MINUTES OF THE meeting
of the
ASSEMBLY Committee on Natural Resources, Agriculture, and Mining
Seventy-Second Session
February 19, 2003
The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:28 p.m., on Wednesday, February 19, 2003. Chairman Tom Collins presided in Room 3161 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Tom Collins, Chairman
Mr. Jerry D. Claborn, Vice Chairman
Mr. Kelvin Atkinson
Mr. John C. Carpenter
Mr. Chad Christensen
Mr. Marcus Conklin
Mr. Jason Geddes
Mr. Pete Goicoechea
Mr. John Marvel
Mr. Bob McCleary
Mr. Harry Mortenson
Ms. Genie Ohrenschall
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Assemblywoman Dawn Gibbons, District No. 25
STAFF MEMBERS PRESENT:
Linda Eissmann, Committee Policy Analyst
Erin Channell, Committee Secretary
OTHERS PRESENT:
Francis Piccinini, Owner of Mark-Fore and Strike Sporting Goods, Reno, Nevada
April West, Legislative Assistant to Assemblywoman Dawn Gibbons
Tina Nappe, former Commissioner for the Department of Wildlife
Terry Crawforth, Administrator, Division of Wildlife
Alan Coyner, Administrator, Nevada Division of Minerals
Hugh Ricci, State Engineer, Division of Water Resources
Glenn Clemmer, Program Manager, Nevada Natural Heritage Program
Roger Van Valkenburg, State Executive Director, Nevada Farm Service Agency, United States Department of Agriculture
Chairman Collins called the meeting to order at 1:28 p.m. A quorum was present. He opened the hearing on Assembly Bill 4.
Assembly Bill 4: Revises provisions governing licenses to hunt, fish, or hunt and fish. (BDR 45-129)
Assemblywoman Dawn Gibbons, District No. 25, presented A.B. 4. With her was Francis Piccinini the owner of a sporting goods store in Reno. Mrs. Gibbons explained that Ms. Piccinini would explain the problems some senior citizens had concerning the price of the licenses. Mrs. Gibbons turned the presentation over to Ms. Piccinini.
Francis Piccinini, owner of Mark-Fore and Strike Sporting Goods Store in Reno, Nevada, thanked the Committee for allowing her to speak to them. She explained that she and her family met an assortment of the population, some of whom were senior citizens. Many of those seniors were forced due to financial or health reasons to move in with family members in our area. They found themselves in a strange place and uncertain of what to do. Many of those seniors liked to be outdoors. Ms. Piccinini stated she had to explain to those seniors that in order to purchase their discounted licenses for those outdoor activities, they needed to be a five-year resident. The seniors were allowed to purchase a regular license at the regular fee after only six months' residency; however, many could not afford to do so. There was about a $16 difference in price, and this proved to be a large difference for some seniors. She went on to describe some of the customers who came in with pennies they had saved, or a couple who could only purchase one license. Ms. Piccinini conveyed her distress that the state of Nevada encouraged seniors to retire here and then did nothing to make them welcome.
Ms. Piccinini explained that 240 of her customers felt the residency requirement needed to be changed on behalf of the senior citizens. When those seniors were told they needed five years' residency, many had to make a hard decision. They simply could not afford the regular price, so they did not purchase the license. Ms. Piccinini had a list of customers who were willing to be included in support of this bill. Ms. Piccinini stated the residency requirement should be returned to six months' residency for anyone coming to Nevada. The five-year requirement was only applied towards seniors over 65 years of age. They were the only segment of the population that had been singled out for the five-year requirement.
Chairman Collins asked for clarification. He asked if the five-year requirement was for the reduced cost of the license. Ms. Piccinini affirmed. Chairman Collins wanted to make it clear that the state was not charging the seniors more. Ms. Piccinini stated that in essence we do charge them more, because they do have to purchase a full price regular license for $31 instead of the reduced fee license of $15. Many customers, Ms. Piccinini stated, could not afford the regular price. Chairman Collins noted there were two ways to look at it. Ms. Piccinini stated that those seniors did pay their taxes so they contributed to the state.
Assemblywoman Gibbons introduced her legislative assistant, April West. Ms. West's family had been involved with the Piccininis for many years. Mrs. Gibbons went on to explain that they were all hunters and fisherman and wanted to allow others to experience the outdoor life as well. She thanked the Committee for their consideration of A.B. 4.
Ms. West stated that she had been answering constituency letters. She noted they had received 200-300 e-mails a day concerning this matter, as well as dozens of phone calls. Ms. West noted the effect on the seniors' lives and the sadness at seeing the seniors who had to do without, when simply changing the residency requirements would not hurt the state.
Ms. Piccinini stated that the change in residency requirements would be a win‑win proposition for the state. If seniors came in to purchase the reduced‑fee license, they might make another purchase from the store, which would be good for the retailer; the state would receive the revenue for the license; the retailer would get the sale; and the state would receive sales tax on that purchase. If the senior could not afford the license, the retailer would lose the sale; the state would lose the fees and the sales tax revenue.
Chairman Collins thanked the witnesses and asked for Committee member questions.
Assemblyman Conklin asked Ms. Piccinini to clarify the current status. He asked when a person came into her store, what her obligation was to find out if they met the five-year requirement. Ms. Piccinini stated she was not obligated in any way. At the bottom of the license was a legal statement that certified that the purchaser of the license had been in the state for five years. The applicants inserted the date of their arrival in the state, their Social Security numbers, their driver's license numbers, and their signatures. The document was legally binding.
Assemblyman Conklin followed up by asking if everyone who came in needed to have a Nevada driver's license. Ms. Piccinini concurred.
Chairman Collins asked if any other members of the Committee had questions and there were none. He then asked if anyone else wished to speak in favor of or in opposition to A. B. 4.
Tina Nappe, former Commissioner of the Department of Wildlife, spoke in opposition to A.B. 4. She submitted a one-page document (Exhibit C). She watched the cost of wildlife management and had concerns about this bill. Speaking as an individual, she explained that she understood the difficulties of low-income people but would like to bring to the Committee's attention that about 5,000 people a month were moving to Nevada. This increasing population had an impact on wildlife habitat and people management. Wildlife management costs were rising. People aged 55 and older now comprised more than one-fifth of the population and in the future were predicted to grow to one-fourth of the state residents. She explained that the package of fee increases was partially designed to compensate for the current number of free licenses and for the low-cost licenses now purchased by the public. In effect, the average sportsman and the non-residents subsidized the free and low-cost licenses. She wondered why someone moving to Nevada could hunt and fish, virtually free of charge, when the rest were paying for the wildlife costs and had been for years. The costs Ms. Nappe referred to were investments in habitat and administration, fish hatcheries, and big game transplants. All taxpayers had paid for wildlife bonds approved by the voters in 1990 and again in 2002. She wondered if any studies had been done to show that people moving to Nevada were so poor that they could not afford the modest fees now in effect. She asked if the people moving here were any less well-off financially than the average sportsmen of the state who were being asked to pay higher license costs, special assessments like tags, and she wondered if those sportsmen should continue to bear those costs. Ms. Nappe asked the Committee to defer this bill until the Committee had a chance to look at the entire package of fees that were being proposed.
Assemblyman Mortenson asked Ms. Nappe if, rather than put the onus on the other side, she had done any research to determine whether those people were more needy. Ms. Nappe stated she had not done any research. Mr. Mortenson stated he believed Ms. Nappe should do some of that research.
Chairman Collins stated that this could be a North-South problem. In the South, a few years back, 40 percent of the population was not here. As people aged, more and more people would qualify for the low-cost licenses. He stated there was a fiscal note of about an $8,000 deficit. He then recognized the next speaker.
Terry Crawforth, Administrator, Division of Wildlife, spoke about the history behind the residency requirements for seniors. In 1994, the Board of Wildlife Commissioners sponsored legislation to create a pioneer license. They were initially looking at those who were natives of Nevada and proposed that in order to get a senior reduced-fee license, one would have had to be a resident in the state of Nevada for 25 years. There were a number of states, Mr. Crawforth continued, that had various provisions concerning senior licenses. The residency requirements could have been as much as 40 years. The concept was a thank you to seniors who had been in the state, had purchased licenses, and were involved in wildlife conservation projects for many years and had paid their dues over the years. As a user-funded agency, the Division of Wildlife was mandated to raise their own fees for conservation, raise and plant fish, as well as other mandates. Whenever the Division saw a reduction in revenues they would receive from license fees, they would be concerned. Mr. Crawforth stated they sold about 10,000 senior licenses a year in three categories: senior combination, senior fishing, and senior hunting. The numbers varied by a few hundred each year. He stated that the Division had researched the number of people who were 65 years or older who were buying a full-priced license and estimated those individuals would be the ones who benefited by successful adoption of A. B. 4. He explained their fiscal note of about $7,300 was made up of the several hundred seniors affected.
Mr. Crawforth went on to describe the various fee increases they had proposed for the next year, and if they were adopted, the loss of revenues to the Division of Wildlife over the years would amount to $30,000. He felt it was a fiscal issue for the Division. He had one additional comment to make about A.B. 4 and that was regarding the effective date of July 1, 2003. He noted that their fiscal year ran from the first of March to the last of February by statute, and they would be changing license rules in the middle of a fiscal year if that date were approved. Mr. Crawforth explained that they sold most of their licenses in the spring and, therefore, most of the seniors would have already purchased a license. It was the goal of the Division of Wildlife to have as many people enjoying the outdoors as possible. He went on to state that Ms. Piccinini's position was admirable, but he was concerned about the loss of revenue to wildlife conservation programs.
Assemblyman Mortenson asked Mr. Crawforth to clarify if a senior did not have a driver's license that seniors could not purchase a license. Mr. Crawforth responded that the Division asked that the license agent require some identification, and the license agents were very good about getting it. If an individual did not have a driver's license, such as juniors who were not old enough to obtain a driver's license, they would still be able to purchase a license but would need to provide some kind of identification and proof as to how long they had been in the state. He also noted that on the bottom of the license there was a statement "I have been a resident since . . . . " It would be the agent's responsibility to translate that date to ascertain if it were six months or five years. Mr. Mortenson then asked if seniors could purchase licenses if they had some incapacity and could not drive. Mr. Crawforth agreed that they could.
Chairman Collins noted there were no further speakers and closed the hearing on A. B. 4.
Chairman Collins called for the presentation by Nevada Division of Minerals.
Alan Coyner, Administrator, Division of Minerals, Commission on Mineral Resources, presented a PowerPoint presentation. He provided Exhibit D, Exhibit E, Exhibit F, Exhibit G, and Exhibit H. He offered his assistance to the new members of the Committee with regard to issues concerning natural resources. Mr. Coyner explained that the topics for discussion today would be the mission of the Division, programs of the Division and an outline of some issues of importance which he felt the members should be aware of.
Mr. Coyner stated that their mission was to conduct activities to further the responsible development and production of the state's mineral resources to benefit and promote the welfare of the people of Nevada. He noted they were not a regulatory agency. They did some regulation work in oil, gas, and geothermal, but in mining they were viewed as an advocacy group. The structure of the agency, he went on, was that they reported to the Commission on Mineral Resources. That Commission was a seven-member body appointed by the Governor, six from industry and one from the public at large, and they were segmented by their areas of activity within the industry, such as large- scale mining, small-scale mining, exploration, and development. There were nine employees, seven of whom were in Carson City and two in Las Vegas. The budget was approximately $1.1 million, and there was no General Fund money in the budget. The Commission was totally fee-based. Industry relations and public affairs were dominant areas of work, advising the Governor and the Legislature on mineral resource issues, education, outreach to the public, and their biggest program was the Abandoned Mine Lands Program. The Commission also administered the Nevada Reclamation Bond Pool, which was a fund of money that had been set aside to allow small miners to access reclamation bonds, which they then pledged against their reclamation activities at the conclusion of mining.
Chairman Collins asked Mr. Coyner if he wished to take questions at the end of his presentation, and Mr. Coyner stated he would be able to take them anytime as long as they did not count against his 18-minute testimony.
Assemblyman Geddes asked Mr. Coyner what the current size of the bond pool was and how much of that pool was tied up in activities. Mr. Coyner responded that the pool was approximately $2 million in terms of total obligations, and the current level of funding was about $1.4 million. He explained that was $1.4 million in cash placed with the Treasurer. It gained interest, which by statute, was returned to the bond pool, against a potential obligation of $2 million. It was currently a fairly secure position.
Mr. Coyner explained that education about mining was an important concern and discussed the field trips and tours that the Commission as well as the Nevada Mining Association offered.
Mr. Coyner next discussed Abandoned Mine Lands. The Commission was the agency responsible for protecting the public from hazards, which were shown on the PowerPoint demonstration. There were approximately 200,000 hazards in the state, most created by the old-timers during the late 1800s and early 1900s. The miners were quite active in the state. There were approximately 50,000 mines that need fencing and signage. Mr. Coyner noted that there had been 9,000 mines that had been dealt with during the 15 years of the program. He noted about 7,000 had been secured, but there were many more to be done. He explained that the Commission reported to the county commissions on a county-by-county basis as to the number of hazards in their county and the number that had been secured to let them know the progress. Their work was in conjunction with the "Federal Land Management" agencies. If the mine was an orphan hazard, there was no responsible party; if it was not an orphan, the Commission was obligated to notify the owner. They had no authority to force compliance, but needed to notify them. The individual county had the enforcement power. At times the counties had cooperated with them and other times not.
Mr. Coyner showed a record of their progress. There had been a great deal of location work in the beginning of the program. The graphic showed the steady work of hazards secured to hazards discovered. He explained that the orange color showed the orphan hazards secured by the Commission, and the pink were the hazards secured by private industry. There had been a significant drop-off in 2002. He explained that the summer intern program had assisted the last three years. That program hired four college students during the summer to assist them in securing the hazards. That program was very cost‑effective.
Another way to accomplish their mission was through volunteer projects. He showed an Eagle Scout project, in which almost 30 projects had been completed.
Mr. Coyner went on to explain backfilling of hazards, especially in Clark County. The fences, he noted, were temporary solutions. The permanent solution was backfilling which, unfortunately, involved a higher level of cost and a higher level of permitting, especially in the desert tortoise habitat of Clark County. Cultural resources also needed to be surveyed before the physical closure could occur. The program involved the Bureau of Land Management and the Nevada Mining Association, which provided much of the equipment and was very much appreciated.
Mr. Coyner stated the Commission on Mineral Resources produced oil and gas. Their two fields were in Railroad Valley and Pine Valley. They produced about 500,000-600,000 barrels of oil per year. The chart showed a decline but because prices had increased to about $30 per barrel, there was some renewed exploration activity in the state. The peak shown on the graph concerned one well that had been discovered in Railroad Valley called the Grant Canyon Well. Nevada did have some large potential, but it was a difficult state to explore because of the geology.
Geothermal, Mr. Coyner stated, consisted of the plant at Beowawe. Output and capacity had been flat for a number of years. There had not been a significant number of new plants built. One opened, he explained, in 2002, at Brady Hot Springs, but because of its strong resource potential, Nevada had been called the Saudi Arabia of geothermal energy. Nevada was said to have the highest known potential resources for geothermal energy. The Legislature passed a renewal portfolio standard last session, which was driving renewed interest in geothermal energy. The Bureau of Land Management (BLM) had successfully leased a number of parcels, and there was an upswing in well-drilling permits. Mr. Coyner anticipated a fair amount of growth and a fair amount of impact from renewed interest in geothermal over the next few years.
Mr. Coyner showed the Committee a map which showed, in pink, the precious metal deposits, mostly around Elko, Carlin, and Winnemucca; the yellow specified geothermal plants mostly in the western part of the state around Reno and Fallon; the green dots represented the oil producers in Pine Valley and Railroad Valley in Nye County; and the blue represented the industrial minerals, mostly in Clark County.
Assemblyman Geddes asked about the geothermal development being only in the western part of the state. Mr. Coyner stated it had been the traditional area that had the known resource potential. He also noted that there were significant hot springs all over the state; in part, technology was driving it because lower and lower temperatures were being used to produce power. Mr. Coyner stated that some of the areas that appeared less favorable for development now were receiving renewed interest, and the state had a good endowment of mineral resources.
Mr. Coyner's next graph showed the economic value, year by year, which indicated about $3 billion gross value, determined by taking the amount of sales times the dollars. If one looked at the components, gold at $2.4 billion was the dominant driver in Nevada as far as mineral production value. He noted that it would be important for the Committee to remember that the state was currently in the midst of the largest gold boom ever in the history of the United States. He noted that Nevada produced approximately 75 percent of the current U.S. production of gold. If Nevada were a stand-alone country, it would be the third largest producer in the world behind South Africa and Australia. South Africa produced about 15 million ounces of gold per year, and Nevada produced about 8 million ounces per year. He went on to explain about the Carlin Trend. The Carlin Trend was just west of Elko and encompassed most of the mines in that area. They surpassed the 50-million-ounce mark this past April. The Commission had been recording production for a period of time, and in so doing, realized the Carlin Trend had reached that mark. As part of the celebration of that mark having been reached, they minted 100 one-ounce coins, number one of which was housed in the W. M. Keck Museum at the Mackey School of Mines, located at the University of Nevada, Reno. The number two coin was in the Governor's Mansion.
Mr. Coyner next spoke of silver. Nevada was still the Silver State. They produced over 17 million ounces in 2001. The data for 2002 was being accumulated now, but the number would drop below 15 million ounces and perhaps as low as 10 million ounces, because of the closure of the McCoy Cove Mine near Battle Mountain, which had been the largest silver producer in the state. The other primary silver producer was the Coeur Rochester Mine near Lovelock.
Mr. Coyner stated the production of gypsum was at an all-time high in 2001, and he anticipated the same in 2002. Aggregate production was up as well. Because of the population growth, the need for wallboard for homes, which was made from gypsum, and the need for sidewalks and driveways made from the aggregate were the main drivers for the strong demands.
Mr. Coyner next spoke of the following list of new mines and finds which included the Leeville and Phoenix projects in the Carlin and Battle Mountain areas:
· the Millennium project just west of Battle Mountain in Humboldt County
· the Getchell project, which was an old mine
· Turquoise Ridge, which was a new deposit near Getchell project
· the Nevada Packard project
· the Midway mine, an old mine which had recently drilled a number of new holes and spurred a great deal of interest
Assemblyman Carpenter asked if Great Basin Mine Watch had filed suit against the Phoenix project. Mr. Coyner stated he believed so, and his understanding was that they had filed suit at Gold Quarry and Leeville, and they had appealed Phoenix to the State Environmental Commission.
Mr. Coyner continued by discussing active claims in Nevada. The Commission watched this area closely because they were a fee-funded agency and most of the fees were realized from fees on mining claims. In 1990 there were 440,000 claims in the state. In 1993 the federal government instituted a $100 rental fee on the claims. There was an immediate drop in the number of claims. Prospectors were not taking samples and drilling holes, mapping, bulldozing, and doing other types of activities, because of the $100 rental fee. The claims had continued to dwindle until the present time, with 70,000-80,000 claims recorded in 2001. Claims, however, were up for 2002. There was a 7 percent increase for the first six months of the fiscal year from July through December.
Assemblyman Marvel asked if the new claims were from major companies or small prospectors. Mr. Coyner stated he was not able to determine that since companies filed claims under other names or had arrangements with prospectors where the major company might purchase the prospectors' claims for a fee or royalty. Mr. Coyner believed the majority of the claims were based on speculation around the Midway discovery. He believed there was a balance between the major companies and the small prospectors.
Assemblyman Marvel asked what the 7 percent equated to. Mr. Coyner stated about 4,700 new claims filed. Mr. Marvel asked about dollars. Mr. Coyner stated that equaled about $32,000.
Mr. Coyner emphasized to the Committee that the turn-around is driven by the price of gold. How long this might last was unknown to him.
Assemblyman Conklin asked Mr. Coyner about California's lanthanide mines and if Nevada had done any exploration in that area using advancing technology. Mr. Coyner applauded Mr. Conklin for his knowledge and stated that the mine referred to was Mountain Pass, just over the border in California. It was the nation's only producer of lanthanide, which was used in television production and produced the colors that could be seen on the screen. The particular rock type in which those elements occurred was very unusual, and he was not aware of any exploration in Nevada.
Assemblyman McCleary asked if the mine claim fee was $6.00. Mr. Coyner replied that the Commission charge was $6.50 per claim. Those claims had to be registered annually with the county recorder. The county recorders collected those fees, and then they were passed on to the Division of Mining. Mr. McCleary asked if that fee were ongoing as long as the claim was in existence. Mr. Coyner affirmed. Mr. McCleary asked about the federal government's $100 annual rental fee. Mr. Coyner stated it was an annual fee.
Assemblyman Marvel asked Mr. Coyner if he had been keeping track of the net proceeds in mines. Mr. Coyner replied that they did track the total amount of net proceeds of mines, but the advice that Mr. Fields gave him five years ago was not to get involved in tax matters and mining. Mr. Marvel asked if he knew how much was being collected. Mr. Coyner noted that it would have been around $30 million. Assemblyman Marvel spoke of how important it was to rural counties who used the money to add to the budgets. Mr. Coyner agreed it was very important to the rural counties, as the split went back to the rural counties and the state took their portion, but that Mr. Fields would be the best person to address any such issues.
Assemblyman Goicoechea asked about the new bonding requirements for small miners. Mr. Coyner said that he was concerned about the ability to secure reclamation bonds and future corporate guarantees. The federal government revised the "3809 rules," which were the rules that governed mining on federal lands. Part of that involved bonding for notice-level activities, which were level of activities of less than 5 acres. As of January 2003, the small miners had to provide a bond for activities for disturbance on those federal lands. In most cases, if a mine was less than 5 acres, it would require a bond of about $5,000 to a maximum of $10,000. The problem was that the individual small miner and even the major companies could not get bonds, so they were forced to put up cash and letters of credit, which did affect the small miners significantly. That had been the method of choice.
Mr. Goicoechea asked if that did not have an impact on further exploration, especially by small miners in Nevada. Mr. Coyner agreed, and he said he was frequently asked what to do by small miners.
Assemblyman Christensen asked about the Mountain Pass mine and how active that mine was; and, in terms of size, how it compared with some of the other large gold mines in the state; and how significant it was in terms of production. Mr. Coyner stated it was not on par with the larger gold mines. He felt that that mine had "capped" because the Chinese, who mined the majority of gold, would regulate the price and basically hold production at a certain level so he would not anticipate any major expansion at that mine. Because it mined "rare earths," it had a certain amount of radioactive elements associated with it. That had been a point of contention with the regulatory agencies in California in terms of the handling of those radioactive components. Also, the desert conservation area on the California side surrounded it, and the ability to expand that deposit in any significant way was severely limited.
Chairman Collins thanked Mr. Coyner. Mr. Coyner stated he wished to speak about corporate guarantees because the Committee might be hearing that bill and that Assemblywoman Leslie planned to introduce a bill regarding corporate guarantees. The state corporate guarantee was the portion of the reclamation bond that accompanied pledges by mining companies to do their reclamation, and essentially said that their balance sheet was strong enough, they were financially able to do that internally, and they would not need an outside instrument, such as a surety bond or cash, to ensure that the work got done. Mr. Coyner stated he sat on the Corporate Guarantee Review Panel, which had been actively involved in looking at those guarantees, and he would be interested in seeing a hearing. Also, Mr. Coyner stated his belief in the continual growth of renewable energy.
Assemblyman Claborn asked if the $100 fee were the same as assessment fees for each claim. Mr. Coyner explained that the $100 fee was mandatory on all claimants who held more than ten mining claims. If you held ten or less mining claims you could request a small-miner exemption, which allowed exemption from paying the $100 rental but would still require what everyone was previously required to do, which was $100 of assessment work on the claim per year. Assessment work was classified as drilling, sampling, or surveying.
Assemblyman Geddes asked about corporate guarantees. He asked what the difference was between a letter of credit and a corporate guarantee as far as what the company would have to put up monetarily. Mr. Coyner explained he was not a financial expert but would attempt to clarify that. A letter of credit was a letter from the bank of the operator, which stated that that operator had placed that amount of dollars with the bank to ensure the reclamation. The bank would charge the mining company or operator a fee for that letter of credit. He believed that charge was 1 percent of the total, but it would tie up that capital. The corporate guarantee was just a letter filed with the Nevada Division of Environmental Protection, the Bureau of Land Management, or the Forest Service, that said their audited balance sheets showed the company had the financial wherewithal to do the reclamation work.
Chairman Collins thanked Mr. Coyner for the presentation and asked for the Water Resources presentation.
Hugh Ricci, State Engineer, Division of Water Resources, Department of Conservation and Natural Resources spoke to the Committee. He provided Exhibit I and Exhibit J. He said the Committee had received a handout of the PowerPoint demonstration he would be giving. He explained his position and the organizational chart with separate sections, one being the water rights section which included: the appropriations section, surface and water adjudication section, the hearing section, and the title section. The right side of the chart showed the engineering section: water planning and flood projects, South Nevada branch office, and Elko branch office. Most of those people took care of delivering water on the Humboldt River. The duties of the state engineer, he explained, were contained in various sections of the statutes. He enumerated the duties he would discuss.
One duty was the appropriation of water; the second was the adjudication process for anything prior to the statutory time for taking applications. Depending on whether the water rights were surface water or ground water, those duties varied. In 1905 the original water law was instituted. The State Engineer was also responsible for the distribution and regulation of all water that was appropriated. They were responsible for dam safety and water planning, along with floodplain management. Abandonment and forfeiture had also been included in that chart, although that was not one of the prime functions or duties of the State Engineer. He felt, however, the Committee would be hearing about some bills concerning forfeiture of groundwater. The chapters his Division were responsible for were listed on the chart. Chapter 532 dealt with the duties of the state engineer. Chapter 533 dealt with the adjudication statute of surface water. Chapter 534 dealt with the adjudication statute of groundwater.
Mr. Ricci explained they had a very limited role in geothermal, because most of those applications did not have any consumptive use. Chapter 535 related to dams, and Chapter 536 dealt with ditches and canals.
He explained the historical dates which were important to remember. The office of the state engineer was created 100 years ago. In 1903 the law appointed the state engineer to take care of most of the rights that had already been used. However, there was no provision in the law to take care of the new people who wanted to use water. In 1905 the Legislature passed the law allowing for the appropriation of water and formed a system to do that. There were various changes in the law in 1913, and that was the basis on which they operated today. Artesian waterflow was also regulated in 1913. In 1939 a comprehensive groundwater law was added to Nevada Revised Statutes 534 (NRS) that took care of all of the groundwater. The Committee would hear, Mr. Ricci explained, about the doctrine of prior appropriation and riparian doctrine. Nevada was a prior appropriation state. In the late 1800s there had been a Supreme Court case that stated any riparian land purchased from the government fell under the doctrine of riparian rights. Ten years later, the case was struck down by another Supreme Court decision. Nevada, therefore, dealt with "prior appropriation, first in time, first in right, beneficial use to the extent of the water and forfeiture, either use it or lose it."
Mr. Ricci explained how they administered groundwater in Nevada. One map he showed the Committee reflected the groundwater basins, and the other map showed the relief associated with groundwater basins. The map generally showed everything within the Great Basin except the Colorado River basin and the Owyhee River area. The map showed the 232 groundwater basins that were administered by the state engineers; 119 of them were either designated or partially designated. In dealing with groundwater, Mr. Ricci noted, there were approximately 1.7 million acre-feet of water available throughout the state. He explained the perennial yield concept, which meant approximately the same amount of water used was replenished on an annual average basis. He noted that of the 1.7 million acre-feet of water, 10 percent of that occurred in Steptoe Valley and Spring Valley, on the eastern side of the state.
The next slide Mr. Ricci showed the Committee dealt with surface water. There were approximately 4.5 million acre-feet excluding the Colorado River, so it included the Carson River, Walker River, and Truckee River systems. In order to illustrate how little water there was in Nevada, Mr. Ricci researched the Colorado River, and he found that 8.6 million acre-feet surface water passed Lee's Ferry, which was the gauge that separated the upper and lower division of the Colorado River. The river had an annual average flow of 11,920 cubic feet per second, compared to the Columbia River at the gate at The Dalles, Oregon, was 200,000 cubic feet per second on an average for the last 100 years. Mr. Ricci indicated that this equated to 145 million acre-feet of water. For the calendar year 2000, there were 128 million acre-feet. That was 15 times more than what was on the Colorado River. To take that one step further Mr. Ricci stated, if one considered the amount of water that passed that gauge in a day and converted it to the amount of water used by the entire population of Las Vegas, within 11 days, one could satisfy all the needs for Las Vegas for the entire year with the water from the Columbia River. Mr. Ricci noted that with the allocation for the lower basin total of 7.5 million acre-feet among California, Arizona, Nevada, and the treaty obligation of 1.5 million acre-feet to Mexico, every drop of water should be appreciated.
Mr. Ricci spoke of the environmental concerns around the Salton Sea and the Delta. He explained the formula created by the Bureau of Reclamation on how much water was returned to Lake Mead via wastewater treatment facilities. He stated there was a consumptive use number calculated. At that time, Nevada's allocation was 300,000 acre-feet. In 2002, it was approximately 315,000 and in 2001, it was 310,000. Negotiations among California, Arizona, and Nevada collapsed, so Nevada would be cut back to 300,000 acre-feet.
Mr. Ricci explained that groundwater pumping in Las Vegas was approximately 79,000 acre-feet in the year 2000. The Las Vegas Valley Water District included 146 applications, which were filed in Lincoln County, White Pine County, and Nye County. Of those, 28 applications were withdrawn, and there had been four permits granted to divert the water from the river in the amount of 130,000 acre-feet. Mr. Ricci explained some other diversions for power plants just north and east of Las Vegas. The remaining 114 applications that were still on file still had over 3,000 protests associated with them.
Mr. Ricci showed slides representing the Truckee River, originating in Lake Tahoe, flowing through Reno, and terminating in Pyramid Lake. The slides also showed the Carson River terminating in Lake Lahontan and the Walker River system. In 1971 Nevada signed a compact between Nevada and California to settle how much water each state would receive from the Truckee, Carson, and Walker Rivers. However, the agreement was never ratified by Congress and languished until PL 101-618 was enacted in the 1990s. It was hoped it would resolve the litigation concerning the Truckee River. It required a new operating agreement, the Truckee River Operating Agreement (TROA). Mr. Ricci explained that a draft Environmental Impact Statement (EIS) was expected to be completed by January 2004, and the enactment date of TROA was 2006. He noted there were five signatories to TROA. The benefit of TROA would finalize the allocation of the Truckee and Carson Rivers, including Lake Tahoe. It would give drought protection to Reno and Sparks, and it would affect fish and utilization of Truckee River for all users. TROA would provide the efficient use of the Truckee River water and would provide water quality flows and enhanced flows for the threatened and endangered species in Pyramid Lake.
The handout Mr. Ricci provided to the Committee showed the West and East Forks of the Walker River. He went on to speak about the Humboldt River. Mr. Ricci spoke about gold mining and he indicated he had had the opportunity to be in one of the pour rooms and told about the gold bricks that were made. He explained about the amount of water that needed to be removed in order to get to the gold.
Mr. Ricci next spoke of Yucca Mountain and Area 51. He showed pictures of the tunnel and explained about power plants, which had been a big issue in the last session of the Legislature. There had been discussion about whether the power plants should be water-cooled or air-cooled. There was a 15-25 percent difference in efficiency, depending on where in the state you were. Another slide showed everywhere in the state that an application for a power project had been applied for. The next chart Mr. Ricci showed gave descriptions of the status of applications. Mr. Ricci pointed out several applications. Three of the four had been appealed. He stated that another issue that would be heard this session was the Stockwater Bill, S.B. 76. He was unsure whether the Committee might hear about interbasin transfers and trans-county diversions. Other issues that might be heard by the Committee would concern the sunset clause of A.B. 408 of the 70th Session and domestic well issues, Mr. Ricci explained.
Chairman Collins complimented Mr. Ricci on his presentation. He said he thought Mr. Ricci aided the comprehension of southern versus northern growth and the impact that power and water usage in Clark County had on growth and usage in other parts of the state.
Assemblyman Mortenson asked about the Southern Nevada Colorado River allotments, which allowed 300,000 acre-feet by law, in which they had been pulling 314,000 acre-feet. He wondered how development was going forward even though the water allocation was not permanent or guaranteed. Mr. Mortenson asked if the South were not "gambling" that they would forever receive the same amount of water. Mr. Ricci replied that the Southern Nevada Water Authority had done a study in 1997 that had been updated every year since then. It was unusual that a water plan needed to be updated on a yearly basis, but Clark County needed to do that. Nevada was allowed to take more than their allocation because in 1998, Secretary of Interior Babbitt allowed such usage while developing those other resources. He went on to explain how difficult it was to take more water out of the river than was there. There was a proposal now to develop a pipeline from the Virgin River down the Interstate 15 corridor to the northern part of Las Vegas. What would happen, Mr. Ricci believed, was the Senate would have to compress their schedule in the water plan and move those water resources.
Assemblyman Mortenson asked if any one of those resources were definite. Mr. Ricci stated he was not in a position to speak on those resources, but he felt he would need to make a decision sometime on those matters.
Chairman Collins stated that the Committee would be hearing more about those issues.
Assemblyman Goicoechea asked when Mr. Ricci anticipated hearings on the 114 applications in Southern Nevada and the 3,000 protests would be held. Mr. Ricci explained the hearings would be soon.
Assemblyman Claborn asked about the water authority and explained that he was told they would be present at a future hearing.
Chairman Collins thanked Mr. Ricci for his presentation.
Chairman Collins stated he had a request for a Committee introduction to expand the public lands committee to add an "at large" member that would not be elected from a government entity. He requested a motion and a second.
ASSEMBLYMAN GEDDES MOVED TO REQUEST A BDR THAT WOULD ADD AN AT LARGE MEMBER TO THE STATUTORY COMMITTEE ON PUBLIC LANDS.
ASSEMBLYMAN GOICOECHEA SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
Chairman Collins next recognized Glenn Clemmer, Program Manager, Nevada Natural Heritage Program, Department of Conservation and Natural Resources. Mr. Clemmer thanked the Committee for the opportunity to speak before them. He gave an overview of the operations of his department. He told the Committee that they had an 8-person office in Carson City and were one of 50 other Natural Heritage Programs throughout the United States. There were similar programs throughout North America, most of the Canadian Provinces, and some similar heritage programs in Central and South America. He stated that everyone there was familiar with the landscape and the diversity of Nevada with 314 mountain ranges, but they were still learning and there were often surprises about the biological diversity within Nevada. In 1999, the Journal of Bioscience listed 116 terrestrial ecoregions of North America. The Great Basin was the fourth richest in the number of plant species after the Piedmont Plateau, the Gulf Coast, the Colorado Plateau, and then the Great Basin. There was a publication in 2002, which compared the diversity of plants, and animals in the United States. It stated that Nevada was eleventh richest among all states in total species diversity. Nevada ranked sixth in the number of unique species in the state. The state was tenth among all states in vascular plant diversity, and ninth in mammal diversity. He explained that the job served as a clearinghouse of information dealing with sensitive species. Comparison of those species and their vulnerability showed that Nevada was among the top ten regions having the most number of imperiled species and also the most imperiled endemic species.
Looking at the rankings among all states, Nevada had the highest percentage of species at risk. Hawaii led the nation, California was second, and Nevada was third. The Heritage Program ranked all species based on their rarity, the numbers of population, and the numbers of individuals. They attempted to assimilate the information throughout the state of Nevada. A rank of 1 meant that a species was very rare or was imperiled. A rank of 2 meant that a species was at risk, 3 meant the species was rare or vulnerable, 4 were secure, and 5 were widespread and abundant.
The Nevada system watched for the "G1, G2" species, that is, those species which were globally rare or at risk. Mr. Clemmer gave an example of the global system in conjunction with all states. The Bald Eagle was a "G4," which meant it was relatively secure. In the state of Nevada, it was considered to be imperiled, thus making the ranking "G4 S1.” He went on to list the "G1 S1" species.
Mr. Clemmer stated that to date there were over 7,000 occurrence records of information dealing with species throughout the state. The Heritage Program provided that data to a variety of users, federal, state, and the private sector. The Department of Transportation, which funded about 40 percent of this program, used their data. They provided the Department of Transportation with clearance on endangered and threatened species for road widenings, gravel pit operations, and so forth. Other prime users were consultants, particularly those that dealt with mining operations. Those mining operations would check with the Heritage office to see if sensitive species were in their way. The idea was that early identification could avoid litigation or complications in the future. Once something became endangered, the federal Endangered Species Act came into play. If conservation efforts were utilized, the long-term effect enhanced the ability of the state to avoid reaching the level of being added to the federal list of endangered species.
The Heritage Program worked to help conservation, so that extinction or endangered status would not be reached. In addition to just mapping and keeping records on sensitive species, they also did a scorecard. They routinely analyzed all species, put them together by habitats, and looked at the management needs. Many sensitive species across the state were not vulnerable. Most of the high ranked "G1" rankings that needed attention were at the low lands near water. They came up with a scorecard that gave guidance and recommendations of where conservation should be focused and took into account management needs and vulnerabilities of the species.
Mr. Clemmer went on to explain about the Amargosa Toad. In 1993 there was a petition to list the toad as an endangered species. Through the efforts of virtually all natural resource agencies from the Division of Wildlife, the Bureau of Land Management, Fish and Wildlife Service, Nature Conservancy, and others, there was a conservation agreement in place. An effort was made by the people of Beatty to work on a habitat plan, and a trail system was being designed. Mr. Clemmer stated that a trade with BLM to do a land exchange to protect wetlands and work toward a tourism slant for the protection and development of that corridor through Beatty was being established. They avoided a listing and moved towards an exciting conservation effort in that region.
One of the other main items, Mr. Clemmer explained, was a Nevada Rare Plant Atlas, which was on their Web site. This covered 249 vascular plants, mosses, and lichens and it was continually updated. They also were active in the Sage Grouse Plan to develop a vegetation map for the state. This had been updated to better define the vegetation zones throughout the state. They were concerned with the other sagebrush species, such as the pigmy rabbit, to see where they might fit into the picture. They were also looking at an ecosystem approach to the sagebrush ecosystem. They continued to map, obtain sensitive species information, evaluations, and rankings. They had recently hired a wetlands planner. Above all, the Heritage Program addressed the huge diversity of animals and plants in Nevada.
Chairman Collins asked how many people were in this program. Mr. Clemmer stated there were eight people. Chairman Collins asked if they were all scientists, and Mr. Clemmer stated there was one office manager, one wetlands planner, who had a background in science, and the rest were scientists. Chairman Collins then asked about their budget. Mr. Clemmer stated it was approximately $600,000, 41 percent of which was received from federal funds. Mr. Clemmer went on to note that some funds had been received from the General Fund and some were from fees. Chairman Collins stated that most people might be surprised that the Heritage Program accomplished as much as they did.
Chairman Collins asked Mr. Clemmer what the difference was between the Amargosa Toad and the Buffalo Lakes Toad in the panhandle of Texas. Mr. Clemmer stated that one jumped farther than the other. The Amargosa Toad actually had shorter legs, so they tended to crawl more than hop. They were, Mr. Clemmer explained, different species of toads. Chairman Collins noted that in Beatty the toads would not have as far to get to the water. Chairman Collins then thanked Mr. Clemmer for the excellent presentation.
Assemblyman Marvel asked Mr. Clemmer if they tried to identify invasive species. Mr. Clemmer noted that the Heritage Program did not; they did try to follow meetings concerning those but they did not track them. Mr. Marvel noted that there might be some competition from the invasive to the species that needed protection. Mr. Clemmer agreed. He went on to note that their ecologist had been doing some satellite imaging work on cheat grass. Basically, Mr. Clemmer explained, they tried to keep up and had not ventured into the invasive species work.
Chairman Collins asked if there were any other questions and there were none. He then reminded the Committee that two trips had been planned. The first was March 10, 2003, at 12:30 p.m., leaving for Douglas County to visit ranches, dairies, and recycling plants. The second was April 25-26 to Eastern Nevada for a tour and then return either to Las Vegas or Carson City.
Chairman Collins next called Roger Van Valkenburg, State Executive Director for the Nevada Farm Service Agency. Mr. Van Valkenburg explained that the Agency was under the United States Department of Agriculture, and they delivered a multiple number of programs directly to farmers and ranchers throughout the state. A packet of detailed information was distributed to the Committee members (Exhibit K). He noted there were seven field offices across the state with the headquarters in Reno. The various programs could be grouped into four general categories.
The first category would be Income Support Programs. That included direct payments to farmers who grew commodities, such as wheat and barley. If prices were low, they could be provided with additional payments, depending on a national formula. They also provided loan programs for farmers to receive some income and to put their crops under loan until market prices were such that they could profitably market those crops. The Loan Deficiency Payment Program was a sister program to that. Mr. Van Valkenburg stated that a payment could be given to them for the difference between the market price and a target price. He believed they were gambling on the market conditions. The wheat and barley commodity programs were involved in the Loan Deficiency Payments Program, and some miscellaneous products were included, such as wool and honey.
The second category was the conservation programs. Most of those programs were delivered in conjunction with other agencies, such as Natural Resource and Conservation Service, a sister agency to the Department of Agriculture. They provided the management of the program and the technical assistance, and the Farm Service Agency provided administrative functions and distributed checks. There were also some other smaller programs, such as Wildlife Habitat Incentive Program (WHIP) and Stewardship Incentive Program (SIP). The goal of all those programs was to help farmers and ranchers protect the quality of water and wildlife habitat, and to control erosions on their farms and ranches.
The third general area of programs, explained Mr. Van Valkenburg, were loan programs. The Farm Service Agency actually made direct loans to farmers and ranchers, primarily to help them either become established or expand their operations. They also provided emergency loans. Nevada has had a number of emergencies, primarily drought. This program allowed the farmers and ranchers to recover their operations or restructure their debt so that they could stay in business, Mr. Van Valkenburg opined.
The last general area was the disaster programs. Those were the biggest dollar programs that the Agency delivered on a continual basis. One of those programs was the Emergency Conservation Program, designed to return damaged land and related areas back to their pre-disaster condition. After the floods a few years ago, the Agency did a lot of work rehabilitating the land. Another program was the Livestock Compensation Program, which rehabilitated the grazing areas in the eastern part of the state after fires destroyed fences. The Livestock Compensation Program was delivered last fall, which was a "per head" payment for livestock. They paid ranchers a payment to help them buy feed, stay in business, and continue their operations.
The federal budget, Mr. Van Valkenburg noted, included an additional $3.1 billion in drought aid for United States farmers, and the highlights of that program were included in the packet that had been distributed to the Committee members.
Mr. Van Valkenburg ended his testimony by noting that the Farm Service Agency provided over $10 million in direct payments to Nevada's farmers and in addition, approximately $6.8 million in loans were made. He stated he would take questions from the Committee.
Chairman Collins noted he had just become aware of the Livestock Compensation Program working with St. George, Utah, and asked if that was a partner program. Mr. Van Valkenburg agreed that there was a partner program. He stated that Clark County was actually serviced under the St. George, Utah, Farm Service Agency office. He noted that the west side of the state, Alpine, Mono, and Inyo Counties, were serviced out of the Minden, Nevada, office.
Chairman Collins asked how much could be explained about the killing of chickens in Las Vegas. Mr. Van Valkenburg explained that had been done by a sister agency in conjunction with the United States Department of Agriculture (USDA). Chairman Collins asked if the St. George, Utah, agency would have more information, and Mr. Van Valkenburg explained that the Farm Service Agency itself was not directly involved. Chairman Collins asked if it were USDA because it concerned international disease, and Mr. Van Valkenburg agreed. Chairman Collins stated he understood there were nearly 250 U.S. Forest Service Officers who came from Bear Lake, Idaho, to Las Vegas to kill chickens a few weeks ago, to be sure Newcastle disease did not spread. Chairman Collins stated he found it odd that those officers were in Las Vegas instead of out in the rural sections of the state.
Assemblyman Claborn stated that for every bird that had been killed, the owner had received $75.
Assemblyman McCleary asked if there had been $10 million in subsidies to the farmers in Nevada and Mr. Van Valkenburg agreed. Mr. McCleary asked if that was taxable, and Mr. Van Valkenburg stated that in 90 percent of the situations, it was taxable. Occasionally there might be an exception because of disaster provisions in Internal Revenue Service law.
Chairman Collins asked if Conservation Reserve Programs (CRP) were done in Nevada and how big they were. Mr. Van Valkenburg stated that the Agency did have the program, but unfortunately, in Nevada it was not a well-utilized program. The primary problem with that program, he felt, was the federal regulation that the rental rates the agency provided was based on dryland value. Therefore, if your land was irrigated, you would have to protect your water rights in some other format, so it was not attractive to the farmers and ranchers in Nevada. The Farm Service Agency had tried to change that program but had had no success.
Assemblyman Geddes asked about the reference in the members' packets concerning a new farm bill and the money, and if it was just a one-page document. Mr. Van Valkenburg stated it was just a synopsis of the program; the actual bill itself was some 20-30 pages long. Mr. Geddes requested a copy for the Committee, and Mr. Van Valkenburg agreed to provide one.
Chairman Collins questioned Mr. Van Valkenburg about the Livestock Compensation Program and how $18 for a full-grown cow had been arrived at. Mr. Van Valkenburg explained that in Washington, D.C., a calculation was made starting with the available money divided by the number of original livestock that were in designated counties. Then that number was prorated based on adult cows, young stock, and sheep. The Nevada Department of Agriculture had rushed to be included in the program because of the late notification by Washington D.C.
Chairman Collins thanked Mr. Van Valkenburg for his excellent presentation.
Assemblyman Conklin reported that to the best of his knowledge, the minutes of February 5, 2003, were acceptable. Assemblyman Atkinson concurred.
ASSEMBLYMAN CONKLIN MOVED THAT THE MINUTES OF FEBRUARY 5, 2003 OF THE COMMITTEE ON NATURAL RESOURCES, AGRICULTURE AND MINING BE APPROVED.
ASSEMBLYMAN ATKINSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Collins asked if there was any other business and noted there was one Committee BDR available for this Committee. He had been committed to Assemblyman Carpenter who had until Monday, February 24, 2003, to present his bill.
There being no further business, Chairman Collins adjourned the meeting at 3:26 p.m.
RESPECTFULLY SUBMITTED:
Erin Channell
Recording Secretary
Patricia Blackburn
Transcribing Secretary
APPROVED BY:
Assemblyman Tom Collins, Chairman
DATE: