MINUTES OF THE ASSEMBLY COMMITTEE ON NATURAL RESOURCES, AGRICULTURE AND MINING Sixty-eighth Session May 29, 1995 The Committee on Natural Resources, Agriculture and Mining was called to order at 1:30 p.m., on Monday, May 29, 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 Ms. Genie Ohrenschall, Vice Chairman Mr. Douglas Bache Mr. Tom Fettic Mr. P.M. (Roy) Neighbors Mr. Brian Sandoval Mrs. Gene Wines Segerblom COMMITTEE MEMBERS EXCUSED: Mr. David Humke STAFF MEMBERS PRESENT: David S. Ziegler, Senior Research Analyst OTHERS PRESENT: Brian Jennison, Washoe County Health Department Dick Reavis, Nevada Department of Environmental Protection David Rowles, Clark County Health District Michael Naylor, Clark County City Health District Irene Porter, Executive Director, Southern Nevada Homebuilders Association The hearing was opened on Senate Bill 247. SENATE BILL 247 - Authorizes local air pollution control agency in certain counties to establish program to reduce and control air pollution. Mr. David Rowles, Director of Administration, Clark County Health District, introduced Mr. Michael Naylor, Director, Air Pollution Control, Clark County Health District. Mr. Rowles testified in support of S.B. 247. He stated the bill represents a "win-win solution" to a local air pollution control problem in Clark County. It has the unanimous support of the District Board of Health, representing the city commissioners and commissions of Henderson, Boulder City, North Las Vegas, Las Vegas and Clark County. It was emphasized the bill as amended only applies to Clark County. This is accomplished by a population cap. The bill is additionally supported by the Southern Nevada Homebuilders Association, Nevada Manufacturer's Association, Western Petroleum Marketer's Association, Nevada Associated General Contractors and the Nevada Department of Environmental Protection (NDEP). The bill is not opposed by the Nevada Taxpayer's Association or the Sierra Club. S.B. 247 clarifies the authority of the Clark County Health District as an air pollution control agency in two areas. One is the recognition and use of emission reduction credits and the mitigation and control of dust, which is designated by the Environmental Protection Agency (EPA) as PM10. Mr. Rowles stated he also represented taxpayers and citizens for whom dust is a health problem or a nuisance. He explained dust is a frequent source of calls and complaints to air pollution control offices. Mr. Michael Naylor, Director, Air Pollution Control Division, Clark County Health District, discussed the bill. He referred to a May 29, 1995 letter to Chairman de Braga which was submitted for the record (Exhibit C). The purpose of S.B. 247 was to have cleaner air in the Las Vegas valley and yet have growth. New and additional development and construction can be accommodated in resort, commercial and residential sectors with cleaner air being achieved at the same time. This is achieved using emission offsets and emission reduction credits. Referring to (Exhibit C), Page 2, Mr. Naylor noted some of the proposed program had been used for several years. Offset fees collected in 1994 amounted to $450,000 from newly permitted stationary sources. The sources include cement and gravel plants, nonmetallic mineral manufacturing, and chemical plants. Anything fixed with vents or stacks is considered a stationary source. Funds collected were transferred to public works departments and were used to pave dirt roads in neighborhoods with dust problems where the homes are near the roads. Mr. Naylor explained offset fees represent the cost of controlling air pollution and are applied to new industry. Mitigation fees are fees in existing industry. A mitigation fee is being proposed in S.B. 247. The goal is to manage the growth of air pollution in the Las Vegas valley. Mr. Naylor referred the committee to Page 6 of (Exhibit C), Table 1. He stated the key focus of S.B. 247 is to control particulate matter or dust. Referring to Table 1, Mr. Naylor noted there are 24,000 tons per year of particulate matter emissions in the Las Vegas valley. Among the largest categories of dust or particulate matter is the traffic on unpaved roads. It is hoped S.B. 247 will augment a fund which can be used to pave the busier unpaved roads so emissions can be reduced. Referring again to Page 3, (Exhibit C), Mr. Naylor stated there were two ways to accomplish collection of the emission offset fees. The first is purchasing emission offset credits and making an offset fee payment. Gasoline stations have already earned emission offset credits by installing new nozzles which recover the vapors from refueling cars. These credits can be sold to someone seeking to build a new stationary source. The credits are typically worth approximately $15,000. When sold, gas stations can recoup about half the cost of installing new vapor recovery controls. This has been found to be a good way to help finance stricter regulations in the Las Vegas valley. The second means of making an offset fee payment is the proposed cap of $650 per ton of pollution and is distributed to local public works departments for priority paving of the most highly traveled streets and roads in the Las Vegas valley. It is proposed mitigation fees on existing sources be capped at $80 per ton which is considerably under the offset fee cap of $650 per ton. The mitigation fees would also be distributed to local public works departments. It is proposed that forty miles of roads be paved funded in part by property owners, owners of existing permitted sources and owners of newly permitted sources. It was noted property owner participation is voluntary. Mr. Naylor discussed specific costs to homeowners. The Public Works Department would decide which roads would be paved. Higher priority for paving would go to those roads with property owner participation. Property owner benefits were discussed. Homeowner costs were examined. Mr. Naylor noted the Board of Health has tabled a regulation which would assess the mitigation fee to be capped at $80 per ton until July, 1995. The board is waiting for the legislature to clarify their authority before further action is considered on the mitigation fee. If the fee of $80 per ton was adopted and applied it would generate approximately $600,000 yearly. Under existing regulations a good credit system is in place for the volatile organic compounds (VOC). A number of gasoline stations have received credits for installing vapor recovery and have been selling the credits to new industry being built in the area. Assemblyman Fettic, referring to Page 3 of (Exhibit C), asked how the voluntary property owner participation was envisioned to work. Mr. Naylor stated the Public Works Department would poll the homeowners on a given candidate street. If the majority of the homeowners are willing to contribute to the total paving cost, the project will proceed. He stated a homeowner who was a "holdout" would not be penalized, but if there are enough "holdouts" the road would not be paved. Assemblyman Bache asked why the street improvements were not being done through a general improvement district. Mr. Naylor explained an improvement district approach had been tried and works sometimes. The improvement district has the property owners paying all of the cost. Under the proposed arrangement the property owners would pay only about one-fourth of the cost. He emphasized the roads would not be permanently paved. The life span of the roads would be approximately seven years. It was assumed after seven years there would be a greater need for development and more complete paving would be done. Mr. Naylor explained this is not streets, sidewalks and curbs. It is a two inch pavement with no paved shoulder. Assemblyman Neighbors noted there were currently four or five formulas for distribution of gasoline tax to build roads. He asked why the fees were being proposed for something which should be covered by gasoline tax. He also asked why the subdividers did not put the improvements in and pay for them. Mr. Rowles explained this was not a tax but an impact or improvement fee. Other aspects are applied to industry to help defer problems which occur with industry development. This is a way for industry to have modified growth and be part of the solution of the problem in paying for dust mitigation. Mr. Rowles did not have an answer regarding Mr. Neighbors' question on gasoline tax distribution. Assemblyman Segerblom asked for an explanation of an offset credit. Mr. Naylor explained offset credits can be used by new stationary sources to offset emissions. There are VOC credits available for gasoline stations but there are none available for dust. Mrs. Segerblom asked how areas with low populations would be dealt with. Mr. Naylor said county commissioners could designate any road a high priority and it would be paved using mitigation fee funds. Assemblyman Carpenter asked if the Environmental Protection Agency (EPA) had been relaxing emission control rules and if full advantage was being taken of the rule reductions. Mr. Naylor said there has been some backing off. EPA wants its presence identified. Regarding air pollution and dust mitigation, a PM10 attainment problem exists despite the relaxation of EPA regulations. EPA is now looking at finer dust particles than ten microns for regulation. Mr. Rowles clarified S.B. 247 is not responding to an EPA mandate. The Board of Health is trying to find a cost effective way to reduce dust levels and accommodate industrial construction. Chairman de Braga asked if there were many unpaved areas in urban areas. Mr. Naylor said the unpaved roads are developed on a parcel mat development where there are four lots or less or homes a half mile or more away from each other. They are unpaved roads in small subdivisions being developed in the urban areas. The paving requirements are frequently waivered even though developers originally agree to pave. He corrected an earlier statement regarding the seven year life of roads. The initial paving would last approximately seven years. After initial paving it is the public works department responsibility to keep the roads maintained under their maintenance schedule. Chairman de Braga asked how far into a rural area this would extend. Mr. Rowles stated it is cost effective to pave a road if it has 125 trips per day. If only a few houses are served by the road, it would not be cost effective to pave it. It would take eight to ten houses along a road to generate enough daily trips to make paving cost effective. Chairman de Braga asked if the program would cover the entire county. Mr. Rowles stated it was intended to apply to the nonattainment area, which is the greater Las Vegas valley. Assemblyman Bennett, referred to Section 4, regarding the penalty phase of the bill. He noted the language was enabling and penalties up to $10,000 per day could be issued for noncompliance. Mr. Rowles said this was currently in the regulations. Mr. Bennett asked what penalties would be generated. Mr. Rowles said he did not know if there would be more penalties. Enforcement of dust control problems is currently aggressive. He noted the fines of the Air Pollution Control Board can be significant. Mr. Naylor explained if someone failed to pay the offset fee, notice of violation is issued, and the fee is still not paid after thirty to sixty days, an alternate penalty of any amount up to $10,000 per day could be issued. Typically the penalty would be a few hundred dollars and the violator would pay in a short time. They can also lose their operating permit. Theoretically a penalty of up to $10,000 per day could be issued for any violation. Mrs. Segerblom noted she had many applicable areas in her district. She felt it would improve the looks of Las Vegas valley. Mr. Naylor explained the dust accounts for about half of the visible haze problem. The rest is soot and secondary air pollutants. Assemblyman Fettic understood this has been done for ten years. Mr. Rowles stated offset fees and offset payments have been in use for ten years. There has been no mitigation fee in use. Mr. Fettic asked if the bill was formalizing what has been done previously. Mr. Rowles explained it clarifies an aspect brought into question by the Southern Nevada Homebuilders. With their input and cooperation the bill was brought forth with agreement by all parties. He mentioned even though Washoe County was not included in the bill due to the population cap, they have supported the concept. Positive consideration of the bill was requested. Mr. Neighbors explained Parumph was dealing with the same problem. He asked if experimentation with other items besides oil and molybdenum sulphate had been attempted. Mr. Naylor stated public works departments in urban areas prefer paving with two inch asphalt paving. Chemical dust suppression such as magnesium chloride, Choherex, molybdenum sulphate and others have been found to approach paving cost wise annually over a long period of time. Revenue needs were discussed as well as other paving alternatives. Assemblyman Ohrenschall, referring to the proposed fee of $80 per ton, asked per ton of what. Mr. Naylor explained it meant per ton of emissions. He referred to (Exhibit C), Table 2. Initially $40 per ton would probably suffice. Almost 8,000 tons yearly are emitted from construction activity and industry. Ms. Ohrenschall asked if construction was considered an ongoing activity. Mr. Naylor agreed. Chairman de Braga asked if the concern was with road use or with the construction phase. Mr. Rowles replied both were concerns. The more cars traveling on an unpaved road, the more dust is put in the air. Health and visual problems are created. Chairman de Braga stated she did not understand why paving the road was the homeowner's responsibility. Mr. Rowles reminded the committee it was the homeowners responsibility if they desire to have a paved road in front of their home for dust reduction. He discussed the likelihood of increased property values with paving. Ms. Ohrenschall asked if curbs, gutters, sidewalks and streets were placed in subdivisions as part of zoning requirements. Mr. Rowles said in some cases, but not in all. Small subdivisions owned by owner- developers are not required to install the offsite improvements. Mr. Neighbors asked if Clark County funded road construction with gas taxes. Mr. Naylor stated those funds went into the major arterials and east-west section line roads, highways, freeways and beltways. Mr. Rowles explained paving is done on a priority system. If enough money was available, it would be applied to the roads in question. The roads are not of sufficient priority to warrant the use of the gas tax funds. He noted if the bill is passed and signed by the Governor, paving is subject to extensive public hearings by the Clark County Health District. Citizen input is paramount to the health district and the paving would not be an automatic occurrence. Ms. Ohrenschall asked if after sufficient hearing and citizen input to make something mandatory for homeowners who do not now have paved roads. Mr. Naylor said it would not. Ms. Irene Porter, Executive Director, Southern Nevada Homebuilders Association, stated the legislation was the result of a lawsuit filed by Southern Nevada Homebuilders Association. The Homebuilders Association's position is if government does not have the statutory authority to do something, it will be protested by the association or they will sue. The builders in the association are subdividers. Land is subdivided for the purpose of residential and commercial uses. The builders are paying air pollution fees and providing necessary dust controls on the properties. She noted the association member builders put in all curbs, gutters, etc. The roads in question are dirt roads which have come about in the last fifty years in a variety of ways which were discussed. Many areas are parcels which have been split into two or four parcels, creating parcel map subdivisions. These are not true subdivisions in state law and have not put in the necessary offsite improvements having been granted offsite waivers by local governments. Lack of paving in these areas has contributed to dust pollution. Ms. Porter discussed the fines. She noted the fines do not go to help fix unpaved roads or to take care of air pollution control agency. They go to the Clark County School District. She suggested changing the fine distribution so the money could aid in correction of air pollution problems. Ms. Ohrenschall asked what happened to the roads after their seven year projected life. Ms. Porter stated Clark County performed maintenance and repair as needed because the roads are dedicated rights of way. Ms. Ohrenschall asked if the legislature would be giving Clark County an unfunded mandate to find a way to maintain the roads. Ms. Porter stated since the roads are already dedicated rights of way, the mandate exists. Assemblyman Bache noted the fees from air pollution was discussed during the last legislative session by the Clark County School District. Mr. Bennett asked if two inch paving could hold up to construction traffic traveling over the road. Ms. Porter stated she did not think the paving would last long on haul roads. She noted most streets to be paved would not be subject to construction traffic. Ms. Porter suggested also organizing assessment districts. Mr. Brian Jennison, Director of Air Quality, Washoe County District Health Department, testified in favor of S.B. 247. He explained Washoe County does not currently have an offset fee nor is one proposed. Recognizing Clark County has had the fee in place and needs the clarification, Mr. Jennison noted Washoe County may need to deal with dust in the future. He explained approximately ten percent of Washoe County's air pollution was dust from unpaved roads. Reno and Sparks are experiencing much growth in areas where unpaved roads are common. Similar regulation may be adopted in Washoe County at a later time. Mr. Jennison spoke in support of Clark County's needs. Mr. Dick Reavis, Deputy Administrator, Nevada Division of Environmental Protection, explained the division had no objection to an offset fee system. No plans exist at the state level for implementation of a similar program. The hearing was closed on S.B. 247. No action was taken on S.B. 247. Mr. Carpenter reminded the committee of A.B. 470 which dealt with landfills. Opposition to the bill from Reno was discussed. Mr. Carpenter offered a resolution outlined in (Exhibit D). ASSEMBLYMAN CARPENTER MOVED TO SUBSTITUTE THE RESOLUTION IN (EXHIBIT D) FOR A.B. 470. ASSEMBLYMAN NEIGHBORS SECONDED THE MOTION. Mr. Bache asked if Mr. Carpenter was requesting a bill draft request for a resolution or was seeking to amend the bill by replacing it with the resolution. Mr. Carpenter said he thought a bill draft request for a resolution was the plan and have the committee indefinitely postpone A.B. 470. THE MOTION CARRIED UNANIMOUSLY BY THOSE PRESENT. There being no further business to come before the committee, the meeting was adjourned at 2:30 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 29, 1995 Page