MINUTES OF THE SENATE COMMITTEE ON NATURAL RESOURCES Sixty-eighth Session June 7, 1995 The Senate Committee on Natural Resources was called to order by Chairman Dean A. Rhoads, at 2:35 p.m., on Wednesday, June 7, 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 Roy Neighbors, Assembly District No. 36 STAFF MEMBERS PRESENT: Fred Welden, Chief Deputy Research Analyst, Legislative Counsel Bureau Billie Brinkman, Committee Secretary OTHERS PRESENT: Doug Busselman, Executive Vice President, Nevada Farm Bureau J. Michael Turnipseed, State Engineer, Division of Water Resources Stephanie Licht, Secretary/Treasurer, Nevada Wool Growers Association George Benesch, Attorney, Counsel for the State Engineer Ray Bacon, Lobbyist, Nevada Manufacturers Association Joseph L. Johnson, Lobbyist, Toiyabe Chapter, Sierra Club Marjorie Sill, Self Ande Engleman, Self Elsie Dupree, Lobbyist, Nevada Wildlife Federation Danny Thompson, Lobbyist, Nevada AFL/CIO Lew Dodgion, Administrator, Division of Environmental Protection Audrey Cawthorne, Self Juanita Cox, Lobbyist, People to Protect America Karl Cahill, Director, Environmental Health Services, Washoe County Health District Russell A. Fields, Administrator, Division of Minerals Grace Bukowski, Lobbyist, Royal Alliance for Military Accountability John Livermore, Mining Geologist Willie Molini, Administrator, Division of Wildlife Chairman Rhoads opened the hearing on Assembly Bill (A.B.) 435. ASSEMBLY BILL 435: Revises provisions governing forfeiture of certain water rights. Assemblyman Roy Neighbors, Assembly District No. 36, sponsor of A.B. 435, came forward to clarify the bill. He explained A.B. 435 stipulates that with a certificate issued for a perfected application to appropriate water from an underground source, or to make certain related changes, the state engineer must include a notice of the provisions governing forfeiture or abandonment of water rights. He pointed out that A.B. 435 replaces the term holder with the owner of record. The bill requires the state engineer to notify the owner of record of a water right when the state engineer's records indicate that at least 4 consecutive years have passed in which water has not been put to beneficial use. Mr. Neighbors added that the notice must indicate that the owner has 1 year in which to provide proof of such use or to apply for an extension, and that the state engineer must notify the owner whether such an extension has been granted. Mr. Neighbors said if water is not put to beneficial use and no extension has been granted, the state engineer must declare the right forfeited within 30 days. Mr. Neighbors said under current law, a failure for 5 consecutive years to put underground water to beneficial use results in forfeiture. He pointed out A.B. 435 does not change the 5-year forfeiture period, but the notice requirement is intended to provide an opportunity to submit proof of beneficial use for an extension. Mr. Neighbors indicated there are no retroactive provisions in this bill. He added the concept of notification is not new, that New Mexico has this notification system. Doug Busselman, Executive Vice President, Nevada Farm Bureau, read a prepared statement (Exhibit C) in support of A.B. 435. Mr. Busselman added further amendments not outlined in Exhibit C are needed. He said starting with line 19 and going through line 48, page 2, there are several places where holder has been bracketed and owner of record has been substituted. He indicated the language should be changed back to holder in those portions from line 19 to the end of page 2. Mr. Busselman explained that originally on line 5, page 2, when language was being drafted, it was suggested that the notification process be directed to the owner of the record that the state engineer retains in his records. Then when the amendment process was gone through on the Assembly side, Mr. Busselman said the word holder was changed to owner of record in the remainder of the bill which was unintentional. Mr. Busselman explained that the changes in the language starting with line 21, page 1, through line 18, page 2, should remain as it appears in the first reprint of A.B. 435. Mr. Neighbors interjected a clarification that there is no fiscal impact on A.B. 435. J. Michael Turnipseed, State Engineer, Division of Water Resources, testified that he agreed with the suggested amendments, however, the bill drafter "took a lot more liberty than was needed." He referred to the first part of section 2, A.B. 435, pointing out it should not matter whether it is the owner of record that fails to use the water for 5 years, that it may be a prior owner for 3 years and a subsequent owner for 2 years or any combination of nonuse. Mr. Turnipseed said the water right should still be subject to forfeiture. He indicated the only place the language "owner of record" belongs is in the notification language at the top of page 2. He suggested an additional amendment to line 5, page 2, by inserting the language "in the state engineers office" between the words right and by, so there is no misunderstanding as to whose records are being referenced. Mr. Turnipseed stated he believes this measure to be a good bill with the suggested amendments. Chairman Rhoads inquired if there was a discussion during a prior committee hearing on A.B. 435 concerning an issue of mailing out notices on a monthly basis. Mr. Turnipseed said his office has taken the position that if 5 years have already past, those nonusers of water rights are not to be notified. Under this measure it is only the ones where 4 years of nonuse of water rights have occurred, but not yet 5, which is explained in section 2 of A.B. 435. Mr. Turnipseed said there are probably 4,000 water rights in the state that are subject to forfeiture. He stated his office "was not created to take water rights away from people." He answered the chairman's question by stating this measure will not involve a lot of mail outs. Further discussion was held relative to the proposed language changes. Stephanie Licht, Secretary/Treasurer, Nevada Wool Growers Association, came forward to express support of A.B. 435. George Benesch, Attorney, counsel for the state engineer, stated he personally supports A.B. 435. He said this measure will go a long way toward eliminating the surprise element that seems to be present with forfeitures. He indicated once the proceeding is commenced, there is very little that can be done, so this measure will put the individuals in question on notice and avoid the surprise element. Mr. Benesch indicated he concurs with the bill and the proposed amendments. Chairman Rhoads closed the hearing on A.B. 435 and opened the hearing on Senate Bill (S.B.) 533. SENATE BILL 533: Provides for self-evaluation concerning hazards to health and environment. Ray Bacon, Lobbyist, Nevada Manufacturers Association, told the committee S.B. 533 is a bill on environmental self-audits. He referred to a single printed statement (Exhibit D), and explained a packet released by the American Legislative Exchange Council, with the title page, "Uniform State Environmental Audit Privilege Act" (Exhibit E) (On file in the Research Library.) Mr. Bacon said the intent expressed in the exhibits is to get people with environmental problems to focus on cleanup rather than to ignore those problems or litigate the issues. Mr. Bacon expressed S.B. 533 puts into statute the fundamental policies that the Division of Environmental Protection (DEP) has followed for many years. He pointed out this bill contains two major features: 1) It removes penalties, and 2) provides privilege for the information that is discovered during the self-audit. Further discussion was provided by Mr. Bacon. Joseph L. Johnson, Lobbyist, Toiyabe Chapter, Sierra Club, the next person to testify, expressed opposition to S.B. 533 in its entirety. He said his group does support the concept that people who run an audit and make cleanups should not be penalized for civil penalties referred to in sections 17 and 18. He indicated, however, the remainder of S.B. 533 is "awfully problematic." Mr. Johnson said it is not simply the Sierra Club or environmental groups who oppose the legislative proposals that have cropped up all across the country. He referred to printed information, "SB 533, a.k.a. POLLUTERS PROTECTION ACT" (Exhibit F) (On file in the Research Library) which includes several informative statements and quotes. Included in Exhibit F is a resolution proposed by the National District Attorneys Association, which states that group "opposes any regulation or legislation involving environmental self-audits which provides for privileges (statutory or common law), immunity or qualified immunity." Mr. Johnson referred to other statements included in Exhibit F and requested they be made a part of the record. He especially called attention to an article written by David Ronald, Assistant Attorney General and Chief of the Environmental Crimes Unit in the Arizona Attorney General's Office, which appeared in the September 1994, issue of NATIONAL ENVIRONMENTAL ENFORCEMENT JOURNAL, a part of Exhibit F. Mr. Johnson addressed the federal policy which was published in the Federal Register, April 3, 1995, which deals in comprehensive nature with the issues of immunity and privilege, also made a part of the record within Exhibit F. Mr. Johnson said the question today is, "is there a need for this legislation?" At this point he quoted from Exhibit F, "In Nevada, there have been no examples of civil penalties or criminal prosecution involving the use of information contained in a voluntarily initiated environmental audit!" Mr. Johnson continued his testimony referring to Exhibit F and provided further remarks. He further stated, "This [S.B. 533] is a polluter's protection act as it is written." He concluded by saying his group is strongly opposed to the provision of secrecy which is provided in the language in this measure. He did say however, that the provisions in S.B. 533 for granting immunity on civil penalties are favorable and "should be looked at." Chairman Rhoads and Mr. Johnson discussed other states that have passed legislation similar to S.B. 533. Mr. Johnson provided further discussion on the subject at hand, expanding his previous testimony taken from Exhibit F, and he repeated his earlier statement that his group strongly opposes privilege. Marjorie Sill, Self, came forward in opposition to S.B. 533 because of her concern over the issue of the secrecy language in this measure. She said she believes this bill is unnecessary. Ande Engleman, Self, testified in opposition to S.B. 533. She commented she believes some of the language in this measure is unconstitutional and she referred specifically to section 19. She then told the committee the language affects the right of the press to gather information and to write that information without punishment. Ms. Engleman referred to the whole idea of this measure as "reverse blackmail." She concluded by commenting, "This is America. Information such as this is supposed to be open and public, and we are not supposed to barter with the public's right to know, in order to encourage a company to do something they are supposed to do anyway." Elsie Dupree, Lobbyist, Nevada Wildlife Federation, reiterated previous testimony in opposition of S.B. 533, and echoed her group is also opposed to the secrecy language in this bill. Danny Thompson, Lobbyist, Nevada AFL/CIO, came forward in opposition to S.B. 533. He concurred with the previous testimony and indicated his group, too, is opposed to the secrecy language in this bill. Lew Dodgion, Administrator, Division of Environmental Protection (DEP), indicated the DEP is opposed to S.B. 533. He said he supported most of the testimony of the previous speakers. Mr. Dodgion told the committee the DEP operates most of the environmental programs within the state. He remarked those programs are designed to achieve compliance, not designed to seek penalties. He said the end product is to get compliance, that the penalties sometimes are a tool that has to be used for the end result. He alluded to a program at the Small Business Development Center at the University of Nevada, Reno, that is supported financially by the DEP which provides assistance to small businesses for the Resource Conservation and Recovery Act (RCRA) program in management of hazardous waste. He said RCRA, in addition to disseminating information, will do an audit of a company's hazardous waste management program. He said that audit is treated as confidential. He pointed out there are exceptions. If there is a situation where there is an eminent endangerment to the environment or public health or the health of the workers, then DEP is notified. He said, to the best of his recollection, that situation has never arisen in Nevada. Mr. Dodgion told the committee that the Federal Clean Air Act requires all of the states to do a small business assistance program for the clean air act program. He said that program has been placed in the DEP budget for Fiscal Year (FY) 1996 and FY 1997. He added he has expanded the scope of that program in Nevada to include all the environmental programs, not just confine it to the clean air program. Mr. Dodgion said it is the intent of DEP to develop an audit assistance feature within that program. Mr. Dodgion expressed he does not believe legislation such as S.B. 533 is necessary in Nevada and he outlined some of the problems with the measure, which include the secrecy issue, and the "whistler-blower" language. He added the bill, with the secrecy and the privilege language, provides a protection that a "bad actor" can hide behind and shield his activities and protect himself from penalties which may be rightfully deserved. Mr. Dodgion said this bill also seems to open programs which have been delegated to DEP by the Federal Environmental Protection Act (FEPA) to possible de-delegation or a portion of de-delegation, because it does not have the same penalty provisions and enforcement provisions that the federal laws provide. He stressed that is a requirement for delegation. Mr. Dodgion said if a law such as this is enacted, he believed Nevada will be subjected to additional oversight and a potential of additional over-filings by the FEPA. Mr. Dodgion referred to a "Federal Register Notice" from which he read: EPA, in its June 20, 1994, `Federal Register Notice' has intimated that regular over-filing may become its policy in states that have provided for environmental audit privileges. Mr. Dodgion stated that with this bill, there is the potential of happening, which means instead of dealing with the state regulatory agency that has been built up to be fair in working with the industry, they will find themselves exposed to working with the FEPA. The FEPA penalties will be a lot higher than anything that his state agency would ever think of imposing, according to Mr. Dodgion. Mr. Dodgion then went through the sections of S.B. 533, pointing out the problems within the measure as written. Mr. Dodgion made the following suggestion: That if an audit bill and an immunity bill be considered, that everything should be done in the light of day. That the person who wants to do an environmental audit and your good companies will do that, they should come to the...agency that is responsible for enforcing the particular law and say `we want to do an audit and we would like your help.' The scope, the protocols and the time frame to do the audit should be negotiated with the agency. The audit should be done within that time frame. The audit should be disclosed immediately to the agency, and then a compliance schedule should be negotiated between the agency and the company. And then, if all of those things are done, then there should be a rebuttable presumption of immunity from penalty....The public has a right to know about these things. In reply to Chairman Rhoads inquiry, Mr. Dodgion said his agency rarely fines a company that has a problem. They attempt to assist in working out the problem and finding the cause of the problem. He said that his agency is interested in compliance, and helping a company come into compliance. Mr. Dodgion admitted the agency has collected fines. He said that a penalty is a tool to achieve compliance. Senator Adler asked how a company would know when they had come into compliance with a self-audit. Mr. Dodgion said he believed the regulator agency's input was necessary before an audit was done by a company. Mr. Dodgion said, in reply to a question by Senator Jacobsen, that his office does get anonymous calls concerning problems, as well as other calls. And that they try to find out if there is anything to corroborate any allegation suggested by such calls. Audrey Cawthorne, Self, came forward in opposition to S.B. 533. She related a personal experience to the committee of having to go through the process of replacing an underground oil tank on her property. She remarked that it was handled easily and was not a big burden. Juanita Cox, Lobbyist, People to Protect America, came forward to testify in opposition to S.B. 533. Karl Cahill, Director, Environmental Health Services, Washoe County Health District, spoke in opposition to S.B. 533. He commented his agency finds this measure to be onerous and they recommend it not be processed. He said much of the information gained in his office is from the business people making disclosures directly to his office seeking help, and the roll of his agency is to assist those people to come into compliance with the laws. He remarked when a mantle of secrecy is put on this, a level of trust will be damaged between the government and private enterprise. Chairman Rhoads closed the hearing on S.B. 533 and opened the hearing on Senate Joint Resolution (S.J.R.) 25. SENATE JOINT RESOLUTION 25: Urges Secretary of Defense and Secretary of the Interior to make certain portion of Tolicha Mining District available for use by public. Russell A. Fields, Administrator, Division of Minerals, read a prepared statement (Exhibit G) in support of S.J.R. 25. For part of the record, Mr. Fields offered a detailed map of the Western Portion of Tolicha Mining District Proposed Land Release (Exhibit H) (On file in the Research Library.) Further discussion ensued by the committee members and Mr. Fields. Grace Bukowski, Lobbyist, Royal Alliance for Military Accountability (RAMA), spoke in support of S.J.R. 25. She told the committee she has researched this particular request for land withdrawal and has identified this land would not jeopardize the military mission at Nellis Air Force Base. John Livermore, Mining Geologist, testified in support of S.J.R. 25. Further discussion concerning development of mining property followed. Chairman Rhoads asked for a motion on S.J.R. 25. SENATOR LEE MOVED TO DO PASS S.J.R. 25. SENATOR REGAN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS ADLER, JAMES AND JACOBSEN WERE ABSENT FOR THE VOTE.) ***** Chairman Rhoads opened the work session on Assembly Bill 160. ASSEMBLY BILL 160: Makes various changes to provisions governing issuance of restricted nonresident deer tags. Chairman Rhoads explained the original bill provided for 25 percent of the nonresident deer tags would be set aside for hunting guides in Nevada. And he informed the committee that number was amended to 50 percent in the Assembly. Chairman Rhoads asked Willie Molini, Administrator, Division of Wildlife, State Department of Conservation and Natural Resources, to come forward for further explanation of A.B. 160. Mr. Molini reiterated his primary concern that he had expressed during a previous hearing on this bill, which is there are a number of hunting areas in Nevada with small nonresident quotas of 10 or less deer tags. He told the committee that making one- half of such a number of nonresident tags available to guided nonresidents is not equitable to the basic regular nonresident. Mr. Molini indicated he would be more comfortable with a lessor figure of tags allotted to guided nonresident hunters and he suggested one-third of the total allottment. Senator McGinness remarked he thought the recommendations made by Mr. Molini are positive. SENATOR McGINNESS MOVED TO AMEND THE GUIDED NONRESIDENT DEER TAG QUOTA TO 33 PERCENT OF THE NONRESIDENT TAG ALLOTMENT AND DO PASS A.B. 160. SENATOR LEE SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS ADLER, JAMES AND JACOBSEN WERE ABSENT FOR THE VOTE.) ***** Chairman Rhoads opened the work session on Assembly Joint Resolution (A.J.R.) 35. ASSEMBLY JOINT RESOLUTION 35: Urges Congress to reduce paperwork requirements associated with National Environmental Policy Act. SENATOR REGAN MOVED TO DO PASS A.J.R. 35. SENATOR LEE SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS ADLER, JAMES AND JACOBSEN WERE ABSENT FOR THE VOTE.) ***** Chairman Rhoads opened the work session on Assembly Joint Resolution (A.J.R.) 36. ASSEMBLY JOINT RESOLUTION 36: Urges resolution of litigation over authorization of grazing permits in Humboldt National Forest. SENATOR McGINNESS MOVED TO DO PASS A.J.R. 36. SENATOR REGAN SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS ADLER, JAMES AND JACOBSEN WERE ABSENT FOR THE VOTE.) ***** There being no further business to come before the committee, Chairman Rhoads adjourned the meeting at 4:15 p.m. RESPECTFULLY SUBMITTED: Billie Brinkman, Committee Secretary APPROVED BY: Senator Dean A. Rhoads, Chairman DATE: Senate Committee on Natural Resources June 7, 1995 Page