MINUTES OF THE SENATE COMMITTEE ON NATURAL RESOURCES Sixty-eighth Session May 31, 1995 The Senate Committee on Natural Resources was called to order by Chairman Dean A. Rhoads, at 2:10 p.m., on Wednesday, May 31, 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 Mike McGinness Senator Ernest E. Adler Senator John B. (Jack) Regan Senator O. C. Lee COMMITTEE MEMBERS ABSENT: Senator Mark A. James (Excused) STAFF MEMBERS PRESENT: Fred Welden, Chief Deputy Research Analyst, Legislative Counsel Bureau Billie Brinkman, Committee Secretary GUEST LEGISLATORS PRESENT: Assemblyman Joseph E. Dini, Jr., Assembly District No. 38 OTHERS PRESENT: Sam McMullen, Lobbyist, Washoe Regional Water Planning Coalition Michael R. Reed, Director, Governmental Affairs, Sierra Pacific Power Company John B. Hester, Director, Department of Comprehensive Planning, Washoe County William E. Isaeff, Deputy City Manager, City of Sparks Gordon DePaoli, Lobbyist, Sierra Pacific Power Company R. Michael Turnipseed, State Engineer, Division of Water Resources Naomi Duerr, State Water Planner, Division of Water Planning Juanita Cox, Lobbyist, People To Protect America Galen D. Denio, P.E., Commissioner, Public Service Commission Fred Schmidt, Consumer Advocate, Office of Advocate for Customers of Public Utilities, Office of the Attorney General Richard E. Reavis, P.E., Deputy Administrator, Air, Mining and Water Programs, Division of Environmental Protection Barbara Curti, President, Nevada Farm Bureau Stephanie Licht, Secretary/Treasurer, Nevada Wool Growers Association Thom Reilly, Acting Director, Department of Human Resources Pamela B. Wilcox, Administrator, Division of State Lands Chairman Rhoads opened the hearing on Senate Bill (S.B.) 489. SENATE BILL 489: Provides for comprehensive planning and management of water in certain counties. Sam McMullen, Lobbyist, Washoe Regional Water Planning Coalition, informed the committee there will be several witnesses who will fully explain the measure at hand. He called on Michael R. Reed, Director, Governmental Affairs, Sierra Pacific Power Company, to be the first speaker. Mr. McMullen explained S.B. 489 is the product of about 19 months of negotiated agreement between the City of Sparks, City of Reno, Washoe County and Sierra Pacific Power Company. He emphasized that the information before the committee has been reviewed and re-reviewed by all the above mentioned entities and that the information has been commonly agreed to. Mr. Reed said he came to discuss the important implications of S.B. 489 for Washoe County. He opened his remarks by naming the entities involved. And than gave an overview of the first planning steps which had been taken to arrive at a solution for a comprehensive water planning policy for all Washoe County residents. Mr. Reed told the committee that after long and hard discussions by all parties involved, they were able to forge a document which they believe meets the needs of the citizens of the community. Mr. Reed continued his remarks: The agreement reached last fall by Sierra Pacific, Washoe County, Reno and Sparks is embodied in S.B. 489 and includes a number of major provisions, including all aspects of water, including flood control, potable water supplies and water quality, need to be looked at and planned as a system. The public and all interested parties should be allowed to participate fully in the process. Checks and balances should be included in the planning process to ensure that no single entity exercises undue control of the process. Any integrated water resource planning process should be based on sound, technical expertise. The water planning process should benefit the entire region, including private well owners. The process should be efficient and eliminate duplication of effort wherever possible. With these goals in mind, we produced a concept embodied in S.B. 489 which includes a number of major provisions. Transfer of water planning policy to Washoe County with full participation and input by the cities and Sierra Pacific and the public as well. Creation of water planning commission similar to the regional planning commission, which is technically based and responsible for reviewing all water and facility plans. All plans must originate and be reviewed by this commission. It provides for mandatory review and approval of the first integrated plan by all three local governments and then periodic plan updates and conformance review thereafter. It provides a funding mechanism to pay for preparation of plans and construction of necessary capital projects. It eliminates costly competition for scarce water resources in service areas and provides for a single water purveyor system while insuring that water systems which are independent, can remain independent. It maintains the ability of the Public Service Commission to review and oversee Sierra Pacific's water operations and rates. It provides a mechanism for protecting water supplies from contamination, expedites remediation of contaminated water supplies and protects ground water quantity and quality. And finally, but most important, it ensures numerous opportunities for public input into the process. Mr. Reed then called on John B. Hester, Director, Department of Comprehensive Planning, Washoe County, to go through some of the planning aspects and some of the funding mechanisms in S.B. 489. Mr. Hester walked the committee through a prepared colored handout (Exhibit C).(On file in the Research Library.) William E. Isaeff, Deputy City Manager, City of Sparks, informed the committee he has served the past 6 years as water attorney jointly for the cities of Reno and Sparks. He indicated he would review highlights in S.B. 489 with Mr. McMullen explaining proposed amendments as outlined in the document, "Proposed Amendment to Senate Bill No. 489" (Exhibit D) as the measure was being reviewed. Mr. Isaeff commenced his remarks by explaining the various sections of S.B. 489 as Mr. McMullen interjected with proposed amendments from Exhibit D. Mr. McMullen explained he will be working from Exhibit D the majority of the time as S.B. 489 is reviewed. He told the committee of a document, "Proposed Amendment to Section 32 of S.B. 480," [sic] (Exhibit E) which will be discussed later; and drew the committee's attention to another document, "Memorandum of Understanding" (Exhibit G) which will also be referred to at a later time during the testimony. Mr. McMullen, in explaining t h e d e l e t i o n o f s u b s e c t i o n 6 , s e c t i o n 1 1 , l i n e s 7 t h r o u g h 9 , p a g e 4 , t o l d t h e c o m m i t t e e : Not for any lack of interest, but basically to maintain a statement of separation between the federal government and the state government. We have a clear indication from the water master that he will serve voluntarily, so there was no need to put that in law.... Mr. McMullen explained the deletion of subsection 8, section 11, lines 13 and 14, page 4: Basically we were attempting to catch-all any other person that might make this more valuable. I think you should understand that the touchdown of both [sections] 10 and 11 are...both this section and a later section, 18, are pointed at making sure this is the broadest, participative and cooperative effort possible and so we went to the extent of creating nonvoting positions so that these people could actually have a place at the table and participate in input. And a lot of these if you will notice, are in a great part, because of the regulatory responsibilities, not able to cast a vote without jeopardizing their position later.... To add to that, we have actually added two other members, one would be representative of the environmental community, biological interests, et cetera, and would be appointed by the board. Also a representative of well owners, because the well owner participation is of course another set of input and the interest that we need to make sure that we are accommodating and addressing adequately. In summation of this section, Mr. McMullen stated they are not interested in restricting anybody from participating in this project. He said, "We have affirmative obligations to seek out their input and incorporate it, consider it, and address it in the planning process." Mr. Isaeff continued reviewing the sections of S.B. 489 with Mr. McMullen interjecting amendments outlined in Exhibit D. Mr. McMullen pointed out a change in section 16 which is not noted in Exhibit D. He said it is a request from the Nevada Division of Environmental Protection, particularly the water quality division. He explained there is a request to make the language track in section 16, subsection 1 (a) and section 16, subsection 2(a), by adding "compliance with" to the latter subsection. Senator Adler asked for clarification of the words "septic tanks" in section 16, line 23, page 5. Mr. McMullen said in processing the amendments he would make sure the right term is spoken to in that respect. Mr. Isaeff continued with the review of S.B. 489, while Mr. McMullen intervened with statements from Exhibit D. Mr. Isaeff, in reviewing section 21 explained the language in that section is an effort to maintain a considerable amount of check and balance throughout the system. Mr. McMullen expounded on the proposed amendment from Exhibit D, to clarify one portion, and he emphasized: The water planning commission being broadly constituted, is basically a negotiated part of this to make sure there is input from all the governmental entities and all the other parties that have a say on it. But they are going to be technically constituted. There will be people that have the substantial experience to put together a plan. So we want the plan to move and work as a unit. We do not want to allow piecemeal amendments unless those amendments have been resynthesized by the water planning commission into a comprehensive plan, because one piece you might adjust may have some impacts and consequences in another part of the plan. So the theory is to have that happen. And the clear addition that we are making here is that the board sets the policy and sets the direction, the commission will resynthesize that into a plan. It can give its alternatives, but once there is a final decision it has to technically resynthesize that into a plan that makes the most sense and is the smartest use of all the resources and then pass that back up to the board. So it is a very participative process.... Mr. Isaeff informed the committee there are a number of plans within the region referred to and he explained that section 22 is intended to insure that the new water plan will be in conformance with the regional plan and all other plans that exist within the area. Senator Adler questioned the language in section 27, "...board may acquire water rights or other sources of water, within or outside the region...." Mr. McMullen replied the operative aspect of section 27 is to create a water bank. He further stated: If we are going to be planning in multi year continuums, then there may be, in fact, a need for a water resource identified in say, 20 years out, and it may, in fact, be available now. And so this allows a mechanism by which you can acquire that water right, knowing full well that you won't really use it for 15 or 20 years. And you will see a corresponding change to that in terms of beneficial use, so as long as it is in accordance with the plan...it is a confirmation of beneficial use. Senator Adler confirmed water rights can be acquired outside the region according to this particular language. Mr. McMullen agreed to that. But, Mr. McMullen added, there is an amendment outlined in Exhibit D which makes it clear that any of those outside sources have to be accommodated or purchased or acquired only in accordance with the plan. And he reiterated the plan should be a very participative effort. Senator Adler asked the meaning of the language in section 27, "...board may impose a reasonable charge upon a person seeking a commitment from a public utility to provide water, for making water from a source so acquired available for that use." Mr. McMullen explained that is basically bill drafter's language to speak to the issue of "will serve these." He added, if the water bank holds water which will be utilized to serve a development or a project, the project can come to that bank, pay for those rights and those rights can then be used for the development. Senator Adler and Mr. McMullen indulged in further conversation concerning other water besides water rights. Mr. McMullen explained the logical intent of section 27 is that if water is not acquirable by virtue of acquiring a water right, then it could be obtained or even temporarily used under some other construct that would allow that to be done. Mr. Isaeff continued with a review of sections 28, 29, 30 and 31, saying taken together, create language in the bill designed to allow the board to address specific replenishment and ground water problems within districts that may be created in the region. Mr. Isaeff said specifically section 28 allows the board discretionary authority to create and determine the boundaries of either replenishment district, such as ground water recharge areas, or remediation districts where there are ground water contamination problems that need to be addressed. Mr. McMullen interjected to clarify section 28 and referred to the amendment to line 15, page 10 of S.B. 489. He explained: Basically the theory of this is if you are, in fact, participating in a remediation district, which would be functionally a water quality issue, then generally it would be related to some sort of environmental contamination. And if you are, in fact, doing that, then what we are trying to say is except for the extent to which you caused it, you can have a safe harbor if you participate in a governmentally approved remediation plan. Senator Adler inquired if the remediation portion includes charging a fee to hook up subscribers to a sewer system if a septic system is causing excessive nitrates in the ground water. Mr. McMullen replied, "It could." Mr. McMullen explained theoretically when a need is seen, section 28 is supposed to create a remediation district which is a water quality district, or a replenishment district which is a water quantity district. He said that at that point fees can be imposed. Mr. McMullen continued, for the record: They have no intention of moving forward on that until and unless there is a plan and they move in accordance with that. There are a couple of areas that I think would be potential qualifications to that and those are areas where we would need to move sooner and create those. But in doing so, we have added language that creates advisory committees for the imposition of those, and a clear indication, I think, that we will only proceed in accordance with the remediation plan. The reason I make that point is because we understand that there will be reactions to...you are going to put a fee on my well. I want to make one point clear, not only to the committee, but to the audience. The county as the water board now, stepping up for water planning, is also stepping up and meeting some interesting obligations that aren't currently existent. One is that their planning requires them by state law and by otherwise, but to step into that roll they step up to the obligation of protecting the quantity of water available in well fields. That is a significant obligation and one that I think, is an interesting prospect to step up to, but it comes with some heavy responsibilities. Second, and concurrent with that, is an obligation, not only to...protect that quantity, but also to protect the quality.... And so for the first time in at least our area, in addition to your right to pump a well, you will actually have some governmental entity responsible for making sure there is water there when you want to pump it. And that is a significant benefit. And the point is that if, in fact, there is a charge or fee for that, it will be well publicized. It will be well developed in terms of a feature of the plan, and most importantly, it will be in relation to a very significant value or benefit that they currently don't have. And so it is not meant to be something that we move ahead on and just charge people unless we can demonstrate that kind of value and benefit. Mr. Isaeff went ahead with reviewing S.B. 489. He pointed out that some of the section numbers will change in the final print as the bill drafters incorporate amendments into the measure. Mr. McMullen referred to Exhibit D in explaining further amendments to sections 28, 29, 30 and 31. Mr. McMullen told the committee section 32 has been significantly amended and he referred to Exhibit E. He explained it relates to the Public Service Commission's (PSC) authority. He said: We had put in a provision basically driven by an interest in the potential sale by the county and the acquisition by Sierra Pacific of the county water utilities. And that was very fundamentally based on a theory that you cannot regulate those with whom you compete.... At this point the provision is not as necessary because there is no sale contemplated. Basically, it will either happen by service area agreement or operating agreement for the operation of those county utilities by Sierra. But most importantly,...we had a chance to discuss this with the PSC, and I have been trying to also make sure that the Office of Consumer Advocate gets a copy of this...but we amended section 32 to clearly take away a provision which was in there that, if in fact, there was a sale and it was negotiated in the public light between a governmental entity and the supplier, that that would be deemed to be a reasonable price and should be rolled on rate. We have taken that out. PSC, of course, had a concern about that.... What is left now, basically are two things. One is a clear authorization that they can enter into these negotiations and do this without going through bidding or other requirements that are there and authorize that as the most logical solution to a lot of the issues we have in our county. And second of all, indicate that with respect to service area, sort of a two-pronged approach...number 1, that there is a clear delineation between what the county serves...even under its own utilities that would be operated by operating contract with Sierra, and those areas that Sierra has for its service. Mr. McMullen read from Exhibit E for further explanation of the amendment to section 32. Mr. McMullen explained: What we did with the other part of it, which is clearly important to PSC, was say that sort of defines the area. We have those boundaries drawn, but there is a clear understanding and therefore recognition in this statute that any service to be provided clearly must be provided by the rules of the Public Service Commission. So that in summary, is what subsection 1 of section 32 does. Mr. Isaeff continued his review of S.B. 489. Mr. McMullen again eluded to Exhibit D for further explanations of the amendments to section 33 which is now a new section 35. Mr. McMullen indicated it was more appropriate to confirm beneficial use in accordance with the plan in NRS 533.030 than to make a significant change or potentially impacting the anti-forfeiture provisions and forfeiture provisions in those two sections which are already dealt with in those provisions. He said, "Basically it says in accordance with the plan adopted pursuant to this bill, it would in fact be deemed to be of beneficial use." And he explained, "It was thought that was a much more appropriate and a less disruptive way to do it." Senator Adler said he understands the current law defines that if a user had water within a plan on which an extension could be granted, that is placing it to beneficial use. He asked how the language in S.B. 489 differs. Mr. McMullen replied: It merely says that to the extent that it is a planned result and it is rolling out what would be the desired goals of our region. That instead of going through extension requests and those other aspects, that we would just basically considerate it to be a beneficial use. And again it relates to the water bank.... Senator Adler referred to an earlier section in S.B. 489 which relates to acquisition of an out-of-state water right within the plan. In making a point, he used for an example, buying water rights in Douglas County and then putting them within the plan. He commented as long as they are in the plan they are considered beneficial use, then rights in another county could literally be tied up for an indefinite period of time, without really putting them to beneficial use. Mr. McMullen said that they are attempting to do that exact thing in terms of the theory of it. But, he said, a water source may not necessarily be needed right now, but in regional planning it is known that water sources are going to be needed in 10 or 7 or 8 years. He further explained: Before the opportunity is lost, you make a financial commitment to purchase that as a capital asset, even though you are not going to go forward and utilize it or put it into use until year 8 when it makes sense to roll out, in terms of your population distribution, your regional planning and those issues. So in effect, that basically would be what we are trying to do. Mr. McMullen called on Gordon DePaoli, Lobbyist, Sierra Pacific Power Company, to answer Senator Adler's concern. Mr. DePaoli said the change that is proposed in the amendment, under the hypothetical example posed by Senator Adler, possibly does exist the way the language reads in the current law, if that water were held in accordance with the master plan adopted pursuant to chapter 278 [of NRS]. He pointed out the language in S.B. 489 recognizes that this plan is not a plan adopted pursuant to that chapter, but rather a plan that would be adopted pursuant to this new chapter in Title 48 of NRS. Mr. DePaoli said that neither one of those chapters changes the situation. That if water were acquired in Douglas County for use in a master plan in Reno and Sparks or for use under this kind of a plan, neither of these changes the situation. He said in order to acquire water from another county, one would have to apply through the State Engineer's office for an Approved Change in Point of Diversion Place and Manner of Use. Mr. DePaoli pointed out that this amendment says that water held in a bank pursuant to those plans, is considered a beneficial use. He explained the language in S.B. 489 is entirely consistent with the existing provision. R. Michael Turnipseed, State Engineer, Division of Water Resources, came forward to address the question. He said the problem is not with the new language in the section under discussion, but that the problem is with the language that was inserted in 1989. He explained that is the language that defines a beneficial use as water that has been appropriated, or leased, or acquired as long it fits the master plan. He said he totally supports S.B. 489 with the amendments. He stated: We don't read this as exempting them from filing extensions of time or filing proof of beneficial use once the water is developed. It certainly is reason to grant further extensions of time. We have never denied an extension of time as long as there is a bonafide plan to put the water to beneficial use. But the speculators are out there using this language that was put in in 1989 to broker water that they say is within the plan. They are selling land and water rights or selling land separate from water rights or selling water rights separate from the land and the lawsuits evolve by virtue of the fact that I have canceled them because they have no bonafide use for the water. They are small utilities...they are small units of water purveyors and they are small units of water rights.... Senator Adler said he thought the law should be amended so that the language is the same in both sections of the law. He remarked, "It seems like the law has been amended to control Washoe County, but then we have opened it up for everybody else." It cannot be termed a beneficial use for the purpose of receiving a water certificate, according to Mr. Turnipseed, because the water has never been put to beneficial use. He added maybe "beneficial" is the problem word. He said a water certificate is prima facie evidence that the water right has been developed, put to beneficial use and has a priority date and that priority date bars it from any interference by subsequent appropriators. Chairman Rhoads announced he was putting S.B. 489 in a subcommittee of two, with Senator Jacobsen and Senator Adler serving on that committee. He added that the previous question under discussion could be more easily cleared up in a subcommittee. Mr. Isaeff continued with the section review of S.B. 489. Mr. McMullen explained, for the benefit of the audience, amendments to sections 39 and 40 are bill drafter's language and are not meant to take away the current powers of the regional plan in terms of its statement of policies. Mr. Isaeff outlined section 41 and section 42. He stressed that section 45 is an important section to Reno and Sparks because it is the section of the bill which indicates to the two cities that after the plan has been proposed and gone through a lengthy adoption process, it will be submitted to both cities for the final review and approval. And the plan will not become "The Plan" until neither city disapproves of the plan, according to Mr. Isaeff. Mr. Isaeff came to section 47 and called on Mr. McMullen who offered an amendment (Exhibit F). Mr. McMullen referred back to page 5 of Exhibit D. He explained section 39 is a restriction against a subconservancy district being formed in Washoe County "in lieu of this effort." He said that will kick in on July 1, 1997, once an actual plan has been created and put into place. Mr. McMullen added: Not on that sheet [Exhibit D], but very critical to the PSC and I'm sure to the Office of the Consumer Advocate, are deletions in this bill of sections 42 and 43. Those were put in by the bill drafter to accommodate the revisions made in section 32 about PSC authority and since that has been changed, the way it has been changed, those two provisions are no longer necessary to be amended. Mr. McMullen said the remainder of the amendments can be more specifically addressed in a subcommittee. With final remarks, Mr. McMullen announced this portion of the presentation was concluded. Senator Regan complimented the authors of S.B. 489. He remarked: You have included the county, the cities, Public Service Commission, Consumer Advocate, the private sector from the chambers down, Sierra Pacific. You have looked at existing and future water, existing and future sewer needs of... the greater Washoe County. The only ingredient I find not in this bill are the people of Washoe County.... There is a crying need in Washoe County to maintain streets. I see 9 1/2 cents of existing tax going into this with no vote of the people. I find great difficulty with this bill in that the complete population of Washoe County, the City of Sparks, City of Reno, have been totally ignored. And I have not `a dog in this fight.' Mr. McMullen indicated the people have not been clearly ignored. They have been included in a number of different ways. He said not the least of which the elected board makes the decisions. A two-thirds vote is being required which is four out of five commissioners for action on the presented plan. He remarked: So it is a super majority vote in and of itself. Second of all, there is the budget process that is included under section 8 of this law that would throw many of these things into the budget, there is no question about that. About the only thing we don't have, frankly, is a public vote. We have tried to make sure that the representation was cross-sectional enough, not only in the voting members of the planning commission, but also the nonvoting members, to make sure that there was participation. As I have said before, when you include these entities, frankly you are including the public...The unavoidable portion of a water plan or a water planning effort is that you basically need people who can talk technically, hydrologically and in other manners about that.... Mr. McMullen concluded his remarks by saying: We required both of the cities to have a veto power over that and it also goes through a huge conformance review program with regional planning and regional planning government. So there are probably no less than six, and probably, I would say three to four times that many, public hearings that will be involved in this effort. So consequently, maybe we haven't done it perfectly, but we certainly did not clearly ignore them. Senator Regan said he complimented Mr. McMullen and the professional complement of groups brought together. But his concern, in referring to page 2 of S.B. 489, is the financial funding. And he said he is not sure that the citizens of Washoe County have been advised as to how their dollars will be spent. Mr. McMullen, in commenting on section 8, said the theory of that section is like a special assessment district where a dollar is defined as to what needs to be done and then roll that next to the tax rate and decide exactly how that should be funded. He stressed that a budget has to be defined first. And he outlined all the steps necessary before a budget can be passed upon. He remarked, "When you are spending taxpayers dollars, there is probably no perfect process, but we have gone, I think, to the `nth' degree to try to make sure that we haven't done anything...." Mr. Isaeff made final remarks in reference to the public input issue. He indicated the Water Planning Commission will be a public body and will be subject to the open meeting law of Nevada and that the public will have ample opportunity to have input into this process at every stage. Senator Jacobsen remarked he thought it would be an impossibility to put this measure together with all the amendments within the time left in this legislative session. Chairman Rhoads indicated 15 months had been spent on this bill, so maybe it could come together. Mr. McMullen indicated that he thought the questions could be answered rapidly in the subcommittee. That most of the issues have been addressed. Chairman Rhoads pointed out that "Memorandum of Understanding" Exhibit G has been distributed to the committee members. He read the list of signers on that document who agreed to go with this program. Mr. McMullen added, for the record, that Frank Daykin [the party who assisted with drafting this measure] had attended every drafting session over the last couple of months and that they have had the supervision of Brenda Erdoes, Legislative Counsel, Legal Division, Legislative Counsel Bureau (LCB). He stressed the product before the committee this day, has gone through the LCB process. He said those people have been extremely helpful and courteous and he complimented them for their assistance. Mr. Turnipseed came forward to say his agency is in support of a comprehensive water plan being done for Truckee Meadows and outlying basins. He indicated he would save further remarks for the subcommittee. Chairman Rhoads inquired if a water plan should come from the state down or from the bottom up. He imparted he had received mail on the water planner issue, indicating that people feel the plan should come from the bottom up. Mr. Turnipseed remarked that comes from the lack of water planning because there has not been a lot of water planning done since early 1970. He said it really did not matter much how water planning gets done as long as it gets done. Naomi Duerr, State Water Planner, Division of Water Planning, indicated she is in support of the concept of Washoe County forming a regional water planning agency and she agrees with Mr. Turnipseed's comments concerning the need to do water planning. She said she assisted with the development of the regional water management agency concept with the staff from Washoe County, so she is supportive of the overall concept. Ms. Duerr explained there are three particular issues contained in S.B. 489 which she is concerned about. She continued her remarks: The first is that I believe that any water plan that a county would develop should be consistent with state water policy. The state water policy is envisioned to be developed by the division, enacted by the Governor, and then...endorsed, authorized, approved by the Legislature. I think that water planning, for too long in Nevada, has been very fragmented, that is one of the reasons that we have developed the water policy and why we are developing the state water plan. I think it is very important that we move together...so that one region is not planning to the detriment of another.... The county is talking about developing a plan for the county, however, I think Senator Adler brought up issues that the county may envision buying water rights outside the county. I think what is important to recognize is that any water planning that is done in Washoe County, very much affects downstream users.... So my first comment is just that I believe we should amend section 17 to say that the plan should be consistent with the state water policy and the state water plan, not just consistent with the comprehensive regional plan. Otherwise, why are we doing a state water plan...and state water policy. I think it is very important that the legislature stay in the driver's seat as far as planning for the state.... The second point is that there is an amendment to the bill...but that plan would say that the water plan developed by this regional agency would substitute for the water plan that would be developed by the state. The reason I have an issue with that...is that the plan that is conceived to be done by Washoe County doesn't address all the issues that the state water plan does address...I just think that we need to make sure that we have oversight. That we make sure that the plan is done on a more of a watershed basis, even larger than Washoe County, and that it takes into consideration downstream users. Ms. Duerr continued her remarks concerning a state water plan. She added her main concern is that sight is not lost of the good work that has been done in developing the water plan so far. Ms. Duerr said another area she sees lacking is the whole issue of habitat. She explained that habitat in Nevada is very closely connected with water. She stressed that any water plan should not be a capital improvement plan or an infrastructure plan dealing with water supply and sewage, but also needs to look at issues of managing the river in the Reno area. Ms. Duerr said in summary, she thought that any plan adopted pursuant to "this act", should be consistent with the state water policy and state water plan. She indicated that if each county is exempted from the state water planning, it could eventually lead to dismay and anarchy in water planning. And she remarked this is something the committee needed to address as they address S.B. 489. Chairman Rhoads commented then this regional plan could not be completed for several years as there is no state water plan. Ms. Duerr said there is a proposed state water policy that is under review which is not adopted yet and that the proposal in S.B. 489 is effective in 1997. Senator Adler pointed out that section 16 of S.B. 489 addresses many of the issues Ms. Duerr discussed, including habitat. Juanita Cox, Lobbyist, People to Protect America, came forward in opposition to S.B. 489. In reply to Chairman Rhoads' question, she said she represents under 100 people. She said her group is concerned with the great spin that is put on redeveloping. She pointed out there is a Regional Water Planning and Advisory Board of Washoe County, and it is being changed to some kind of a planning commission which will make new costs for ads and administrative costs, et cetera. She continued, by asking what will happen to the Truckee Canyon. She said the problem with the regional look is that it is not looking at the whole region, for instance the Storey County residents, the farmers, the users of the lower Truckee. She remarked this is taxation without representation because her group is being involved in this without ever being represented in this "plan." Ms. Cox said she lives in Storey County and has been personally contacted twice during the last 5 years by the City of Reno. She said she has inquired about jurisdiction and representation through her county commissioners, and was told to "just go along with them." She asked where is her voice when this "plan" is implemented. She reiterated the remarks by Ms. Duerr that all entities that use this water should be considered. Ms. Cox said the main concern of her group, is the transfer of jurisdiction from the PSC to Washoe County Commissioners, and the future sale of Washoe County's water division to Sierra Pacific Power Co., and then to a Washington power company. Ms. Cox concluded by saying her group is very concerned with a lack of the citizenry being represented by competent attorneys such as those at the PSC. She stated also it seems that ancient water rights are not being considered. She said therefore, the committee is asked to reject S.B. 489. Galen D. Denio, P.E., Commissioner, Public Service Commission, stated his agency will work with the subcommittee on S.B. 489 to make sure amendments discussed previously are included. He indicated he wanted to clarify that the nonvoting member from the PSC, as outlined in section 11, will be a technical staff member. He said the changes in section 32 (Exhibit E) accommodate the needs of the commission in order to retain authority over the Sierra Pacific Power Company to approve any expenditures or acquisitions, et cetera. He told the committee the PSC agrees to the deletion of sections 42 and 43 as they are not necessary with the changes in section 32. Mr. Denio expressed desire to work with the subcommittee. Chairman Rhoads appointed Senator Jacobsen chairman of the subcommittee, and named Senator Adler to the subcommittee. Fred Schmidt, Consumer Advocate, Office of Advocate for Customers of Public Utilities, Office of the Attorney General, told the committee he had originally intended to oppose S.B. 489, but at this point he cannot indicate the position of his office since he just received substantial amendments which address a lot of his concerns. Mr. Schmidt continued his remarks: I would note though that you should not take a lot of comfort in the inclusion of a representative of my office as a nonvoting member of the panel, because the development of that was done without consulting my office, as has the development of the bill. We have not been involved in the development of this bill, and are not sure, what, if any, role we would be playing in it despite the reference to our office in the bill. I do have concerns about section 32 and I don't know if the amendment handed out today is satisfactory to address those, although it appears to. There is not in the amendments that were handed out to you today though, a change in writing referring to withdrawing sections 42 and 43. And I would indicate to you that I strongly oppose those sections included in the bill. I thought I heard Mr. McMullen say he would withdraw those sections.... That is critical to any support we would have for the bill as well. Mr. Schmidt indicated he would work with the subcommittee. Richard E. Reavis, P.E., Deputy Administrator, Air, Mining and Water Programs, Division of Environmental Protection, came forward to state his division has no objection to S.B. 489 as amended with the amendments outlined by Mr. McMullen. Senator McGinness commented he has some concerns, not with this bill, but with section 35 which outlines the make-up of the advisory board on water resources. He said he had a conversation with Governor Bob Miller in January concerning rural representation on that board. Senator McGinness said he would visit with the subcommittee on that subject. Senator McGinness suggested that section 35 could be amended to spell out who gets membership, and that by omission it looks like there are three members from the remaining areas of the state. He proposed those three members could be from the rural areas. Senator McGinness said he would visit with Mr. Hester about the Truckee River flows because he wants to make sure the return flows are included in this measure. Chairman Rhoads closed the hearing on S.B. 489 and opened the hearing on Assembly Joint Resolution (A.J.R.) 35. ASSEMBLY JOINT RESOLUTION 35: Urges Congress to reduce paperwork requirements associated with National Environmental Policy Act. Barbara Curti, President, Nevada Farm Bureau, indicated she was in support of both resolutions before the committee today, A.J.R. 35 and A.J.R. 36 (on which the chairman has not yet opened a hearing.) Ms. Curti said Nevada ranching families have been severely impacted by drought, by low cattle prices and by heavy-handed land management agencies. She stated the litigation against the U.S. Forest Service concerning the Humboldt National Forest, if successful, would be the "straw that broke the camel's back." Ms. Curti indicated the Farm Bureau supports any collaborative effort that would bring all parties together that would resolve their differences. She told the committee the Farm Bureau also supports legislation that would allow grazing permits to be renewed without the National Environmental Policy Act (NEPA) process being used to halt continued grazing. Ms. Curti read comments from Gaylyn Spriggs, Lobbyist, Rayrock Mines, Inc., indicating she supports A.J.R. 35. Chairman Rhoads discussed Assembly Joint Resolution (A.J.R.) 36 with Ms. Curti. ASSEMBLY JOINT RESOLUTION 36: Urges resolution of litigation over authorization of grazing permits in Humboldt National Forest. Ms. Curti recognized both resolutions address the Humboldt National Forest litigation. Stephanie Licht, Secretary/Treasurer, Nevada Wool Growers Association, came forward in support of A.J.R. 35 and A.J.R. 36. Chairman Rhoads entered into the record a letter from the Nevada Wildlife Federation (Exhibit H) signed by representatives of that organization, in support of "certain aspects of each resolution." Chairman Rhoads closed the hearings on A.J.R. 35 and A.J.R. 36. Chairman Rhoads opened the work session on Senate Bill (S.B.) 261. SENATE BILL 261: Authorizes lease of state land to certain nonprofit or educational organizations for reduced charge. Chairman Rhoads indicated Senator Adler has been working on this measure and he has temporarily left the committee hearing. Senator Jacobsen said he thought it important that this bill be processed because the state is the owner of 100 acres and 100 buildings at the Stewart Indian Complex, and at least one-third of the buildings are unoccupied at this point. He indicated there have been a lot of requests to use the buildings. Senator Adler returned to the meeting room and Chairman Rhoads called on him to discuss Amendment No. 573 (Exhibit I) to S.B. 261. Senator Adler said the general idea is to amend the measure so that every entity is not eligible for a low cost lease of state lands. He explained the remainder of Exhibit I. Thom Reilly, Acting Director, Department of Human Resources, came forward in support of S.B. 261. He said an issue they were concerned with is the language at the top of page 2, Exhibit I, which states, "not less than the costs incurred by the state to administer the lease and manage the property." He explained two of the nonprofit agencies currently leasing from the institute, pay 25 cents per square foot, and the cost to the institute is 73 cents per square foot to manage that property. Pamela B. Wilcox, Administrator, Division of State Lands, came to the witness table to join in the conversation concerning S.B. 261. Senator Adler said the language in the amendment should refer to utility costs, not administrative costs. Mr. Reilly suggested language, "for an amount which is reasonable considering the estimated costs and benefits to the state," and explained so that a nonprofit agency will have to demonstrate their services to the state far outweighs what the cost is to manage the property. There was further discussion by Mr. Reilly and Senator Adler concerning costs to the state and what it includes. Senator Jacobsen, stated for the committee's benefit, everything within the Stewart Indian Complex is on a common system, i.e., water, sewer and utilities. He stressed it is hard to use just a single building and estimate the costs for just that building. Chairman Rhoads indicated with the language suggested by Mr. Reilly, that it would be feasible to lease a single building at the complex. Senator Adler read the suggested language to be placed in the amendment, (Exhibit I), for an amount which is reasonable considering the estimated costs and benefits to the state. It was agreed upon by the committee. Chairman Rhoads asked Fred Welden, Chief Deputy Research Analyst, Legislative Counsel Bureau, to arrange for the new language to be inserted in the proposed amendment to S.B. 261. Ms. Wilcox made a few comments on the amendment to S.B. 261 concerning section 1, subsection 1(b) A public educational institution or organization. Following discussion, the committee agreed to delete or organization. Ms. Wilcox had other suggestions for amendments to S.B. 261 which she indicated she would compose and submit to Mr. Welden. Ms. Wilcox had further housekeeping concerns in reference to leasing of public state lands which were discussed at length by the committee. Senator Jacobsen made a statement concerning the maintenance of the buildings at the Stewart Indian Complex. He asked that language to the effect that, "renovation by lessees may be necessary" be placed in the amendment at hand. SENATOR ADLER MOVED TO AMEND AND DO PASS S.B. 261 WITH THE PROPOSED AMENDMENTS AND CHANGES. SENATOR LEE SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JAMES WAS ABSENT FOR THE VOTE.) ***** Chairman Rhoads asked Ms. Wilcox and Mr. Welden to work on the proposed changes to the amendments. Chairman Rhoads opened the hearing on Senate Joint Resolution 11. SENATE JOINT RESOLUTION 11: Urges Congress to investigate utility of importing water to Nevada from sources outside Nevada. Assemblyman Joseph E. Dini, Jr., Assembly District No. 38, remarked this is an old resolution which was started in 1929 by Charley Hendel who was an Assemblyman in Hawthorne. Assemblyman Dini indicated he has introduced this resolution in every legislative session since the 1970s, basically to remind the Nevada congressional delegation that Nevada needs all the water that may become available to it. He said S.J.R. 11 came out of the water study of last summer and was brought to the Legislature so that it could be processed and perhaps encourage the Nevada congressional delegation to keep an eye for water that can be moved around for northern Nevada. Assemblyman Dini stressed there is no salvation for Walker Lake or Pyramid Lake without some extra water coming from another source. He remarked these are primitive lakes that now have dwindled down to small areas. Remarks were added by Senators Regan, Jacobsen and McGinness. Chairman Rhoads closed the work session on S.J.R. 11 and opened the work session on Assembly Joint Resolution (A.J.R.) 26. ASSEMBLY JOINT RESOLUTION 26: Expresses vehement opposition to storage of radioactive waste in Nevada. Chairman Rhoads announced there would be no action taken on this measure until a full committee is present. Chairman Rhoads opened the work session on Assembly Joint Resolution (A.J.R.) 29. ASSEMBLY JOINT RESOLUTION 29: Encourages extension of existing systems and facilities for nonmotorized transportation completely around Lake Tahoe. Chairman Rhoads asked for a motion on the resolution, stating there are no amendments to the measure. SENATOR ADLER MOVED TO DO PASS A.J.R. 29. SENATOR McGINNESS SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR JAMES WAS ABSENT FOR THE VOTE.) ***** Chairman Rhoads asked Senator Adler to handle S.B. 261 with the amendments when it is ready for the Senate floor. And Senator Jacobsen said he would "back him up." Senator McGinness announced a subcommittee would meet on Senate Bill 95 at 1:30 p.m., June 1, in room 224. SENATE BILL 95 Requires state engineer to establish system of credit for conservation of water. There being no further business to come before the committee, Chairman Rhoads adjourned the meeting at 4:30 p.m. RESPECTFULLY SUBMITTED, Billie Brinkman, Committee Secretary APPROVED BY: Senator Dean A. Rhoads, Chairman DATE: Senate Committee on Natural Resources May 31, 1995 Page