MINUTES OF THE SENATE COMMITTEE ON NATURAL RESOURCES Sixty-eighth Session March 22, 1995 The Senate Committee on Natural Resources was called to order by Chairman Dean A. Rhoads, at 1:40 p.m., on Wednesday, March 22, 1995, in Room 224 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator Dean A. Rhoads, Chairman Senator Lawrence E. Jacobsen, Vice Chairman Senator Mark A. James Senator Mike McGinness Senator Ernest E. Adler Senator John B. (Jack) Regan Senator O. C. Lee GUEST LEGISLATORS PRESENT: Assemblyman John Carpenter STAFF MEMBERS PRESENT: Fred Welden, Chief Deputy Research Director, Legislative Counsel Bureau Billie Brinkman, Committee Secretary OTHERS PRESENT: Stephanie Licht, Lobbyist, Elko County Anthony L. Lesperance, Ph.D., Principal, Great Basin Agriculture, Inc. Larry C. Reynolds, Attorney at Law Mike Turnipseed, State Engineer, Division of Water Resources Robert Oser, Water Rights Manager, United States Fish and Wildlife Service Paul A. Rauch, Groundwater Hydrologist, United States Fish and Wildlife Service Dan Pennington, Refuge Manager, Ruby Lake National Wildlife Refuge, United States Fish and Wildlife Service Chairman Rhoads stated this meeting will address the issue of Governmental Water Jurisdiction. He read a letter (Exhibit C) to the committee from R.M. "Jim" Nelson, Forest Supervisor, Forest Service, United States Department of Agriculture. Assemblyman John Carpenter, Assembly District 33, said he would like to address the problems the state of Nevada is experiencing with the federal government, and more particularly the United States Forest Service (USFS), regarding situations that exist in Elko County and other areas of the state. He explained Kelly Springs is a small spring in Ruby Valley, Elko County, which first came to his attention when he saw an article in the newspaper which stated that a rancher in Elko County, John Duval, had been sued in federal court and fined for developing a spring on USFS land. He said the thing that really caught his eye was that the federal court ordered Mr. Duval to cover up the spring. He asserted in Elko County (especially in recent drought years) one does not go around covering up springs, but rather develops them for wildlife, livestock, and outdoor recreation activities. Assemblyman Carpenter stated he spoke with Mr. Duval and verified that he had indeed developed the spring in accordance with a water right he holds. He explained Mr. Duval has a vested water right (defined as usage before 1905, which is the year that the USFS came into existence), and said he feels that it is wrong for the forest ranger in Wells, Nevada, to force Mr. Duval to remove the water development. Assemblyman Carpenter insisted it was a good water development which channeled water to Mr. Duval's private land, approximately 200 feet from the spring. He pointed out Mr. Duval built a trough for deer (since that is an important deer migration area) and his livestock. Assemblyman Carpenter said the forest ranger in Wells sent a memorandum to the district court that Mr. Duval, as part of his sentencing, was to cover up the spring with no less than 1 foot of dirt. Assemblyman Carpenter stated he spoke with a number of hydrologists who confirmed that if 1 foot of dirt is put on the spring it could very well dry it up, or turn it into a mud box. He noted he contacted USFS officials in the Wells office, the supervisor's office in Elko, and the regional forester's office in Ogden, Utah; and got the same story from each of them: "It's in the hands of the court, and we can't do anything about it." He said the court decree states that all of the actions that Mr. Duval is required to do were dictated by the USFS. He told the committee the court could, at any time, have said, "No, you don't have to cover up that spring." He stated Mr. Duval made application to the USFS for a right-of-way, which was denied, and the whole issue was blown up in the Elko [news]papers. Chairman Rhoads asked Assemblyman Carpenter if the USFS gave a reason for its refusal to grant the right-of-way. Assemblyman Carpenter stated they did not. He said Mr. Duval was under a court order to remove the spring and cover it with dirt, and the feelings were running quite high in Elko that this was the wrong thing to do. He related a work party was formed of some 500-1000 people who fenced off the area around the spring. He emphasized the spring was not only fenced, but trees and grass were planted as well. Assemblyman Carpenter maintained it was a first class job, but the court still would not back off and insisted Mr. Duval remove the spring, so, rather than go to jail, Mr. Duval removed the spring box, but by the next afternoon someone went up and put in another one. He stated it remains that way to date. Assemblyman Carpenter said his main concern is the attitude of the USFS in denying Mr. Duval the right to develop the spring. He explained he researched the situation and found that if one has a vested right, one does not need to obtain a right-of-way from the USFS, and the Legislative Counsel Bureau issued an opinion to that effect. He maintained the mining law of 1866 gave rights-of-way for the transmission of waters across federal land. He stated, because of the importance of water in Elko County and all of Nevada, the county of Elko filed a lawsuit against the USFS asking that this law be upheld. He asserted there are numerous cases claiming the USFS either denied rights- of-way, or erroneously informed people a right-of-way is required. He stated those rights-of-way were given by an act of Congress. Chairman Rhoads asked Assemblyman Carpenter if the USFS gave any reasons for those denials. Assemblyman Carpenter replied the only reason the USFS gives is that they have the authority to do it. He said the right to use the springs and clean the ditches is essential to the ranchers, therefore, Elko County had to file a suit to protect the interests of the people of the state of Nevada. Assemblyman Carpenter said it was his hope that the state would assist Elko County, but when they met with the Governor, the attorney general, and the state engineer, the Governor said he would do everything that he could to help and support them, but the attorney general was of the opinion that she did not want to enter into it. Chairman Rhoads asked Assemblyman Carpenter if the case is currently in district court. Assemblyman Carpenter answered it is in federal court where they are asking for a summary judgment to prevent the USFS from doing this. He said in order to keep the judge from carrying out the court decree against Mr. Duval, the district judge in Elko County granted a stay allowing more time. Senator Regan asked Assemblyman Carpenter if the USFS denied the right-of-way, based on U.S. Code or upon an act. Assemblyman Carpenter replied the USFS stated they have the authority to deny the right-of-way and that they are not going to back off. He pointed out the lawsuit filed by the USFS against Nye County elucidated two rights-of-way which were granted to Nevada by the Congress in the mining law of 1866. He stated they are the perpetual rights-of-way for the transmission of water, and roads that existed prior to the establishment of the USFS. He told the committee the USFS (in that lawsuit) pretty much admitted that Nevada has those rights-of-way for the roads, and he believes the state can carry it over to the water issue which the Legislative Counsel Bureau has substantiated. He said he hopes that the USFS will back off the case in Elko County, after examining all the issues. Chairman Rhoads explained that R. L. Chapman, Chairman, Elko County Commission, was unable to attend the meeting due to weather; therefore, Stephanie Licht, Lobbyist, Elko County, would present Mr. Chapman's prepared testimony (Exhibit D) to the committee. Ms. Licht read Mr. Chapman's statement (Exhibit D) in its entirety. Anthony L. Lesperance, Ph.D., Principal, Great Basin Agriculture, Inc., explained that Great Basin Resource Management, a subsidiary of Great Basin Agriculture, Inc., is a consulting firm operating throughout the west. He said, as such, his firm has been retained by Elko County to assist in preparation of information in this particular matter. He said, to the best of his knowledge, they are also retained in every single litigation by a citizen, or citizens, of the state of Nevada, at this point in time, against the USFS. He testified he believes there are four other major litigations going on at this point in time. He said his written comments (Exhibit E) are fairly extensive and include as much factual information as possible. He made a slide presentation and highlighted his written testimony. Upon the conclusion of the slide presentation Vice Chairman Jacobsen asserted that Dr. Lesperance painted a very vivid picture and asked if he had any suggestions about how the Legislature should proceed to assist [Elko County]. Dr. Lesperance said it seems to him that the laws are on the books already, and a strong level of support from the Legislature may have caused these actions to go away. He stated these actions by the USFS did not just begin this year; the Parsons case began 8 years ago, the Hage case began 6 years ago; and the RO case began 5 years ago. He stated Vice Chairman Jacobsen has cases in his own district which are coming up shortly because the state is not putting forth definitive positions from the attorney general's office, the state water engineer's office, the legislative bodies, or the Governor's office to protect the rights of the people within the state of Nevada. Vice Chairman Jacobsen recommended a day be set aside for the attorney general to appear before the committee so that she can answer for her reluctance to come to the front, since the attorney general is the only source the people have to express their opinions. He said the President and department heads in Washington, D.C., last week, indicated that they are there to help, and welcome the opportunity to come and listen, but said he thinks the Legislature may be somewhat remiss in failing to ask the "top dogs" to come, even to appear at a joint session. Vice Chairman Jacobsen expressed his amazement at the effort Dr. Lesperance put into this issue without any response. He said it may behoove the committee to ask the USFS representatives to come before the committee to explain why they are non- responsive. Chairman Rhoads stated he did ask the USFS to appear, but they refused because of the pending lawsuit. He said he is very disturbed that this is the first time any federal officials have attended a meeting of the Senate Committee on Natural Resources. He explained those present today came from Portland, Oregon, and represent the United States Fish and Wildlife Service (USFWS), which is completely independent of the USFS. He said they came down because there have been some filings in the Ruby Marsh area by the USFWS, and the committee invited them to appear in response to those filings. He maintained, in the past, the Bureau of Land Management (BLM) and USFS representatives attended some of the meetings, but are now reluctant to appear at all. Larry C. Reynolds, Attorney at Law, testified he has been retained by Elko County to assist them in the current litigation involving the county and the USFS. He asked Chairman Rhoads if the committee sees any problem in his testifying in light of the refusal of the USFS to testify. Chairman Rhoads stated he discussed the matter with the Chairman of the Elko County Commission who conveyed they have no problem with it. Mr. Reynolds read from prepared written testimony (Exhibit F) to express his views on the matter. He added that the water law in the state of Nevada has always been administered by the state and the federal government has always acquiesced to the state in the acquisition of water rights since the times of the earliest homestead laws and the desert land entries. He explained the states have their own laws providing for the appropriation and acquisition of water rights. He said that method is not presently favored by some federal agencies, but to overthrow it would create absolute chaos. He insisted it would necessitate a costly duplication of effort by the federal agencies or allow the federal agencies to establish their own system which may render those perpetual water rights irrelevant and unusable. Vice Chairman Jacobsen asked Mr. Reynolds if a vested right is perpetual. He asked, for example, if the water that is here today disappears for some reason tomorrow, but a couple of years later it comes back, does the vested right continue over that period of time? Mr. Reynolds replied the best water right in the world does not make water. He said it does provide the right to use the water if it is available in the source. He stated if the water disappears, then obviously those who have rights to that water do not get any water, but when the water reappears, that right still exists. He concluded one does not lose the right because nature took the water away from them. Vice Chairman Jacobsen asked if animals have a vested right in the water. Mr. Reynolds said that has always been somewhat of a problem, complicated by who owns the wildlife. Chairman Rhoads asked Mr. Reynolds, "Doesn't the state own them?" Mr. Reynolds replied that is his opinion, and that is what case law seems to indicate, but added the state fish and game commission has not seen fit to file claims for the wildlife. He acknowledged in prior adjudications, he has never seen the wildlife denied water because they do not have a water right. He said the amount of water that wildlife consumes is probably impossible to measure and that he is not aware of any problems of that nature. Mike Turnipseed, State Engineer, Division of Water Resources (DWR), told the committee the problem in Ruby Valley is that the DWR has not finished the adjudication, and has only one person working on that adjudication effort. He stated the DWR promised the judge they would have a preliminary order of determination by this spring. He said the DWR has also placed emphasis on the Owyhee River adjudication to keep pace with Idaho's adjudication of the Snake River and to try to negotiate a settlement of the Shoshone Pacts on the Duck Valley Indian Reservation. He said, as a result, it has postponed the Ruby Valley adjudication. Chairman Rhoads asked what beneficial use the USFS and USFWS claim when filing for water rights. Mr. Turnipseed said the USFWS is claiming a pre-statutory right for the springs that feed the Ruby Marsh. He said the USFS has filed about 150 vested rights claims on springs in the forest and about 25 in-stream flow rights, based on a reserve rights claim. He said he cannot tell the committee how the DWR is going to act on those claims, but he can tell them how they have acted historically. He said they have rejected any USFS claims as being vested because the forests were not taken out of the public domain until after 1905, and cannot prove ownership of the livestock prior to that date. He remarked although those claims have been denied, they have been appealed. He said they have an adjudication in Quinn River Valley which is now, and has been, before the court for approximately 8-9 years and he is not sure why it has not been heard. He said the state engineer's office has gone both ways as far as the USFS owning vested rights for livestock watering; they have honored USFS claims for administrative sites, and other usage typically associated with a forest. Chairman Rhoads asked Mr. Turnipseed what the historical perspective is regarding the USFWS. Mr. Turnipseed replied he does not know if the DWR has ever done an adjudication on claims filed by the USFWS. Chairman Rhoads asked Mr. Turnipseed if there are currently any claims filed by the USFWS in the Ruby Valley. Mr. Turnipseed answered in the affirmative. He said the USFWS filed claims on 119 springs, two sloughs and another 40 claims, or so, on other... Chairman Rhoads interrupted, asking "For what beneficial use?" Mr. Turnipseed answered, "Wildlife." Chairman Rhoads asked Mr. Turnipseed if the state owns the wildlife. Mr. Turnipseed said, when the land was taken out of the public domain for the purpose of a wildlife refuge in Ruby Valley, the state recognized reserve rights which may also include Indian or military reservations which have (as a result of various litigation) been set aside for the purposes of those reservations. Chairman Rhoads asked Mr. Turnipseed if there are any current statutes which allow the DWR to protect a water right user when a federal agency fails to permit that user to maintain a vested water right. Mr. Turnipseed replied that area of the law is very difficult. He said he is sworn by oath of office to uphold the laws of the state of Nevada, but said it is difficult to determine where water law ends and real estate law begins. He said the landowner or custodian of the land (in the case of the BLM) has the responsibility to protect land values as opposed to his (Mr. Turnipseed's) responsibility to enforce the water law. He suggested he has no reason to believe the vested rights of Duval are not valid, the DWR has not finished the adjudication and those rights have not been confirmed by the court. He added the right of Duval to go to and from the spring may cross into the scope of real estate law. Chairman Rhoads stated if the right was adjudicated, Duval may have a stronger case. Mr. Turnipseed answered, "Absolutely." Robert Oser, Water Rights Manager, United States Fish and Wildlife Service (USFWS), told the committee one of the objectives of the USFWS is to obtain and protect sufficient quantities of water to fulfill the purpose of the facility whether it be national wildlife refuge or national fish hatchery. He said this is accomplished by complying with state water laws and federal reserve water right doctrines. He stated the USFWS takes great pains to ensure that its managers are knowledgeable about the water rights' doctrines and the administrative process to effect those doctrines. He noted Region 1 of the USFWS conducted a 2-day water law and water rights conference several years ago to ensure that the station managers were educated regarding state water right processes. He said the speakers included the chief water rights counsel for the state of California, and the assistant attorney general on water rights for the state of Oregon. He pointed out the water resource staff of the USFWS maintains close liaison with Mr. Turnipseed's staff and his counterparts in other western states. He concluded all applications filed with the state engineers are in full compliance with state water laws. Paul A. Rauch, Groundwater Hydrologist, USFWS, Region 1, verified the USFWS did file claims in the Ruby Valley adjudication. He said there were four claims filed in 1989, which were lumped together. He said one claim was filed for 119 springs and 2 sloughs which constitutes the majority of water used to supply Ruby Marsh and provide wildlife and other benefits to the marsh. He indicated those claims were filed as vested rights on lands that were acquired outside of the original reservation that set aside Ruby Lake. He maintained they were private lands purchased by the government to augment the Ruby Lake National Wildlife Refuge. He said the USFWS also filed a claim in 1989 which include 39 springs arising on land that was removed from the public domain in the 1930s when the refuge was originally established. He said those claims were filed because there was going to be an adjudication, and there was a general call by the state for claims. He stated another claim was filed for ground water seepage into the marsh which could not be very well quantified, but which is an important component in the overall water budget of the marsh. He pointed out the USFWS's legal advice varies back and forth as to whether there can be a federal reserve claim made on lands that are acquired by the government to augment a refuge. He said, therefore, there was a duplicate federal reserve claim filed for the 119 springs that potentially have a vested right associated with them. He said, depending on the legal opinion at the time when the adjudication is made, the claim may be withdrawn. He suggested it is the understanding of the USFWS that after the claims were filed the adjudication process in Ruby Valley basically came to a halt. He said there is no indication that it will proceed very quickly and the USFWS became concerned because the USFWS has no "paper" water rights for the Ruby Valley National Wildlife Refuge. He said the USFWS refuges typically have some sort of water right on paper and the adjudication simply clarifies the existing right. He stated in April 1994, the USFWS filed additional appropriative applications for the major springs. He explained there are 71 applications currently pending which cover those claims which they feel are the most important sources, including the large springs and the springs that they actively divert. Chairman Rhoads asked Mr. Rauch if those 71 applications are in addition to the others filed in 1989. Mr. Rauch answered in the affirmative, explaining that the USFWS filed those applications as a backup to their adjudication claims. He stated if the adjudication process proceeds and the USFWS is provided with the water requested in their claims, or a reasonable amount of water to operate the refuge, the other applications will become meaningless because they will have an older priority date than what is provided in the adjudication. He pointed out if the USFWS does not prevail in the adjudication on their claims, then those applications will provide them with a 1994 priority date so they will be assured of being able to continue to operate the refuge. He said the pending applications are all for water that arises on and is used for the refuge. He insisted it is not, in any way, an attempt to expand the refuge operations or increase the amount of water use there; it is the intent of the USFWS just to maintain the status quo. Dan Pennington, Refuge Manager, Ruby Lake National Wildlife Refuge, USFWS, stated he knows very little about water law. He said the purpose of the refuge is to provide a breeding ground for migratory birds and other wildlife which was established by executive order in 1938 to establish the Ruby Lake National Wildlife Refuge. He stated the refuge is approximately 37,600 acres, 30,000 of which was purchased from willing sellers. He said the water on the refuge is very important to protect and insure adequate habitat for the 200 species of migratory birds, six species of fish, and many other species which use the refuge. He emphasized the Ruby Lake National Wildlife Refuge does provide stimulation for the local economy since it attracts approximately 70,000 visitors each year for recreational purposes including fishing, hunting, boating, and wildlife observation. He claimed during the drought, it has been a pretty good indication of what the refuge would look like without water. He said the visitor population has dropped 10,000 per year during the drought but he expects that to increase again now that the water levels are rising. Chairman Rhoads asked Mr. Pennington how the water levels are now in the Ruby Marsh. Mr. Pennington stated the water levels are nowhere near normal, but a lot better than 3 years ago, and are getting close to objective levels in most of the units, but two remain dry. Chairman Rhoads read a letter (Exhibit G) from John E. Marvel, Attorney for the Elko County Commission, to Attorney General Frankie Sue Del Papa, dated March 21, 1995. Assemblyman Carpenter said he noticed when the applications filed in the Ruby Marsh area were advertised in the newspaper, he did not see any that were being appropriated for livestock use. He said livestock does use water on the refuge when they are on the federal range adjacent to the refuge, and he thinks that is something that the county needs to look into. VICE CHAIRMAN JACOBSEN MOVED TO HAVE THE COMMITTEE ASK THE ATTORNEY GENERAL TO APPEAR BEFORE IT. Chairman Rhoads asked Mr. Turnipseed what he estimates the cost to be to his department to finish the adjudication in Ruby Valley. Mr. Turnipseed replied the DWR has about 55 adjudications pending. He said one person could have a preliminary order out within about a year, and a final order in 2 years. He said he had submitted a budget to the fiscal analyst to enhance the DWR's staffing by 20 people in order to clear out the backlog of pending and protested applications. Chairman Rhoads asked if that would take care of the Ruby Valley adjudication. Mr. Turnipseed said in their original executive budget request they had one technician for the adjudication effort. Vice Chairman Jacobsen asked Mr. Turnipseed if the DWR has any type of priority status. Mr. Turnipseed replied the Owyhee River drainage is not done and most of the middle of the state is not done. He said the Humboldt River Basin has been adjudicated and the DWR has about 100 other adjudications which are finished, with court decrees. Vice Chairman Jacobsen asked if those adjudications have to be sanctioned by Congress. Mr. Turnipseed replied, "No." He said the process begins with the administration of the application, then goes before the courts where each party presents their case, and this results in a state decree. He stated in some of the issues that are currently unresolved, the DWR is waiting on other states' litigation to become finalized. He said there are four or five points that they felt they had won based on an Oregon Supreme Court decision, but did not prevail on the issue of whether the federal agencies have to pay fees. He said the amount of fees that the DWR could collect were never intended to cover the cost of the adjudication. He said the DWR will now accept federal claims without the benefit of fees. Dr. Lesperance said one of the things which needed to be worked around is the problem of adjudication. He said what the state needs to do is define a method for temporary relief in this process, because if it waits for every area to be adjudicated, the USFS is going to win by default, and that is exactly what they are trying to do. He suggested that is where the counties have to have some help. He said there will be lawsuits filed against the USFS by individuals in many areas which are not adjudicated at this point in time. He stressed if Nevadans cannot get around that they are going to be dead by default; it is just that simple. Senator Regan asked Dr. Lesperance how they are suing the federal government without their permission. Dr. Lesperance answered, "U.S. Court of Claims, on two of them." He added he thinks that is the only logical way to go because each and every one of these is a clear taking, beyond any question. There being no further testimony, Chairman Rhoads adjourned the meeting at 3:30 p.m. RESPECTFULLY SUBMITTED: _________________________________ ________ Linda Chapman, Committee Secretary APPROVED BY: ______________________________________ Senator Dean A. Rhoads, Chairman DATE: ________________ Senate Committee on Natural Resources March 22, 1995 Page