MINUTES OF THE meeting
of the
ASSEMBLY Committee on Natural Resources, Agriculture, and Mining
Seventy-Second Session
March 17, 2003
The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:30 p.m., on Monday, March 17, 2003. Chairman Tom Collins presided in Room 3161 of the Legislative Building, Carson City, Nevada, and via simultaneous videoconference, in Room 4401 of the Grant Sawyer State Office Building, Las Vegas, 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.
Note: These minutes are compiled in the modified verbatim style. Bracketed material indicates language used to clarify and further describe testimony. Actions of the Committee are presented in the traditional legislative style.
COMMITTEE MEMBERS PRESENT:
Mr. Tom Collins, 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:
Mr. Jerry D. Claborn, Vice Chairman (excused)
GUEST LEGISLATORS PRESENT:
Assemblyman Lynn Hettrick, District No. 39
STAFF MEMBERS PRESENT:
Linda Eissmann, Committee Policy Analyst
Erin Channell, Committee Secretary
OTHERS PRESENT:
James Settelmeyer, Chairman, Nevada State Conservation Commission; Chairman, Carson Valley Conservation District
Kevin Piper, District Manager, Dayton Valley Conservation District
Dan Kaffer, USDA Natural Resources Conservation Service Coordinator; Western Nevada Resource Conservation and Development Council
Paul Pugsley, Carson Valley Conservation District
Pam Wilcox, Administrator, State Lands Registrar, Division of Conservation Districts, Division of State Lands, Nevada Department of Conservation and Natural Resources
Steve Walker, Walker and Associates
Doug Busselman, Executive Vice President, Nevada Farm Bureau Federation
Jacob Snow, Regional Transportation Commission of Southern Nevada
Norma McCusker, Sales, Berry-Hinckley Industries
Rose McKinney-James, Legislative Representative, Government and Community Relations Division, Clark County School District
Derek Morse, P.E., Deputy Executive Director, Regional Transportation Commission
John Sande, Western States Petroleum Association
Joe Johnson, Government Affairs Consultant, Toiyabe Chapter, Sierra Club
Daryl Capurro, Managing Director, Nevada Motor Transport Association, Inc.
Peter Kreuger, Nevada Petroleum Marketers and Convenience Store Association
Chairman Collins:
Assembly Natural Resources, Agriculture, and Mining Committee is called to order. [Roll was called.] I failed to recognize during our Subcommittee meeting this afternoon, we had some Native Americans here, and others who had some issues with Mr. Mortenson’s bill. I just wanted to recognize them; I understand they didn’t have a chance to see the amendment earlier, but we wanted to recognize you and thank you for signing in and hope that you can talk to a couple of people who are figuring out how to find that language. I apologize for not recognizing everyone that signed in during the Subcommittee, but that will be in the minutes.
Assembly Bill 215: Revises provisions governing conservation districts. (BDR 49-780)
Chairman Collins:
We’re going to start next with Assembly Minority Leader Lynn Hettrick’s bill, A.B. 215. We’ll open that hearing at this time.
Assemblyman Lynn Hettrick, Minority Leader, Assembly District No. 39 (Douglas County and portions of Carson City and Washoe County):
[Introduced himself] A.B. 215 is a bill that was brought to me by the Conservation Districts in the state of Nevada. In 1937, in Nevada statutes, the Conservation Districts were allowed to acquire and own land. Somehow in the reprint of NRS [Nevada Revised Statutes], when it was done, that language disappeared. There is some disagreement as to why; there was some comment that perhaps it disappeared because it was unnecessary or perhaps it disappeared just because it got dropped out in error. They’re really not sure why, but staff went back and looked at it and said “it was in there in 1937” and nobody ever voted anywhere, that they can see, to take it out; and now it’s gone.
Section 1 of this bill adds the language back that essentially was in the law in 1937. It’s just allowing them to acquire property; maintain, administer, and improve property; receive income from property; sell, lease, or otherwise dispose of property. In fact, two conservation districts actually own property at this time. Because it’s not listed in the law, there’s some question about whether or not that can be done. So this would also be taking care of that.
Initially when we talked about this bill with the conservation districts, they said, “You know, we really are not trying to not pay tax on land, if we get it.” But after some discussion about this, back and forth with staff, State Lands [Nevada Division of State Lands], and the conservation districts, we would like to strike everything from the end of the word “pastures” on page 2, Section 2, downward. They are political subdivisions of the state of Nevada, and they should be exempt from paying taxes. We would be having a political entity pay tax to a political entity. Just strike that; that’s the existing language. What we’re adding is the word on line 11 “conservation.” Everything below line 14, at the end of the word “pastures,” would just be stricken.
Chairman Collins:
The whole rest of the page, except for the effective date?
Assemblyman Hettrick:
Correct. Since it wasn’t in bold, I neglected that, but you are correct. We have several people here from conservation districts, and Ms. Wilcox from State Lands [Nevada Division of State Lands], if you have questions about that.
Assemblyman Carpenter:
I know that when the Department of Wildlife, when they get a piece of property, then they pay taxes on it. Do you think that if we exempt the conservation districts, they’re going to come in and try to get out also?
Assemblyman Hettrick:
Assemblyman Carpenter, I don’t think so, and the reason I say that is if you look at Section 2, lines 8-14, there is a list of exemptions already. What we’re specifying is that conservation districts are included; this is for districts. You see “drainage or reclamation district or town in this state….” What we’re doing is clarifying, again, that this is a district that is exempt from taxation. No, I don’t think that NDOW [Nevada Division of Wildlife] would qualify as a district; therefore I don’t think they could qualify under this law to be exempt from taxation.
Assemblyman Carpenter:
I guess that districts, they’re probably going to – on the other hand they might get a large piece of land, if somebody wants to give it to them.
Assemblyman Hettrick:
It’s possible, yes, that they would get a large piece of land. Given that they’re conservation districts, and we’re trying to do a lot of preservation of open space in Nevada, it would seem to me that that would be appropriate. How long they would want to hold that land and that type of thing would be the question.
Assemblyman Goicoechea:
Just a follow-up on where Assemblyman Carpenter was headed, NDOW, when they come into a particular county to acquire a piece of property, the Board of County Commissioners can either vote “yea” or “nay” on it. Maybe that would go a little bit towards where Assemblyman Carpenter is coming from. I’m almost certain no Board of County Commissioners would take an action against an entity they typically fund, at least partially fund. Maybe there would be an instance where either a large grant or through some mechanism they were acquiring a piece of property that maybe the county would feel better about if they did have a mechanism to at least have payment in lieu of taxes on, or something along those lines. Very similar to what NDOW has got in place.
Assemblyman Hettrick:
I understand the point. I’m not sure if you pass this law in the way it’s written now you could charge them payment in lieu of taxes. You might be able to say you don’t want them to acquire the land, if you wanted to make it conditional upon the Board of County Commissioners approving it somehow. I would point out again, I don’t think NDOW [Nevada Division of Wildlife] would qualify because this section of law that we’re putting this into, and again lines 9-14, says “Nevada Rural Housing Authority or any county domestic municipal corporation, conservation, irrigation, drainage or reclamation district. . . .” That’s not NDOW, so they wouldn’t qualify to not pay taxes. Now if you want to consider whether or not you want property to go off the tax roll before it goes to the Conservation District, that’s another question.
Assemblyman Goicoechea:
I was just using NDOW as an example of how that program works. I’m just trying to find some language that might satisfy Assemblyman Carpenter and maybe we would look for the Board of County Commissioners to have the opportunity to say “yes” or “no” on the acquisition.
Assemblyman Hettrick:
This language was exactly what was in, and might be modernized a bit, but it’s the language that was in in 1937. There was no language at that time about taxes. It was not “payment in lieu of” or anything else. What’s happening here is, unfortunately, because I didn’t get to take this bill back down and have it redrafted without you seeing Section 2, it’s bringing a question to your mind. The reality is, we’re putting it back the way it was in 1937, and not changing any of that. They were tax exempt then; they would be tax exempt now. The “payment in lieu of” was something they said, “We understand the concern, and we’d be at least open to that.” But after we had some discussion, with Legal [Legal Division] and State Lands [Division of State Lands], they said, “It doesn’t seem to make sense to us,” and they’re here to testify that you would have a political subdivision pay tax. That’s why I came to you and said I thought we should just remove Section 2.
Assemblyman Goicoechea:
Just strictly for clarification, a conservation easement is not tax exempt, typically, as they’re acquired now, are they?
Assemblyman Hettrick:
I’ll let the conservation districts tell you whether or not that works out in every case, because I can’t answer that question.
Chairman Collins:
Other states, all over the country, have these conservation districts. How are we different from them?
Assemblyman Hettrick:
Let’s get the people from the conservation districts; they’re the experts on this. I brought the bill for them to try to take care of this problem as to whether or not they can own land.
Chairman Collins:
Any other questions for Assemblyman Hettrick? I’ll grant you the option then whether you want to stay throughout the hearing or if you want to go to your Committee. It’s up to you. Because of the way this copies through, and some people don’t write hard and some do, I’ve got Pam Wilcox, Steve Walker, Dan Kaffer, Kevin Piper, Paul Pugsley, and James Settelmeyer. Is there anyone else signed in to speak on this bill that I don’t have?
James Settelmeyer, Chairman, Nevada State Conservation Commission; Chairman, Carson Valley Conservation District:
I want to thank you for the opportunity to hear us on this issue today. [Introduced himself] What came about with the issue and need for this is, currently, there are two conservation districts that own property. The question comes up, in all actuality, it’s likely they may be in default or be illegal at this time for their ownership of said property. This would help clarify it for them. Also, under the issue, if we ever, for some reason, got lucky enough as conservation districts to have someone appreciate us enough to bequest us some property, land, or money, we really can’t accept any property at this time. That also brought forth the issue.
As Assemblyman Goicoechea had mentioned, the issue that really brought this to the forefront was the idea of conservation easements. To my knowledge, from the readings and research that I’ve done, conservation easements are not a taxable interest on the land. The individual who owns said land at this time would still retain ownership and pay into said tax base. The conservation easement is an interest in land, and as such, currently, the conservation districts cannot hold them. There are many local ranchers, agriculturalists, or individuals who are interested in conservation easements, who may not necessarily trust the BLM [Bureau of Land Management], Forest Service, or other federal regulatory agencies to hold said easement; they don’t trust them in the monitoring or police of said easement to ensure that they’re in compliance.
[James Settelmeyer] Many of them have come to us and asked us, “Is there any way that your entity – we trust the conservation district – to hold that conservation easement as an interest in land?” At this point in time, we’ve had to turn them away and say, “No.” This would allow conservation districts to hold that easement and, in all the situations that have been discussed so far, with holding said conservation easement, we would be granted a sum of money from them for the monitoring of that. That’s what really brought the issue to the forefront on this matter.
In that respect, there are some handouts from the State Conservation Commission (Exhibit C).
Kevin Piper, District Manager, Dayton Valley Conservation District:
[Introduced himself] In working with the Carson Valley Conservation District, this was something that was brought to our attention, as far as not being able to own property, from the stand point that in our local community, we had the ability to enter into an agreement where we would be given the opportunity potentially to manage a conservation easement. But based on the way that was being set up, from a local standpoint, we could not do it or find clarification in the existing NRS [Nevada Revised Statutes] to favor that.
We set out to try to clarify it through this particular bill so that districts had the opportunity, if those came along, to potentially own or manage a local piece of property. We feel that conservation districts are set up, since they’re made up of local elected officials, that in most instances have a good knowledge of the local resource base would make good managers, if you will, of said local property. Again, we’re in favor of this bill and are in favor of the corrections made before you today. Thank you.
James Settelmeyer:
The only other thing that was asked by the State Conservation Commission, is after line 4, after the word “may” to add “in furtherance of the purposes and provisions of this chapter,” just to help clarify and bring it up to modern wording.
Assemblyman Hettrick:
That’s line 4, page 1, after the word “may” – “in furtherance of the purposes and provisions of this chapter.” So they would only own land for the purposes of this chapter, or acquire property in any case. That just clarifies what it’s about.
Kevin Piper:
Just briefly, I would like to introduce Mr. Dan Kaffer who is here to speak. Mr. Kaffer represents the Natural Resource Conservation Service in the Western Nevada Resource Conservation and Development Council, and we’ve requested that he be here on behalf of the Conservation District to speak and answer questions regarding this bill. Thank you.
Dan Kaffer, USDA Natural Resources Conservation Service; Coordinator, Western Nevada Resource Conservation and Development Council:
[Introduced himself] I serve as the Coordinator for a 20-member organization of elected officials in western Nevada called the Western Nevada Resource Conservation and Development Council. That includes six county governments, eight conservation districts, three tribes, and three large water districts. That organization is in support of anything that can assist the conservation districts with owning lands and with conservation easements. For years we’ve supported conservation easements as a viable way to protect ag [agriculture] lands and protect our private lands in the state of Nevada. The organization is very supportive of that.
I have to put on another hat, and I brought it with me, this is USDA Natural Resources Conservation Service [United States Department of Agriculture], of which I am an employee. Currently in the 2002 Farm Bill, $497 million was allocated for the Federal Farm and Ranchland Protection Program. That program is making that $497 million available to states across the nation that want to help protect ranches and farms using conservation easements as a tool to protect those ranches and farms. It’s important through that legislation that there be local entities who can hold conservation easements, manage them, and administer them. Conservation districts across the nation have been seen as one of those entities that could hold, manage, and steward those conservation easements.
From a standpoint of your federal programs that are out there that could help Nevada, and can help Nevada ranchers protect private lands across the state through conservation easements, this is very positive support of USDA programs.
Paul Pugsley, Carson Valley Conservation District:
[Introduced himself] I’ve been tasked by the District to establish a Conservation Easement Stewardship Program. The Program requires the capability to monitor conservation easements in perpetuity. As we’ve gone through those issues to try to establish that capability, it becomes clearer and clearer that to have an interest in a conservation easement would be to our benefit, as an attempt to steward that conservation easement in time. The current statutes don’t permit that with the Conservation Districts, and it becomes a concern that I try to alleviate, perhaps by contract but which would be much easier to alleviate if we had the opportunity to be co-holders in a conservation easement. On behalf of the Conservation District, we would be for the amendment before you.
Pam Wilcox, Administrator, State Lands Registrar, Division of Conservation Districts, Division of State Lands, Nevada Department of Conservation and Natural Resources:
[Introduced herself] I serve as executive secretary to the State Conservation Commission. The guys did a really good job presenting this; I really have only a couple of minor things to add. One is that someone asked what other states do. I couldn’t swear I know what every other state does, but when I go to national meetings with conservation district people, they’re all surprised that the Nevada Districts don’t have the authority to hold land, because it’s a basic part of district programs, holding conservation lands and conservation easements. I certainly recommend that you put back in this language that somehow got lost in the 1950s from the original 1937 statute, and restore it.
Mr. Settelmeyer gave you a copy of the amendment that was discussed at the Conservation Commission meeting. It suggests that Section 2 be deleted in its entirety. The change that was suggested by Assemblyman Hettrick to only delete lines 15-35 in Section 2 is a much better way to do it. Rather than deleting Section 2 in its entirety, if you would only delete lines 15-35 in Section 2, that would be great.
Chairman Collins:
You’re going to be the executive secretary and administrator of this under their guidance.
Pam Wilcox:
I have been since 1980.
Steve Walker, Walker and Associates:
[Introduced himself] Walker and Associates represents Douglas County, Lyon County, and Carson City. I have a note to support this bill, but I was unaware of the amendment that took the “in lieu of tax” payment away. I think it would be remiss to say that we support it without my constituents knowing that that was taken away, being that they are the taxing authorities. Right now I would be neutral on the bill. I would answer Assemblyman Goicoechea’s question about taxation on conservation easements. I have written conservation easements and title does not transfer; it would stay as taxable lands, typically in an agriculture rate. Thank you.
Assemblyman Carpenter:
I think it’s important that we have a ruling. I thought someone else said that the conservation easements aren’t going to be taxable, and now you’re saying that they are taxable.
Steve Walker:
Conservation easements in which I have participated in Bridgeport Valley, which is in California, the title of the land did not change. It still stayed with the ranch and they did pay taxes because the title didn’t change. It basically bought the development rights away from the land, but did not change the title.
Chairman Collins:
In other words, the county could still tax it, but the conservation district would not double tax it. That was the intent I believe. Are there any more questions for Mr. Walker? Is anyone else wishing to speak besides Mr. Busselman?
Doug Busselman, Executive Vice President, Nevada Farm Bureau Federation:
[Introduced himself] When the bill was first scheduled, I didn’t plan on speaking to the bill. But that was before we found out about the proposal to take away the “in lieu of taxes” provisions that were in the bill. I would very strongly urge the Committee to seriously consider whether that is a change that they would like to make or not. It’s possible that if all of the ranchers and farmers in the state of Nevada deeded their property to a conservation district, or districts, they would still be able to perhaps continue ranching and all of the other things on their private property, but under the provisions that you’d change, there would not be any taxes levied. I think it’s a very serious thing that you need to look at, in terms of whether you want to go in that route or not.
As Assemblyman Carpenter has pointed out, when the Nevada Division of Wildlife acquires property, they do in fact continue to pay local taxes. It was our understanding when this bill was being proposed that that would be the case because that’s the way the bill was written. I think that with rural counties facing the challenges of tax revenue, that we want to be very careful before we take away any of their tax base.
Another thing that I think we need to look at, if you’re going to take the time to look at that tax question, there’s been a lot of discussion about taking the property and using it for conservation purposes. I don’t know whether that would continue the land, farming, and ranching or not, or what “conservation use” is. Is “conservation use” basically doing nothing with the land? The bill itself does not speak to any kind of restrictions. Maybe it would be in the restrictions of transfer, that that would be spoken to, or maybe it’s something you need to look at putting in the legislation.
When we first saw the bill, we didn’t have a concern. We don’t want any misunderstanding that we are not supportive of conservation districts. However, when you start putting in provisions that take away any tax for local governments, that does start raising a few issues.
Chairman Collins:
If I understand you, if it was a situation where the existing landowner continued to own it, they would pay taxes; but if it actually became the ownership of a conservation district, then the taxes would no longer be there. Is that your interpretation?
Doug Busselman:
That would be the concern that we would have. Based on the way the bill is written, and when you remove that “payment in lieu of taxes” provision that was spoken to, then there wouldn’t be anybody paying taxes on that property.
Assemblyman Goicoechea:
Typically, conservation districts today hold personal property or equipment. They are tax exempt, and they carry exempt tags. I’m getting a little bit confused because you can’t have a dual standard saying, “You’ll pay on your buildings but not on your equipment.”
Pam Wilcox:
That’s correct; conservation districts are exempt from sales taxes and all of the other taxes. They are locally elected subdivisions of state government directly analogous to school districts and general improvement districts, and all those other special purpose districts out there. I’m a little surprised at Mr. Busselman’s thoughts; that’s a little paranoid, by my way of thinking. I cannot imagine private property owners, ranchers, wanting to deed their property over to a government entity, in some kind of a scheme to get out of paying taxes. I just think that districts are locally elected subdivisions of government, the same as all of those others out there, and there’s really no reason to discriminate against them. They’re elected to do their jobs, to be responsible to the people, they’re accountable for the way in which they expend their funds, and they would hold property. I think we can trust the people and the people they elect.
Assemblyman Goicoechea:
I agree, but it just depends on how high these taxes get, right, Mr. Busselman?
Doug Busselman:
If I might, we’re not here to say that the conservation districts should not own property. Our point is that if they do own the property, that as the bill was written, there are provisions that clarify that they will pay “in lieu of taxes.” We’re here to suggest that the Committee seriously consider whether you want to continue to have those taxes being paid and going to local governments, or whether you want to go with the proposal and to remove that requirement of having to pay taxes.
Assemblyman Marvel:
Ms. Wilcox, how much land is actually owned by conservation districts, do you know?
Pam Wilcox:
Not much. The Conservation District in Lamoille has owned for many years, probably since before the 1950s, a type of grange hall that’s in the downtown area of Lamoille. It was donated to the District many years ago and they keep it open for public events, farm meetings, things like that. The Lincoln County District has owned for several decades the office building which is the Agricultural Services Center; it’s a modular office building in Caliente. Generally, districts are not in the land business; they’re in the conservation business. If someone comes to them and says, like the programs that Mr. Pugsley and Mr. Piper were describing to you, that these districts now in urbanizing areas are being approached by the ranching community asking if they would be willing to be involved in holding conservation easements. The ranching community is typically leery of having conservation easements held by land trusts and land conservancies, but they do have a lot of trust for the conservation districts.
Assemblyman Marvel:
But the land would go off the tax roll.
Pam Wilcox:
The land would stay on the tax roll; the district would only hold the conservation easement.
Assemblyman Marvel:
I think you’re doing that in Douglas County, or thinking about it.
Pam Wilcox:
Thinking about it.
Assemblyman Marvel:
There is a major problem.
Chairman Collins:
If you took ownership of the land, instead of it just being an easement granted, that would take it off the tax roll.
Pam Wilcox:
They would be an entity of government, the same as if the school district owned the land for an educational purpose. That’s correct.
Assemblyman Marvel:
I really don’t envision that happening.
Pam Wilcox:
The districts don’t have a revenue stream to buy the land. The districts are going to be taking donated conservation easements, or other conservation kinds of interests or land.
Chairman Collins:
You could take those easements now, but can’t own the property outright.
Pam Wilcox:
They can’t even take the easement.
Chairman Collins:
You can’t even take the easement now, that’s part of the intent of this; that’s the intent of this.
Pam Wilcox:
That’s right.
Chairman Collins:
It’s more an easement than an outright land ownership.
Pam Wilcox:
That’s what I see the future is holding, more easements.
Chairman Collins:
It is similar to what Mr. Hague was here explaining to us why that easement was public land.
Assemblyman Marvel:
I think what they’re trying to do is preserve the integrity of the land. And keeping it green, you might see an open space but at the same time giving the public some type of access to it.
Chairman Collins:
Nonfamily, nonresidential.
Assemblyman Goicoechea:
It’s more of a comment than anything. Having sat on the Board of County Commissioners for a number of years, typically you’d just be trading dollars anyway, because the counties do, in fact, support and fund a portion of their conservation district. I’m sure if they didn’t want them to acquire it, they could make adjustments in the budget process.
Pam Wilcox:
The state provides grant funds to conservation districts, and you’d really just be taking money out of one pocket and putting it in the other.
Assemblyman Mortenson:
Mr. Busselman, do you agree, if the conservation district accepts or has an easement, that the taxes will still be paid by the person that owns the property.
Doug Busselman:
Yes, it’s my understanding that under a conservation easement process, the land owner maintains ownership of the land with certain restrictions on how they might use their land. The easement itself would continue to have the property, although at a reduced value in all likelihood, and would be owned by the private sector, as opposed to a transfer.
Assemblyman Mortenson:
And the private sector would pay taxes?
Doug Busselman:
That is correct. If we are going to go the route that says it’s only going to be from gifts and other kinds of things, then why do we need in the statute to have the ability to purchase, exchange, lease, or other things that are spelled out in terms of the authorities that are granted under the law? Again, the law says what you decide it should say. It’s our contention that if they continue to own the property, and right now it’s only a couple of buildings, but they’re also excluded from having any other lands. If they get more lands, then shouldn’t they continue to have to pay taxes?
Chairman Collins:
So the Conservation District being allowed to “sell, lease, or otherwise dispose of any of its properties. . .” is an issue?
Doug Busselman:
The issue we’re asking is, do you for certain, want to have that tax-free status, or whether you want to continue, as the bill was originally written? The proposal was that they were going to continue to pay “in lieu of taxes.” If you want to change that, then you can do with the bill as you wish, but we would seriously question whether that would be a good idea or not.
Assemblyman Marvel:
One of the things you have to be careful of is, particularly in Douglas County where there’s a lot of pressure on this agricultural land, that just by granting easements you still preserve the agricultural usage. Sometimes overzealous assessors want to put it into a special land use, and that takes away the agricultural valuations and that special land could be anything. At least it maintains an agricultural use.
James Settelmeyer:
Addressing what Mr. Busselman had brought up, why the addition or the discussion of property or real property. Currently there are some questions because of what was left out in previous matters when legislation came in. Do conservation districts legally now hold – let’s say their equipment – and if they sell or buy more, are they in violation of the law? So some of that brings in the background of why that particular aspect was brought in, to help make sure we are legal, in essence.
Chairman Collins:
So you’re addressing real property not land, or improvements, or equipment?
James Settelmeyer:
The equipment that the conservation districts currently own – the question that came in, and that’s part of the reason it came into this – is just to make sure that we still own it or that it’s legal for us to do what we currently, unfortunately, do.
Chairman Collins:
He’s talking about trucks and what not versus real estate.
Doug Busselman:
Our point of view is speaking to the property of land and large tracts of property.
Assemblyman Marvel:
Moving back to what Mr. Carpenter is worried about – past history has been, usually when the Division of Wildlife takes property out, they usually take it out in large acreages, like in Mason Valley and that area where they take ranches off the tax rolls. This is one of the reasons we insisted on the “payment in lieu of taxes.” I don’t think the Conservation Districts are going to be taking these large acreages off the tax rolls. Maybe you have a point, as far as protection goes to local governments, but that was the reason we did it for Wildlife.
Assemblyman Carpenter:
I think we have to be very careful with this, because in eastern Nevada, where we’re getting the pressure from is large tracts of land going to the federal government. Out there, a lot of the hullabaloo is created by the ranching and agricultural community. I think we have to be very careful that we grant them some kind of exemption; then on the other hand, we’re all upset about the federal government. Then the Trust for Public Lands and entities like that, I don’t think we change the law, but they’re nontaxable. I’ve heard a lot of comments about them taking lands off the tax rolls and they shouldn’t be.
I think we have to be very careful about this, if it would just be the school house in Lamoille, which is used for all kinds of public purposes, and that’s a different deal than maybe they someday will get a large tract of land deeded to them. If they’re going to be able to take that off the tax roll, I think we’re going to be up for a lot of criticism, especially in eastern Nevada. If we’re talking about these agricultural easements, we can probably put that right in the bill that the landowner continues to pay taxes on those things. I do have some worry about it, because it’s kind of hard, like I said before, to give them an exemption on one hand and then on the other hand agriculture is the first one that says bad things when we give these lands to the federal government.
Pam Wilcox:
Could I comment on Assemblyman Carpenter comment? I really think that’s a good comment. We’re facing a future in which things are different in many ways. We’re facing a future in which the federal government is acquiring additional lands, a future in which we are subject to urbanization and lost agricultural lands. One of the strengths of the Conservation District Program is that these are the people who are our neighbors, whom we have elected and whom we trust to make these decisions for us. They’re not people from out of state, they’re not the federal government; they are people that we can entrust with making those decisions with us about the future of our lands. That’s one of the strengths of this bill, that it does put the responsibility and the accountability, where I believe it should be.
Assemblyman Carpenter:
I don’t have any problem with that. They’re my neighbors and I think they do great work, but I think we need to be very careful before we start giving them tax exempt status because I can just see the next outfit coming in is going to be NDOW [Nevada Division of Wildlife] and who else. Taking Assemblyman Goicoechea’s idea a little further is, that County Commissioners, if they want to give them a tax exempt status on something, let them take the heat. If they want to come in and exempt the Lamoille schoolhouse, that’s fine, but someday we might be talking about prime pieces of property that people are not paying taxes on. The local governments are in a real bind.
Chairman Collins:
Thank you, folks. Assemblyman Hettrick, did you get away? Do you want to have some closing comments?
Assemblyman Hettrick:
I’m glad I waited. I thought this was a simple bill; put the law back the way it was, and they were tax exempt before. If you’re going to put in “in lieu of taxes,” no conservation district can pay it. They have no cash flow, they don’t have any money coming in to the conservation district except money granted to them by the county and the state, except in a very few rare exceptions, and it’s a tiny amount of money. They’re really not interested in owning property, per se, unless it was some little sliver of land probably along some well, or if they were given a water right someplace or an interest in some easement, or whatever. I don’t think they have an interest in owning any of that stuff.
The fact is, I don’t really think it would make much difference except that the Conservation Commission, I guess, voted that they didn’t think that it’s appropriate for a political subdivision to pay taxes, and when you’re just trading the dollars from one political subdivision to another. I don’t disagree with that; I think they’re right. At the same time, I guess I look at this and say: if you put “in lieu of taxes” on there, all they’d ever take was an easement because they could never pay the taxes. I think that’s kind of a shame, they might get deeded to them somewhere along the way 50 acres; something like that wouldn’t change the counties revenue at all, but might hold 50 acres until they could dispose of it and make a profit and help run their own operation. I don’t know; I understand the concern. I’m one of the first ones always to support the rural counties in maintaining their tax base. I just don’t think this is going to have an impact on the rural counties’ tax base.
Chairman Collins:
Thank you, Assemblyman Hettrick. Does anyone else wish to speak on this before we close the hearing on this bill? Assemblyman Hettrick, I’ll let you be the one who fixes this thing and then bring it back to us; we’ll wait to hear from you. We’ll close the hearing on A.B. 215 and we’ll open A.B. 237.
Assembly Bill 237: Revises provisions relating to use of alternative fuels by certain fleets of motor vehicles. (BDR 43-796)
Chairman Collins:
There are many people coming up here wanting to speak in the next 10 minutes, so we’re going to ask you to not be repetitious.
Assemblyman Jason Geddes, Washoe County Assembly District No. 24:
I will be brief, I’ve handed out a written testimony (Exhibit D) that covers most of the points I wanted to cover today. The main points I want to get out in here is that the Environmental Protection Agency issued a study, last May, on diesel engine exhaust. In that study, they concluded that the long-term inhalation exposure of diesel exhaust is likely to pose lung cancer hazard to humans, as well as damage to the lungs in other ways, including exacerbation of existing allergies and asthma symptoms.
As the current law is written, diesel fuel is included in the Alternative Fuel Program. My proposal is to remove low-sulfur diesel from the Alternative Fuel Program and replace it with a few options, as listed in the bill. There are a couple of key points I want to make in here. One, the Administrator of the Division of Environmental Protection has a program set up through the Environmental Commission through NAC 486A [Nevada Administrative Code] to administer this program. My bill in no way is intended to usurp his authority to approve fuels that go into that list or change that program. I think it’s a great program and it’s working well; this just aims to get the low-sulfur diesel out of there.
Secondly, on page 2 [Exhibit D], you’ll see the fiscal notes that I wanted to address. I don’t think they’re quite available yet, but when the estimates went out, some of the estimates came out quite high, and there’s two reasons for that. If you read through NAC 486A and the way the bill is administered, it only applies to those vehicles that are acquired on a 90 percent acquisition rate. So every city, county, and state fleet that has more than 10 vehicles, when they buy vehicles, 9 out of 10 new purchases have to meet the requirements of this program. They are not required to convert their existing fleet over to these fuels at this point in time. The estimates you’ll get back will have that conversion in them so they’ll be much higher than they should be. The hope is that everybody will want to switch over in the benefits of good air quality, and they’ll do so sooner than they need to, but they’re not required to.
[Assemblyman Geddes] On the third page [Exhibit D] you’ll see a list of amendments. I brought the bill forward and to LCB [Legislative Counsel Bureau]; I got it out to several individuals who are interested and got some comments back from the RTC [Regional Transportation Commission] in Washoe and Clark Counties, and there are representatives from them here today. The Division of Environmental Protection, and actually the Section 2 and Section 3 came from Chevron/Texaco, and I feel I should have caught those since I used to administer the ASTM [American Society for Testing Materials] for the state. I should have referenced them in that section.
Also, you’ll see an amendment to Section 8, it should be the same in Section 7. We have a Section 7 that is set to sunset, and then Section 8 takes effect.
I’d be happy to yield the rest of my time to the experts in the audience, including Dr. Sagebiel, who was on my graduate committee, and is an international expert in diesel fuel emissions.
Chairman Collins:
Any questions for the sponsor of the bill? Seeing none, and due to the fact that we might lose our videoconference, I’d like to go to Las Vegas next.
Jacob Snow, Regional Transportation Commission of Southern Nevada:
Thank you for the opportunity to testify in favor of this bill. We have not had the chance to see the proposed amendments, but we have been on the phone and at this point in time, absent the chance to review them in detail, we are generally in support of this proposal. We have been pushing and leading the transit industry for the past seven or eight years in alternative fuels. We’ve made a very heavy investment in compressed natural gas and are in the process of ordering 49 forty-foot coaches that are powered by compressed natural gas.
Just as a quick aside, with diesel fuel at $1.20 a gallon on the wholesale market, and $.56 for the equivalent gallon for compressed natural gas, it’s certainly in our interests to continue to pursue that alternative fuel program. We will be continuing to follow up with hybrid electric fuel for our light rail type system, the Metropolitan Area Express, and we look forward to working with this Committee and continuing to track this legislation as we insert what we feel are realistic emission standards into the bill that will allow us the certainty that we need to go forward.
[Jacob Snow] We ultimately will be converting to ultra-low sulfur diesel this fiscal year at a cost of $1.3 million over what it is now. There is a cost to clean air. In terms of the Regional Transportation Commission of Southern Nevada commitment to improving air quality here in southern Nevada, we are on board with this bill and the spirit that it is given and look forward to continuing to improve mobility options that improve air quality here in southern Nevada.
Chairman Collins:
Are there any questions for Mr. Snow? Seeing none – is there anyone else down in Las Vegas wishing to testify? I only have one person signed in to speak. Are those just support for you, Mr. Snow?
Jacob Snow:
I think I’m the only one.
Chairman Collins:
Thank you for your patience as well. Assemblyman Geddes, if you want to yield the chair, I’ll bring some more folks up from here. I think I only have one person in opposition. Did I call your name?
Norma McCusker, Sales, Berry-Hinckley Industries:
You didn’t, Mr. Chairman, but I’m Dr. Dotty Merrill [Washoe County School District] for the afternoon. She asked me to sit in for her with your permission. [Introduced herself] It’s probably good for me to start because we come from the point of view of the fuel supplier and some of the questions that these two have had may be able to be answered by some of the things that maybe I can answer for you also. I also have handed out a biodiesel fact sheet (Exhibit E) that you should have available with some information, in case you’ve got some questions on it.
We do support A.B. 237 and also with the amendments, just for the record. We appreciate the need to keep our air clean and at the same time minimize the cost impact to government fleets. I’ve done some analysis; we do a lot of biodiesel right now in the Washoe County area. B5 versus B20 will save about 11 cents a gallon, so there’s quite a savings that’s available to the local fleets that could help, especially considering how budgets are impacted. It will minimize the cost to them to go to a biodiesel.
There are no changes necessary in fuel infrastructure or in vehicles in order to go to B5, and I can answer any specific questions. Currently, the people that I’m aware of that are doing B20 are UNLV [University of Nevada, Las Vegas], City of Reno, Washoe County, State of Nevada, and several private fleets that we’re currently servicing through Berry-Hinckley. We’re also working on a project with UNR [University of Nevada, Reno] and as of a week ago, we have a project underway with Lander County School District. Lander County contacted us because of the statute NRS 387.335 [Nevada Revised Statutes] that allows bond money to be used for school buses if fueled with biodiesel or CNG [compressed natural gas]. Lander County wanted to take advantage of that.
I’m available to answer questions.
Chairman Collins:
Ms. James, I had you in opposition. Have you changed your position?
Rose McKinney-James, Legislative Representative, Government and Community Relations Division, Clark County School District:
[Introduced herself] In response to your questions, based on the way that the bill was drafted, and because of potential fiscal concerns, we did sign in in opposition. I was hoping to have the benefit of some of the additional testimony to see if that might influence our decision. I did, however, speak to Dr. Merrill. There was some confusion and we’d like to gain that clarification so that we can determine how best to represent our clients’ interests on this measure. I think I’ll defer to the representative from the Washoe RTC [Regional Transportation Commission], and with your permission, comment after some additional testimony is provided.
Derek Morse, P.E., Deputy Executive Director, Regional Transportation Commission:
[Introduced himself] Included in the mission of the RTC is that we create and operate the mass transit system in Washoe County. We are the owner of a fairly large fleet of vehicles that are impacted by these regulations, and so therefore we do have an interest. The transit industry has been a leader nationwide in innovating, developing, and proving clean air technologies. The Nevada transit industry is also a leader in this field.
The RTC converted our carrier transit fleet to CNG over a decade ago. We have worked with major diesel engine manufacturers throughout the country to develop new technologies. We are, in many cases, the real world test site for some of these technologies. We most recently completed a program with Detroit Diesel that has led to new equipment and technology that’s being built into all their new vehicles that has the potential – more than the potential, the actual result of significantly increasing fuel economy and decreasing nitrous oxide emissions.
We do support the principles underlying A.B. 237, although this bill will cost us, in our estimate, about another $200,000 a year in fuel costs. When we convert our fleet to a fuel, the whole fleet goes. We can’t just do it for 10 percent of the fleet – those vehicles we’re acquiring new – so there is a fairly high price involved. Nonetheless, we think this is a worthy goal; we do support it. We are very pleased to see finally that there are emissions-based standards regardless of fuel types that are being introduced into this legislation and into the program. We think that’s a very important step.
When I say we do support, there is one caveat, that we just received the amendment today with the new emissions standards. A cursory glance at it looks like these would be good standards, but we want a little bit more time to look at those. But as I said, we do support this in principle; we think it is a fitting piece of legislation for moving us forward.
Chairman Collins:
We’re going to wrap it up. Do you have any questions for these folks, anyone here? I’m going to call up a few more folks, and then that’s all we’ll do today because we have to adjourn and let these folks go to their next meeting.
John Sande, Western States Petroleum Association:
[Introduced himself] I’m with the law firm of Jones Vargas. We are supportive of the bill.
Joe Johnson, Government Affairs Consultant, Toiyabe Chapter, Sierra Club:
[Introduced himself] We’re in support of the bill and Kaitlin Backlund asked me to speak for her. Her father had a doctor’s appointment.
Daryl Capurro, Managing Director, Nevada Motor Transport Association, Inc.:
[Introduced himself] We had some concerns with the bill as it was originally drafted in Section 9. I’m sure Assemblyman Geddes understands that. But the new language appears to resolve those issues with us. I would point out one thing that you need to keep in the back of your mind. Although the EPA [Environmental Protection Agency] did adopt the standards for 15 parts per million to take effect in July of 2006, they originally were going to approve that 100 percent. It is now 80 percent has to be ultra-low sulfur diesel by July 1, 2006; the rest of it not until 2010. It does murk up the waters a bit, but essentially, other than that, we’re in support of the bill.
Peter Kreuger, Nevada Petroleum Marketers and Convenience Store Association:
[Introduced himself] Ms. McCusker said our part; we support her and the bill.
Chairman Collins:
We’re about to run out of time, so I’d ask the sponsor of the bill to work out your amendments and get everything clear and present that to Ms. Eissmann [Committee Policy Analyst] for a work session.
Assemblyman Carpenter:
To anybody, and maybe Ms. Eissmann knows the answer, does this apply to only the fleets of school buses and that, or does it apply to every trucking company?
Assemblyman Geddes:
It applies to every city, county, and state fleet of more than 10 vehicles in Washoe and Clark County. No private.
Chairman Collins:
Is there anything that needs to be brought before the Committee before we adjourn, any last minute questions? We’ll have some minutes read and reports back next meeting? Any other questions for the good of the group? We’re adjourned. [Adjourned at 3:34 p.m.]
RESPECTFULLY SUBMITTED:
Erin Channell
Committee Secretary
APPROVED BY:
Assemblyman Tom Collins, Chairman
DATE: