGRICULTURE AND MINING Sixty-eighth Session May 17, 1995 The Committee on Natural Resources, Agriculture and Mining was called to order at 1:15 p.m., on Wednesday, May 17, 1995, Chairman John C. Carpenter 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 Lynn Hettrick STAFF MEMBERS PRESENT: David S. Ziegler, Senior Research Analyst OTHERS PRESENT: Jack A. Coons, Clark County Wildlife Advisory Board; Ray Bacon, Nevada Manufacturers Association; Joe Johnson, Toiyabe Chapter Sierra Club; Mark Lewis, Legend Inc.; John Lukens, Bondar-Clegg Inc.; Roy McMichael, Chemex Labs; David Going, DIR/OSHES; Ed McIntire, Lyon County Wildlife Advisory Board; Richard A. Grondin, Barringer Labs; Russ Fields, Division of Minerals; Richard C. Davis; Verne Rosse, Division of Environmental Protection; Ed Wagner, Coalition for Nevada's Wildlife; Peter Krueger, Nevada Petroleum Marketers Assn.; Doug Busselman, Nevada Farm Bureau. Chairman Carpenter called the meeting to order and roll call was taken. He explained they would be taking the agenda out of order as the co-chairman would have to leave to meet on another issue. The committee would be hearing A.B. 307. ASSEMBLY BILL 307 - Makes various changes regarding state department of conservation and natural resources. Research was done by Dave Ziegler which showed in 1995 there would be four members of the present board of Wildlife Commissioners who would be up for reappointment. The ranching person, two sportsmen and one general public were the four positions up in 1995. In A.B. 307 as amended the one general public position would be replaced with a sportsman. If A.B. 307 was effective October 1 and language was written, it would retain the present members of the commission until they were reappointed or replaced under the new system as described in A.B. 307. Mr. Carpenter brought forth this recommendation for approval to have an amendment drafted per the committees' instruction. He noted if the commissioners would stay on the board until their term was up there would be a smooth transition of the board over a period of years. Mr. Fettic said his concern was the transition be orderly and what the chairman had explained satisfied him. Mr. Carpenter said if there were no more comments Dave Ziegler would be instructed to go to the bill drafters and write an amendment with the concerns outlined regarding the Board of Wildlife Commissioners. Mrs. Segerblom asked if there was a vacancy on the board at this time. There were no vacancies on the board at this time. SENATE JOINT RESOLUTION NO. 7 - Expresses support of Nevada Legislature for ranching and farming in Nevada and expresses its opposition to any extensive and unreasonable reform of existing regulations of Federal Government concerning management of public rangelands. The chairman said there were some minor amendments proposed by Senator Rhoads (Exhibit C). He would entertain a motion on the resolution. ASSEMBLYMAN NEIGHBORS MOVED TO AMEND AND DO PASS S.J.R. 7. ASSEMBLYMAN BENNETT SECONDED THE MOTION. THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. ASSEMBLY JOINT RESOLUTION NO. 35 - Urges Congress to reduce paperwork requirements associated with National Environmental Policy Act. ASSEMBLYMAN HUMKE MOVED TO DO PASS A.J.R. 35. ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION. THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. ASSEMBLY JOINT RESOLUTION NO. 36 - Urges resolution of litigation over authorization of grazing permits in Humboldt National Forest. ASSEMBLYMAN HUMKE MOVED TO DO PASS A.J.R. 36. ASSEMBLYMAN BENNETT SECONDED THE MOTION. THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. Chairman Carpenter said on the end of the discussion on A.B. 307 there were some recommendations from Ms. Tina Nappe (Exhibit D). She noted we should consider some revisions to the County Advisory Boards to Manage Wildlife since they would be involved in recommending nominations for the Wildlife Board of Commissioners. Mr. Carpenter went through the proposed revisions and commented he did not see it as a problem to increase the number of members on the board as stated in number two of the revisions. He did not know if in the small counties they would be able to come up with five members. Ms. Tina Nappe said that more responsibility would be coming back to the County Advisory Board to Manage Wildlife. The Wildlife Commissioners were responsible for all wildlife in the state of Nevada and therefore had been looking at increasing the participation and process to nominate the Wildlife Commissioners. One of the areas would be to expand the membership of the board. She noted the use of "up to five members or seven members" would not limit the County Commissioners from appointing fewer. Mr. Bennett agreed with the term "up to" instead of mandating five. Mr. Carpenter commented on the third item which had to do with selecting the board by June 1 of each year and subject to the "Open Meeting Law," which they follow at this time. Ms. Nappe commented on the duties of the advisory board and the concern for a process to make nominations for the appointment to the Board of Wildlife Commissioners. The issue was not that sportsmen were not represented, the issue appears to be it was not meeting the needs of some sportsmen in the terms of the kind of representation that they have been receiving. She said her objective was to broaden the opportunity to be appointed as much as possible within the sportsmen community and that was what her proposals address. Mr. Carpenter said the next proposal Ms. Nappe had was to broaden the representation on the county boards. She felt the general public should be represented on the board and this would broaden the opportunity for others to serve. Ms. Nappe said at the last meeting in the introduction to her comments she pointed out how much the general public underwrites wildlife in the state. Support comes from the Federal government, the public who voted on question five, general fund allocations, the voting community, and many other sources of funds. More importantly, wildlife resides basically on public lands and on very key critical private lands. Therefore to expand the interests in wildlife including the general public and giving them the opportunity to participate seemed valuable to Ms. Nappe. Mr. Carpenter said the next item of change would be to have each member serve a term of two years and serve a maximum of two consecutive terms. He felt the two consecutive terms would be alright but changing it to two years from three would be too short and the three years term should be retained. Mr. Carpenter asked the committee for a motion to request a bill draft on Ms. Nappe's suggestions for change on the County Advisory Boards to Manage Wildlife. This would allow the public to give their input by having a hearing on the bill when drafted. ASSEMBLYMAN SANDOVAL MOVED TO REQUEST A BILL DRAFT TO REVISE THE PROVISIONS GOVERNING MEMBERSHIP OF COUNTY ADVISORY BOARDS TO MANAGE WILDLIFE. ASSEMBLYMAN BACHE SECONDED THE MOTION. THE MOTION CARRIED WITH THOSE PRESENT. (ASSEMBLYMAN HUMKE AND DE BRAGA WERE ABSENT AT THE TIME OF THE VOTE.) ASSEMBLY BILL 591 - Provides in skeleton form for voluntary disclosure of certain hazards. Mr. Ray Bacon, Nevada Manufacturers Association, testified, as the bill was currently crafted was a skeleton bill. The bill needed a change to outline the mission. He noted two years ago Colorado came up with a general concept. The litigation and the environmental laws were forcing companies and property owners to ignore potential problems rather than go into the proactive stance of cleanup. Part of the issue was as soon as the Environmental Protection Department in the state or the Federal EPA was notified one would be immediately subject to fines and penalties, consent decrees, court costs and litigation, etc. The general concept was to provide for the person who came forward and said "I think I may have a problem. I want to go higher or through my own efforts if they happen to have the resources, and most will not, investigate the problem and come forward with the plan to clean the problem up." Mr. Bacon said by doing so what they avoid would be litigation costs and potentially they might come up with a way to clean it up other than what the EPA might want by standard convention but could still be totally effective. The typical cases for application would be the reuse of old industrial property. Today they felt the risk was too high to reuse old property and would look for a new piece of ground. Mr. Bacon said the bill as written covers Chapter 459 of NRS and he believed it should also cover Chapter 445 of NRS. There was a subsection in the bill which talked about the civil penalties which only apply to the legislation passed in the 1991 session. The civil penalties portion should be expanded to cover all of Chapter 459 of NRS and the various sections of Chapter 445 of NRS as well. He believed the bill had some safeguards so the bill could not be used to avoid "wrong doings." Mr. Bacon named the states who had passed bills much like this one. Mr. Bacon said the bill would need an amendment in section 2, redefining the word "audit," to clearly state "environmental audit," and be carried through the remainder of the bill. He also said the other amendment would be if someone should discover something in the process of an audit, they could propose a cleanup plan which would be acceptable and execute the cleanup plan unless NDEP could find major flaws in the provision. Mr. Bacon said environmental law was unique in almost everything. If you would be the current owner or operator of a facility, you could pick up responsibility for anything which happened on the site even if it happened a 100 years ago. One would be stuck for the fines and penalties just as if you had caused the problem. The bill would alleviate the problem and move into a more proactive stance. Mrs. Segerblom asked if a Federal grant would be available. Mr. Bacon said not that he knew of. Mr. Sandoval said he was curious in section 6, there was a specific reference to the Second Judicial District Court, Washoe County. Mr. Bacon said he did not know why it was included. Mr. Carpenter asked if A.B. 591 followed closely the laws which had been passed in other states. In the drafting process A.B. 591 was more specific as far as sections of the law, said Mr. Bacon. Most of the others cover water issues, hazardous waste and hazardous materials, one of the other states covers clean air. Other states were more expansive then Nevada's statute. Most have the same kind of provisions, "you can not use the statute as a way to avoid enforcement action." Mr. Carpenter asked if A.B. 591 would need to be amended to comply. Mr. Bacon said they would need some amendments and would involve NDEP to come up with something they felt was reasonable. Mr. Peter Krueger, Nevada Petroleum Marketers Association, testified in favor of A.B. 591. He noted they see the bill as a self environmental audit to encourage operators to become proactive when it comes to the ability to spot potential for problems before they develop. This would show a partnership between private industry and NDEP to work together and not strictly the punitive attitude which might exist in the workplace. He would support modification to the existing bill. Mr. Doug Busselman, Nevada Farm Bureau, stated as he originally read the bill he did not think it would apply in terms of the regulated facilities. If there would be an expansion to cover the areas of underground storage tanks, etc., they would be in support of the concept of protecting those who do self audits. He noted if the bill were expanded beyond the regulated facilities, the Nevada Farm Bureau would be in support of the bill. Mr. Joe Johnson, Toiyabe Chapter of The Sierra Club, stated the bill was not simple and other groups would be opposed to the bill. Mr. Johnson read from prepared testimony (Exhibit E). The Sierra Club was strongly opposed to the portion of the bill which gave privilege to information. You would be shifting the burden of proof from the prosecution in seeking criminal liability or in the case of Tort challenges you would have to prove the information gathered was not included which would further cloud enforcement in the environmental areas. Mr. Bennett said he would think the Sierra Club would like to have someone move onto a piece of property which in the past 100 years had damage done to it and be willing to clean it up. Mr. Johnson said he had no intent to criminalize the activity. The problem with the bill as written, if there were criminal activity, this bill would cloud the ability to prosecute. Generally there would not be any criminal activity, but if there was it would make it more difficult to prosecute. Sierra Club was not opposed to the language in the bill which exempts penalties. The privilege of information which backs up the audit was the concern of the Sierra Club. They opposed the bill in the broadest sense. Mr. Bennett said subject to less fine did not satisfy him. If a property was bought, came onto it, discovered it, willing to remediate, there should be no litigation at all. Mr. Johnson said he would not object to that interpretation of fines. Mr. Bache asked if A.B. 591 could amend or blunt the effect of the chemical catastrophe act which was adopted in 1991 and amended in 1993. Mr. Johnson said he was sure they would hear other people make the interpretation, he felt it would. Mrs. Ohrenschall asked Mr. Johnson if he had an objection to the privilege because it would prevent criminal prosecution. She asked him to look at page 1, lines 16 through 21, and asked if it did not cover his concern. Mr. Johnson did not think it did, he considered fraudulent other than a criminal action. He discussed the problem of audits and disclosure. Mrs. Ohrenschall also directed Mr. Johnson to page 2, lines 13 - 19, and asked if he did not believe it was covered. She said she felt both of the sections covered what Mr. Johnson was concerned with. Mr. Johnson said they attempted to address the issue but they were clouded. Mrs. Segerblom asked who would check on the owner, if the audit was done by the owner or the operator. Mr. Johnson said legislation which granted this kind of privilege was not always upheld by the courts. Good public policy would be to encourage people to come forward to clean up not to penalize them. The civil liability was not addressed in the bill and was the primary purpose for the bill. Mr. Fettic said the bill would be to help protect people from the EPA. He agreed with Mrs. Ohrenschall regarding liability. Mr. Fettic said the bill did exactly what Mr. Johnson wanted, to encourage people to do their audit, clean up, and if done correctly the EPA would not become involved. Mr. Johnson said his question was why have privilege, why keep the report secret. Mrs. Ohrenschall said the reason for the privilege was in English common law, in the area of Torts it has been a long- standing policy, we want to encourage people to remedy any dangerous situation. The policy was trying to encourage people to feel free to make the remedy. The civil liability was covered on page 2, section 7, line 24, the presumption against liability for a civil penalty,..........would take care of the civil liability. Mr. Humke noted section 8 was the essence of the bill. He asked if this did not provide for the philosophy of DEP which provided for compliance, whether by education or as a last resort enforcement. Mr. Johnson said the issue was the problem with the net effects this privilege would grant in other areas, product liability, for instance. The bill as crafted was a very narrow bill and addressed those areas of highly hazardous materials. It shifted the burden of proof and made it more difficult to process in areas and it was the reason for the privilege. Environmental audits from major companies were standard practice, insurers saw they were done. Mr. Humke asked if an environmental audit could constitute or lead to the protection of a trade secret. He answered in the affirmative, but said except for the information which would disclose a trade secret. Mr. Bennett said Mr. Johnson had indicated the bill would shift the burden of proof. Mr. Johnson said if the division came in and found a violation and their information was there, in this bill one would have to prove they did not get the information from the environmental audit. The rebuttal would be, one could not use the information because it was discovered in the audit and one would have to prove the information was not discovered in the audit. Mr. Bennett asked who the burden of proof was on presently. Mr. Johnson said the burden of proof was on the EPA for the violation, but the information would require them to go to court first to declare the information they were using did not arise in the audit. Mr. Johnson said it was what the bill contends and what the purpose of the bill was. Mr. Carpenter appointed a subcommittee with Mr. Carpenter, Chairman, Mrs. Ohrenschall, Mr. Bennett and Mr. Bache. ASSEMBLY BILL 549 - Requires certain documents containing results of assay to include warning concerning use of results. Assemblyman Lynn Hettrick, District 39, testified and noted there were some amendments which had come to his attention. He gave an overview of the bill and what they were trying to accomplish. What the bill relates would be for assayers to print on an assay report the description on lines 9 - 14, page 1, section 1 of A.B. 549, which said, "the person who sees this assay in an attempt to sell a piece of property should obtain assay results on samples he collects from the piece of property." "Don't just trust this assay report." This came about from a constituent in Douglas County who said they had a problem with people using inappropriate assays for whatever reason to try and sell mining property in the state of Nevada. A great deal of work was done in the interim including flying to Winnemucca to the assayers' convention to get their input. Mr. Hettrick was informed of a prospectus delivered to the Division of Mines in which an assay report from the University of Nevada showed a real gold mine beyond reason. The University felt confident their assay was a true result of testing. Mr. Hettrick did not doubt their results, however, he informed them they did not pick up their own samples. That was why they felt it was important to put the disclaimer on the assay results. They printed the disclaimer on the results and sent it to the person who bought the assay and were willing to do so. He did not see why an honest lab has a problem with printing this kind of disclaimer on an assay. It would appear to be a simple request and one can not protect a person from himself. An individual could read this and decide not to get another assay. Mr. Humke asked Mr. Hettrick why the bill included subsection 3 of section 1, page 1, lines 24 and 25. Mr. Hettrick said the basis for this was they may be mailed across counties and may appear in one county from another, first. Secondly many district attorney's choose not to do these when their budget has been totally used up trying to enforce criminal type issues. If a scam was being pursued the attorney general would be more apt to go after them. This disclaimer would not have to be printed on internal assays or anything which was not for commercial purpose. Mr. Carpenter named Mr. Neighbors as chairman of a sub committee and Mrs. Segerblom, Mr. Humke and Mr. Sandoval as members. Mr. Russ Fields, Administrator, Nevada Division of Minerals spoke in support of A.B. 549, from prepared testimony, (Exhibit F). Mrs. Segerblom asked if this would come under the Consumer Advocate Department. Mr. Fields said it would not come under any agency of state government because there were no regulations or enforcement responsibilities or fees which would come to any agency. The only interaction would be with the attorney general in the event there would be cause for violation of the law. Mr. Mark Lewis, Manager of Legend Inc., an assay laboratory in Reno, Nevada, spoke in opposition to the bill. He said assayers do not sell or promote property and do not represent the value of a property. Assayers only generate analysis. The analyses were used by promoters who were mining engineers, geologists or swindlers to sell their properties. They may or may not include copies of the analysis in their promotional materials. The bill did place a significant burden on the analyst. To protect the lab the statement would have to be put on every page of every document that was sent out. This could amount to hundreds of pages on large groups of assays which would amount to thousands of analyses. This would be a substantial burden to place on the assay community. The printed report was not the most common way of dispersing this information. Much of the data was put on company bulletin boards, sent out on diskettes, or work sheet type files, sent by fax. It would be difficult if not impossible for people looking at the data on a computer screen to be privileged to the disclaimer. Therefore the assay laboratory might be in violation by simply not having this statement on every conceivable way they can disperse the assay data. A great deal of the assay data would be given out over the phones in a verbal fashion. All assayers were in the business of assaying, the people promoting the properties were not. Perhaps by excluding them you would be excluding the people actually promoting the swindles from having to fall under its guidelines. Many mining companies have grubstake agreements with people or do assays for each other. Trying to exclude certain people from being in the business of assaying who do assaying, would be inviting a very difficult situation. His main concern would be in trying to follow the letter of the bill if it were made into law. Mrs. Segerblom asked if they do assays on minerals where they would not know where they came from. Mr. Lewis agreed and said they do not claim to represent where they came from. Mr. Bennett felt there would be a way to work out not having it on each page and still cover the assayer. Mr. Bache said he thought the bill was too broad and would not cover the large mining industries. He asked if it was to focus in on wildcat operations and was that the intent. Mr. Lewis said the intent did not deal with the legitimate commercial assayers. The swindling taking place did not include reports from legitimate assay operations. The UNLV operation was rare and not typical. Typically the swindling operations have their own assay laboratories or make the numbers up. Mr. Neighbors did not see how it would be a problem to stamp the pages. He thought the assay companies would welcome a bill such as this. Mr. Richard Grondin, Barringer Laboratories Inc., testified from a letter written by Robert Walker the CEO of the company (Exhibit G), in opposition to the bill. Mr. Bennett informed Mr. Grondin the businesses listed would likely have some form of disclosure. He felt most had disclaimers on most areas of analytical processes. Mr. Grondin said Barringer Laboratories was also an environmental facility and the bill would effect the minerals divisions but not the environmental division. They assay a great amount of geological material but also assay a fair amount of other material also. Mr. Richard Davis, who had a degree in petroleum engineering from the University of Southern California, had been involved in mining activities for the last twenty years. He noted some of the suggestions Mr. Fields had made improved the bill. He wondered if it would increase costs to the small miner if the assayers would have to perform extra activities. Mr. Davis made some analogies regarding the changes Mr. Fields had mentioned. Mining was so complicated unless a person knows what they were doing they should not get involved in it. He was for the improvements in the bill but he did not think the bill would accomplish the purpose. A letter was submitted to the committee for the record in opposition to the bill from Cone Geochemical Inc., from Steve Cone, President and General Manager (Exhibit H). Mr. Neighbors said he could not see in the bill where the labs or their expertise were being challenged. He did not see where it said the labs of Nevada were not doing a good job. It only builds in some protection for people coming into Nevada who were green. Mr. Carpenter closed the hearing on A.B. 549. ASSEMBLY BILL 449 - Revises provisions governing recycling programs of counties. Mr. John Pappageorge representing Silver City and Reno Disposal Companies said A.B. 449 was a bill submitted by Assemblyman Hettrick to solve a problem in Douglas County regarding curbside recycling. The amended language would raise the population figure from 40 thousand to 100 thousand which exempts those counties from mandatory curbside recycling. This would be the meat of the amendment. Mr. Pappageorge had met with DEP and other disposal companies and had not found anyone in opposition to the bill and the amendments (Exhibit I). Mr. Charlie Joerg, representing Douglas Disposal, the franchisee for Douglas County stated they were in agreement with the amended language. The Douglas County District Attorney's office who originally brought the issue to the table was in agreement also. Mr. Pappageorge agreed as he had talked with the District Attorney's office in Douglas County this morning and he affirmed his agreement with the amendment. Mr. Bennett asked if Washoe County was also in agreement. Mr. Pappageorge said it would not affect Washoe County, the population was 100 thousand. Reno Disposal that provides the mandatory curbside recycling has a contract with Washoe County, City of Reno and City of Sparks and other entities in the county, was in agreement with the language. However, this makes no difference in a county of a population of 100 thousand or more. Mr. Bache asked if the bill and amendments would effect Elko County. Mr. Pappageorge said Elko County was at the meeting to speak to the bill. He said in a positive way it would affect Elko County. Ms. Stephanie Licht, representing Elko County, had checked with her county authorities. The 100 thousand population was agreeable to the Elko County Commissioners as it would not affect Elko at this time. ASSEMBLYMAN OHRENSCHALL MOVED TO AMEND AND DO PASS A.B. 449. ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION. THE MOTION PASSED UNANIMOUSLY BY THOSE PRESENT. (ASSEMBLYMEN FETTIC, HUMKE AND DE BRAGA WERE ABSENT AT THE TIME OF THE VOTE.) Chairman Carpenter requested the persons working on amendments to please bring the findings to the committee. Mr. Bache reported on the phosphate bill and Mr. Sandoval was asked about the sub committee on demerits. One other bill on State Lands was in a sub committee also. The meeting was adjourned at 3:30 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 17, 1995 Page