MINUTES OF THE SENATE COMMITTEE ON NATURAL RESOURCES Sixty-eighth Session March 27, 1995 The Senate Committee on Natural Resources was called to order by Chairman Dean A. Rhoads, at 2:05 p.m., on Monday, March 27, 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 STAFF MEMBERS PRESENT: Fred Welden, Chief Deputy Research Analyst, Legislative Counsel Bureau Billie Brinkman, Committee Secretary OTHERS PRESENT: Larry Stout, Assistant Chief, Registration Division, Department of Motor Vehicles and Public Safety Jim Parsons, Program Manager, Environmental Management Specialist, Department of Motor Vehicles and Public Safety David B. Rowles, Director of Administrative Services, Clark County Health District Michael H. Naylor, P.E., Director, Air Pollution Control Division, Clark County Health District Brian L. Jennison, PH.D., Director, Air Quality Management Division, Washoe County District Health Department Irene Porter, Lobbyist, Southern Nevada Home Builders Association Terry Barber, Lobbyist, Southern Nevada Home Builders Association Jim Wadhams, Lobbyist, Nevada Association of Industrial Office Parks Jeff Harris, Clark County, Department of Comprehensive Planning Peter D. Krueger, Lobbyist, Nevada Petroleum Marketers Association Ray Bacon, Lobbyist, Executive Director, Nevada Manufacturers Association Gaylyn Spriggs, Lobbyist, Rayrock Mines Doug Busselman, Executive Vice President, Nevada Farm Bureau Federation John D. Madole, Lobbyist, Associated General Contractors Janet Frasier Rogers, Chairman, Colorado River Commission Gerald L. Edwards, P.E., Chief Engineer, Colorado River Commission David Lutrell, Consultant, Resource Planning, Inc., Scottsdale, Arizona Doug Beatty, Acting Deputy Director and Chief Accountant, Colorado River Commission Chairman Rhoads opened the hearing on Senate Bill (S.B.) 173. SENATE BILL 173: Revises provisions governing evidence of compliance with emission control programs. Larry Stout, Assistant Chief, Registration Division, Department of Motor Vehicles and Public Safety, and Jim Parsons, Program Manager, Environmental Management Specialist, Department of Motor Vehicles and Public Safety, came forward to testify in support of S.B. 173. Mr. Stout explained the measure was requested by the Department of Motor Vehicles and Public Safety as a "clean-up" bill. He said the Federal Clean Air Act of 1991 mandated some changes in Nevada laws and pursuant to the Clean Air Act, the Environmental Commission adopted regulations effecting the programs in Washoe and Clark Counties. The new regulations in S.B. 173 have been adopted by the Environmental Commission which is referenced as authority throughout S.B. 173. There being no further testimony on this measure, Chairman Rhoads closed the hearing on S.B. 173, and opened the hearing on Senate Bill (S.B.) 247. SENATE BILL 247: Authorizes local air pollution control agency to establish program to reduce and control air pollution. David B. Rowles, Director of Administrative Services, Clark County Health District, and Michael H. Naylor, P.E., Director, Air Pollution Control Division, Clark County Health District, came forward to talk on S.B. 247. Mr. Rowles, said for the record, he and Mr. Naylor were before the committee representing Dr. Otto Ravenhole, the chief health officer and the Clark County District Board of Health. He explained that as the result of a conversation with the Southern Nevada Home Builders Association, the consensus derived was that Nevada Revised Statutes (NRS) 445 needed some clarification regarding the Clark County Health Districts Air Pollution Control Authority as it pertains to mitigating carbon monoxide and the ability to develop programs to reduce dust which is called PM10 (dust problems). Mr. Rowles indicated the language in S.B. 247 is proposed through a resolution developed by the officials of Clark County District Board of Health which is representative of Clark County, and cities of Las Vegas, North Las Vegas, Boulder City and Henderson. He said the proposed measure is also supported by the Washoe County Health District, the Southern Nevada Home Builders Association, and the Nevada Division of Environmental Protection. He pointed out that discussions have been held with the Nevada Taxpayers Association as well, who indicate they also support the measure. Mr. Naylor then described briefly the contents of a letter (Exhibit C) which had been sent by FAX to committee members prior to the meeting. Mr. Naylor told the committee the Clark County area has been successful in reducing the overall levels of inhalational particulate (dust) matter and carbon monoxide in the Las Vegas Valley. A system of credits or emission reduction fees has been proposed in amendments to S.B. 247. Mr. Naylor said the offset fees collected by the board of health, are transferred to the local public works departments covering the municipality from which the funds were collected. And, he added, that money is earmarked for the paving of unpaved roads. As an example, Mr. Naylor told the committee that in 1994, $450,000 was collected from all the new industrial facilities in offset payments. That money was distributed to the four municipalities in the Las Vegas Valley and is being applied by respective public works departments to paving unpaved roads. Mr. Naylor indicated that program has been underway for more than 10 years, however they are seeking clarifications to the NRS to clarify they have the authority to continue the program. He pointed out language for an amendment will be forthcoming to coincide with the information in Exhibit C. He drew the committee's attention to Table 1 and Table 2 at the very back of Exhibit C and explained the meaning of each. Mr. Naylor said the focus of the fees is to target the traffic on unpaved roads. He explained one vehicle traveling 1 mile on an unpaved road generates over 1 pound of dust; versus a vehicle traveling 1 mile on a paved road generates one-thousandth of that amount. Therefore, the ultimate goal is to convert unpaved roads into paved roads according to Table 2 of Exhibit C. Mr. Naylor walked the committee through the amendments proposed by the Clark County Health District: Page 2, line 19, insert a third paragraph "(c) expended in a hydrographic basic from which the fees are generated." Page 2, line 18, delete [including, without limitation.] and add "unpaved" before the word "roads." Page 2, line 48, delete [(b) The federal act.] Senator McGinness referred to page 2, line 1, and asked Mr. Naylor for his interpretation of "another source" in that language. Mr. Naylor replied that an existing gasoline station or an existing asphalt batch plant, or some kind of manufacturing facility, which have done something to reduce the emissions or have met a regulatory requirement by which they are entitled to credits, would be a permitted source. He added the word "permitted" is presumed and the "other" sources are permitted sources regulated by the local board of health. Senator McGinness further inquired how the credits are obtained. Mr. Naylor referred to the language on page 1, line 11, pointing out it defines how the credits are awarded. Chairman Rhoads invited Brian L. Jennison, Ph.D., Director, Air Quality Management Division, Washoe County District Health Department, forward for remarks on S.B. 247. Mr. Jennison spoke in support of the measure. He added that Washoe County does not currently have an offset program in place, however, if it is granted to Clark County, they would like the Legislature to grant Washoe County the same program. In the interest of time, the following persons came forward in a group in support of S.B. 247: Irene Porter, Lobbyist, Executive Director, Southern Nevada Home Builders Association; Terri Barber, Lobbyist, Southern Nevada Home Builders Association; and Jim Wadhams, Lobbyist, Nevada Association of Industrial Office Parks. Ms. Porter explained that a typical subdivider currently does dust control measurements extensively on their respective projects. They pay an air pollution permit fee at the time the project is permitted and all the roads leading to and within the project are already paved. The fee outlined in S.B. 247 is an additional fee which would benefit the community as a whole by helping to raise the money to take care of other unimproved roads within Clark County. Mr. Wadhams added the commercial developers concur with the testimony provided by Ms. Porter. All entities concurred with the amendments proposed by Mr. Naylor. Senator Adler inquired if the language in S.B. 247 applies to counties of 100,000 or more population. Chairman Rhoads said this particular language applies to all counties, but that the measure may be amended to include only the larger populated areas. Senator Adler also queried how the money is collected. Ms. Porter replied the fee is paid when a builder secures a building permit. Additional conversation concerning payment of fees continued between Senator Adler and Ms. Porter. And it was pointed out the language in S.B. 247 is so worded that a smaller populated county would not have to engage the offset fees if that was the desire. Jeff Harris, Clark County, Department of Comprehensive Planning, came forward in support of S.B. 247 with the amendments proposed by Mr. Naylor. He said the Board of Commissioners for Clark County, as the designated lead air quality planning agency for the non-attainment area within the Las Vegas Valley, has delegated the responsibility of preparing air quality plans to the Department of Comprehensive Planning. Chairman Rhoads asked Mr. Naylor to come forward again in order to reply to questions by Senator James. Senator James asked if there is a net benefit to the air quality through the proposed program under discussion. Mr. Naylor replied in the affirmative particularly with the new industrial sources. For every ton of emission an industrial source releases, they are required to have 2 tons of credit, creating a net 1-ton reduction. Senator James asked if this is an actual credit or is it a tax. Mr. Naylor said there is a net gain to the air quality. He said the whole purpose of this measure is to prevent the air quality in the Las Vegas Valley from deteriorating any further. He pointed out the goal is to clean up the air in the Las Vegas area and at the same time to not hamper development in the Las Vegas Valley. Through further questioning by Senator James. Mr. Naylor said S.B. 247 does not "give a license to pollute." He said that there have always been performance standards, but with this measure Clark County would have the authority to have a mitigation fee in order to reduce the effect of the dust emissions. Senator James said the mitigation fee is "just a tax." Mr. Naylor said they preferred to think of it as a "mitigation fee." Senator James inquired if this fee would be used for just paving of unpaved roads, to which Mr. Naylor answered in the affirmative. Mr. Naylor said the choice of having a paved road is up to the home owner. That paving is not mandatory. Senator James inquired of Ms. Porter why the home builders are excited about this measure when it appears to be a tax on them. Ms. Porter replied they feel enabling legislation is necessary for an offset mitigation fee. She added, "sometimes one has to do things because they feel it is the best thing to do." And she said it is necessary for everyone's benefit to get the PM10 under control so that cooperation with the Clark County Board of Health was the best way to go. Senator James reiterated this was actually a tax which would filter down to the "little" home owner. Senator Adler said the "flip side" is the damage done to homes and cars from the fine dust of unpaved roads blowing through a subdivision. He said that damage vastly exceeds the proposed fees. Mr. Rowles stepped forward to remind the committee the proposed fee is only $45 per acre which, if distributed among new home owners, would probably be less than $10 a person and it is a one-time fee. He said they are also under some mandates by the Environmental Protection Act to reduce the dust problem and they feel this kind of contribution would be the best solution to do that. Ms. Porter came forward again to provide further discussion on the need for S.B. 247. Peter D. Krueger, Lobbyist, Nevada Petroleum Marketers Association, came forward to discuss some of the language in S.B. 247 which is of concern to his association. He suggested a sunsetting clause while the concept is being tried. Ray Bacon, Lobbyist, Executive Director, Nevada Manufacturers Association, reiterated the remarks made by Mr. Krueger. And he told the committee his association is concerned about the absence of a population cap. Gaylyn Spriggs, Lobbyist, Rayrock Mines, testified she has no opposition to S.B. 247 if it applies only to Clark County. She feels the rural counties could not afford this type legislation. Doug Busselman, Executive Vice President, Nevada Farm Bureau Federation, told the committee he would like to see a list of industries that would be affected by this measure as there might be a problem with agriculture operations, as that industry does create dust. He also would like to see a population cap applied to the legislation so that the ones who have come forward and expressed a need for the legislation would be the ones that are covered. Chairman Rhoads requested that Mr. Naylor provide the committee with a list of industries that would be affected by S.B. 247. Mr. Naylor said there is a legal definition in the NRS of "stationary source" which includes dry cleaners and manufacturing facilities. He pointed out agricultural operations are not a stationary source and are not regulated by the air pollution programs. Chairman Rhoads asked Fred Welden, Chief Deputy Research Analyst, Legislative Counsel Bureau, to expand on the definition of "stationary source" for the committee. Senator Adler inquired if a mining operation is a "stationary source." Mr. Naylor answered in the affirmative. John Madole, Lobbyist, Nevada Chapter, Associated General Contractors, rose in opposition to S.B. 247. He said it would add more cost to doing business. There being no further testimony on S.B. 247, Chairman Rhoads closed the hearing on that measure. Senator Adler asked for committee introduction of Bill Draft Request (BDR) 50-1303. BILL DRAFT REQUEST 50-1303: Requires spaying or neutering of certain animals adopted from shelters. SENATOR LEE MOVED FOR COMMITTEE INTRODUCTION OF BDR 50- 1303. SENATOR ADLER SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JACOBSEN WAS ABSENT FOR THE VOTE.) **** Chairman Rhoads opened the Informational Hearing of Background and Current Issues of the Colorado River Commission (CRC). Janet Frasier Rogers, Chairman, Colorado River Commission, came forward to give a presentation. She opened by thanking the committee for entertaining the proposal which she was going to present. She told the committee the CRC was reconstituted during the last legislative session. They now have seven commissioners, three appointed by the Governor, three elected officials and herself. She explained the responsibilities of the CRC entail water, power and to a lesser degree, land. Ms. Rogers started with water. She said the CRC is charged, by the Legislature, to manage and hold in trust for the people of the state of Nevada, the water of the Colorado River and its tributaries. She continued with history of the Colorado River, saying the seven states on the Colorado River in 1922 were told to attempt to divide up the water of the river. So it was agreed to divide up the water in half at Parker, Arizona. The upper basin states of Colorado, New Mexico, Wyoming and Utah would have 7.5 million acre feet, and the lower basin states of Arizona, California and Nevada would have 7.5 million acre feet, and Mexico would be entitled to a .5 million acre feet and that each basin should decide how the waters were to be divided in the respective basins. Ms. Rogers continued the history, telling the committee that in 1928, an upper basin commission was formed and they settled on the division of that water. So, the federal government told the lower basin that if they wanted the Hoover Dam built, they would divide the water. With the Boulder Canyon Project Act, the water was divided. As a result of that division, California got 4.4 million acre feet; Arizona got 2.8 million acre feet; and Nevada got 300,000 acre feet. She said the arguing of the states continued and it finally ended up in court. Finally in 1964, a Supreme Court decision was handed down on the "Law of the River." The three documents, the Colorado River compact in 1922, a Federal Act in 1928, and the Supreme Court decision in 1964, all taken together form the "Law of the River." Ms. Rogers explained the contents of the "Law of the River" and provided further discussion on the history of the CRC and ultimately told the committee southern Nevada is out of water. Ms. Rogers told the committee that in 1993, the CRC held the Southern Nevada Water Summit and invited anyone to that summit that had an idea of how to bring new sources of water to southern Nevada. The information from that summit has been compiled in a 3-ring binder (Exhibit D. The original is on file in the Research Library.) which Ms. Rogers referred to as the "blue book." She expounded on the first section entitled "Southern Nevada Water Summit." Ms. Rogers said the review team had come to the conclusion that Colorado River management and conservation were essential in order to get as much water as possible via conservation, and also to inform the sister states that the CRC was very serious about water and to let the federal government know that the commission was not "squanderers of water." Since the water summit, the CRC has been concentrating on three forms on behalf of water conservation in working with the Southern Nevada Water Authority. The three forms include: 1) the 7/10 process which is an ongoing set of meetings and negotiations with the seven Colorado River states and the 10 tribes who are members of the lower Colorado River partnership; 2) negotiating with the state of Utah concerning obtaining Virgin River water; and 3) negotiating with states for possible sales and marketing of water. She said the recent negotiations are being conducted within a technical committee which consists of representatives of each of the 7/10 entities who have been trying to set aside state differences and come to a conclusion which could work for everyone. Ms. Rogers introduced Gerald Edwards, P.E., Chief Engineer, Colorado River Commission. As a member of the technical committee, Mr. Edwards said the task of the technical committee is to develop some consensus for a solution. And he recapped the information previously presented by Ms. Rogers. Ms. Rogers directed the committee to the Progress Reports filed in Exhibit D in summary of the activities of the technical committee. Upon questioning by Senator Adler, Ms. Rogers discussed the water rights entitlement by the (Indian) tribes. Ms. Rogers again returned to Exhibit D for further discussion. Ms. Rogers continued, saying the commission has learned, as a result of the summit, that the technical types function on a basis "if it doesn't hurt me and it helps you, I should not object to it." She said they have learned the solution has to be a three-part answer: 1) southern Nevada needs about 100,000 acre feet of water, cheap; 2) the commission is committed to a forum so that important elements are continually in the conversation; and 3) out-of-state marketing of water. Ms. Rogers reiterated the first challenge of the CRC is flexibility in the "Law of the River" and she pointed out the second challenge is in the arena of the endangered species. She explained briefly the CRC sits on a steering committee for the Endangered Species Act. She said a biological assessment issued by the Federal Fish and Wildlife Service and Department of Interior has identified 47 candidate species for the Colorado River. Ms. Rogers said the CRC believes this will be a large problem for the Colorado River and will need to be addressed in the future. She pointed out there is a steering committee which will address these problems. It is made up of representatives from each of the seven Colorado River states, the tribes, the U. S. Fish and Wildlife and Natural Resources, the Bureau of Reclamation, and the Nevada Fish and Wildlife Service. Ms. Rogers told the committee of further plans by the CRC. Chairman Rhoads inquired who is taking the lead in directing the steering committee. To which Ms. Rogers replied generally the U. S. Fish and Wildlife because they have announced there will be a change in the operations of the Colorado River. Chairman Rhoads spoke of his concern with the various state departments and natural resources participating in a steering committee because some of the "natural resources state agencies are almost worse than the federal agency as far as coming up with endangered species." Ms. Rogers said the CRC has committed nothing at this point. They are a member of the steering committee in order to stay on top of what the actions are. Ms. Rogers said another concern is the flow of the (Colorado) River. And she expounded on publications she was reading concerning the river and what is being suggested for its future by other states. Ms. Rogers said the CRC takes power from Hoover Dam, Parker Dam, Davis Dam and Glen Canyon Dam. She declared they took an average from Hoover Dam in 1991 of 11.7 trillion kilowatt hours, and with that she introduced David Lutrell, Consultant, Resource Planning, Inc., Scottsdale, AZ, who gave an overview of the CRC's power function. Mr. Lutrell said CRC's primary power responsibility is to receive, protect and distribute the state of Nevada's allocation of federal power and transmission service. He told the committee that the CRC is the state agency that holds the contract with the federal government for hydroelectric power from the Colorado River. He continued summarizing concerns connected to the hydroelectric power, the time, attention and protection given to that resource. Doug Beatty, Acting Deputy Director and Chief Accountant, Colorado River Commission, called the committee's attention to Organization Charts in Exhibit D and explained the structure thereof. Ms. Rogers talked further on subjects covered in Exhibit D. She concluded the presentation by telling the committee the CRC is proud of their past and enthusiastic about the future, and would answer any questions from the committee. Chairman Rhoads inquired what the percentage population growth had been since 1928 when southern Nevada boasted 90,000 population, and is Nevada getting its fair share of water at this time, population-wise. Ms. Rogers said her understanding was that Nevada got more water at the original time of distribution than the population indicated. She said she believed there were 5,000 acres in southern Nevada that could be profitably irrigated, also, she stated, "why would anyone move to the desert." Senator Regan inquired about affordable housing in Laughlin. Ms. Rogers said the CRC does not deal with growth as an issue. Mr. Beatty said the boom has slowed considerably in Laughlin as there is no water for development at this time. Senator Jacobsen remarked there seems to be a lot of credence given to environmental concerns. He asked if there was a manner in which to equate the cost down to the ratepayer and what about having to share with environmental concerns, even though they are lesser in numbers, but louder in voice. Ms. Rogers said Nevada is more sensitive to the environmental concerns than the sister states. And she said the CRC has reminded the fish and wildlife agencies they do not have the strength that they once had. Senator James took the opportunity to inform the committee that he had followed the Colorado River and the process of the CRC and he commended Ms. Rogers for her leadership and for taking the agency forward and "stirring the waters." He said he had seen other states having to react and has called in the question that the "Law of the River" is not inviolate, and for that reason he thinks the CRC is a great benefit to Nevada and its future. And he said the actions which have taken the CRC forward have been done in a diplomatic way. He told Ms. Rogers he appreciated all the work she has done and that he had enjoyed working with her. Senator James commented, " I think it shows success that the commission was constituted last year and that Ms. Rogers is in charge." Ms. Rogers retaliated with a thanks to Senator James and the entire Legislature for all the help given the commission. Senator James indicated his thanks goes through Ms. Rogers to her staff and members of the commission. Chairman Rhoads thanked Ms. Rogers and her staff for an excellent presentation. There being no further remarks or testimony, Chairman Rhoads adjourned the committee meeting at 3:35 p.m. RESPECTFULLY SUBMITTED: Billie Brinkman, Committee Secretary APPROVED BY: Senator Dean A. Rhoads, Chairman DATE: Senate Committee on Natural Resources March 27, 1995 Page