MINUTES OF THE meeting
of the
ASSEMBLY Committee on Natural Resources, Agriculture, and Mining
Seventy-Second Session
April 7, 2003
The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:30 p.m., on Monday, April 7, 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.
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:
None
STAFF MEMBERS PRESENT:
Linda Eissmann, Committee Policy Analyst
Erin Channell, Recording Secretary
OTHERS PRESENT:
Tim Carlson, Legislative Advocate, Global Renewable Energy Partners, and C&A
Doug Hunt, Habitat Bureau Chief, Nevada Division of Wildlife
Joe Johnson, Legislative Advocate, Sunrise Sustainable Resource Corporation, Toiyabe Chapter/Sierra Club
Bill Bradley, Member, Nevada Board of Wildlife Commissioners
Dan Schochet, Vice President, ORMAT Nevada, Inc.
Alfredo Alonso, Legislative Advocate, Caithness Energy
Ellen Allman, Caithness Energy
Alan Caldwell, President, Sierra Concepts, Inc., Minden
Russ Fields, President, Nevada Mining Association
Michael Stewart, Owner, Empire Energy
Doug Ponn, Legislative Advocate, Sierra Pacific Power Company, Nevada Power Company
Allen Biaggi, Administrator, Nevada Division of Environmental Protection
Doug Zimmerman, Bureau Chief, Bureau of Corrective Actions, Division of Environmental Protection
Tony Sanchez, Legislative Advocate, Landwell Company
Michael Bailey, Legal Counsel, Landwell Company
Stephanie Garcia-Vause, Legislative Advocate, City of Henderson
Ray Bacon, Legislative Advocate, Nevada Manufacturers Association
Karen Kennard, Executive Director, State Emergency Response Commission
Richard Mirgon, Co-Chairman, State Emergency Response Commission
Chairman Collins:
The Assembly Committee on Natural Resources, Agriculture, and Mining is called to order. [The secretary called roll.] We have a quorum, and we have a full committee. Let’s take care of loose ends first. Mr. Christensen, are you ready to give us a report on your Subcommittee?
Assembly Bill 287: Revises provisions relating to transfer, establishment and maintenance of certain parks. (BDR 26-657)
Assemblyman Christensen:
We met last week, and we have a recommendation to Do Pass A.B. 287.
Chairman Collins:
The Committee received back from the Subcommittee unanimous support of A.B. 287, as written without that amendment. Are there any other subcommittee reports?
Assembly Bill 447: Makes various changes concerning management of solid waste. (BDR 40-492)
Assemblyman Conklin:
Your Subcommittee on A.B. 447 met on Thursday of last week with some proposed amendments from the Nevada Department of Environmental Protection (NDEP) that we worked into the bill. We voted unanimously to recommend to this committee to Amend and Do Pass. I believe there will be a mock-up today with those amendments (Exhibit C).
Chairman Collins:
Please show Vice Chairman Claborn excused, if he doesn’t make it.
Assemblyman Conklin:
I would like to hold over A.B. 447 until Wednesday, if possible.
Chairman Collins:
[Acknowledged Assemblyman Conklin’s request.] We will not go any further on that today. We will go to Mr. Marvel’s A.B. 372.
Assembly Bill 372: Requires person who develops or operates renewable energy generation project to obtain permit from Division of Wildlife of State Department of Conservation and Natural Resources under certain circumstances. (BDR 45-908)
Assemblyman John Marvel, Humboldt, Lander and Washoe Counties, District No. 32:
At one of our public lands meetings I was approached to see if I had a BDR (bill draft request) available. We were discussing renewable energy resources. At that time I had loaned a BDR to Mr. Carlson who is associated with wind energy. He is going to have someone from the Division of Wildlife with him today. With your permission, I’ll defer to Mr. Carlson. [The Chairman agreed.]
Tim Carlson, Legislative Advocate, Global Renewable Energy Partners, and C&A:
Assemblyman Marvel was kind enough to respond to a request we had in regards to this particular bill at a public lands meeting we held about four months ago. For a little history about A.B. 372, the portfolio standard, which passed last legislative session, created a lot of issues regarding how we get renewables into the system to benefit our citizens. Many of the activities that we worked on through the contractual arrangements with the power company, Sierra Nevada Power, and the PUC (Public Utilities Commission), have been well explained during meetings you’ve attended.
I’d like to address the reason for this particular bill. It is a process that needs to be standardized throughout the industry. In developing renewable projects we affect a lot of things: we affect people’s lives; we affect animal lives; we affect wildlife. I think some of those concerns and issues are brought up through processes we go through in relationship to an EIS (environmental impact statement) or in relationship to an EA (environmental assessment) or in processing a particular application or a particular site that we are trying to develop.
A year and a half ago, Global Renewable Energy Partners were in the throes of developing a wind farm near the Nevada Test Site. We spent several million dollars trying to develop a 300 megawatts wind farm. The Air Force, in the last couple of weeks, stopped the process, which was very frustrating. At the same time, we are in the process of developing on a site just south of Las Vegas called Table Mountain. We had some concerns from the citizens of Sandy Valley and some residents around that area regarding the project. We also had concerns from the Nevada Department of Wildlife (NDOW). Those concerns were with animal habitat and issues we were dealing with on that particular site. Those concerns should have come sooner, which would have prevented us from spending monies that could have gone to other areas. Because of a lack of communication and because of a lack of an actual industry base, we were not that familiar with the process. We are basically pioneering in the state of Nevada with renewable resources. Large companies come, and we don’t have a pattern and position in place so we pioneer to this issue.
We felt that we were doing the right thing. We went to meetings with the Wildlife Commission. We tried to help them understand what our process was and what we were in need of in regards to development. We kept getting responses from them saying, “We need this, this, and this,” and all of these things were adding costs to our project. It didn’t seem like anybody had a good handle on what was required of a project as it developed in Nevada.
[Tim Carlson continues.] It became very apparent to us that it was adding more costs to our project, which was upping our energy costs, which disallowed us from being awarded a Nevada Power RFP (request for proposal). Therefore, we lost out on a power purchase agreement from Nevada Power because our costs were too high. Another wind company came along – a company that had done very few studies and hadn’t gotten any environmental process – and underbid the process and Sierra Pacific Nevada Power did the right thing by choosing the right cost and the right bid. The problem is there is no set formula as to what a developer needs to do when he comes into this state, and how he should develop that project.
That’s what this bill helps us do as an industry. We will have an ability to understand exactly what the needs of the Division of Wildlife are. We pay a $500 permit, which is unusual for an industry to promote the establishment of such a fee. What we’re trying to do is to get to a point where we have consistency all the way along. If we develop five or ten different wind farms throughout the state of Nevada, we want to have consistency. We want to know what it’s going to cost us; we want to know what the permits are; we want to know what the costs are. We, in essence, want to have a partner in that process, and the Division of Wildlife wants to be a partner in the process. They don’t want to be the “bad guy” in this situation. They want to have an ability to understand what our needs are and how we can develop those needs through this process. So we pay a $500 permit fee, plus we pay a certain mil rate based on the energy we are actually producing.
As far as a fiscal impact on our project in Ely, which is a 50 megawatt project, this will cost us somewhere in the neighborhood of $4,500 plus the $500 permit fee, making it about a $5,000 annual fee that we will be paying to the Division of Wildlife for their monitoring process. Granted, our project in Ely is on a private parcel of land, and we really wouldn’t have to do this if it was, in any other state of mind, on a private piece of land. But we feel it’s important that we support the Division of Wildlife in these issues, so they can accumulate these dollars and solve the problem of how they view and how they understand the process of protecting the wildlife of this state. There is no better way to level the playing field than to support the process, instead of fighting the process.
In summing it up, this bill helps us to become partners: the industry with a state agency that has the oversight responsibility.
Assemblyman Marvel:
What is it going to cost you on the project per kilowatt hour?
Tim Carlson:
50 megawatts.
Assemblyman Marvel:
How much will it cost?
Tim Carlson:
How much will it cost in developing the site?
Assemblyman Marvel:
Per kilowatt hour, what would the cost be?
Tim Carlson:
We’re looking at about $1 million to $1.5 million. About $1 million per kilowatt hour.
Assemblyman Marvel:
If I were buying power from you, what would it cost me per kilowatt hour?
Tim Carlson:
I can’t tell you that. That is a redacted statement out of the PUC. We’re somewhere between 3.5 cents to 4 cents per kilowatt-hour. I can give you a range; I can’t give you an actual figure. That’s a good price for a stable, and it’s a 20-year contract, and . . .
[The Chairman asked whose amendment was distributed. Mr. Carlson responded it was his and Mr. Hunt’s amendment (Exhibit D).]
Assemblyman Carpenter:
The way I read the amendment, it is really broad. “Death to any wildlife in this state or any adverse effect to any habitat.” You have to get the permit, and, perhaps, they would hold you up, and your project might not go forward even if it would harm one poor little bird. I don’t want to see any wildlife harmed, but it seems to me that this is really written very tightly.
Tim Carlson:
The issue is that they can do that without this piece of legislation. The state agency, as well as the federal agency, can do that without this particular bill. What we are trying to do is bring some solidity and cooperation to the process, so that we have an agency within the state that benefits from the development of a project versus having to fight the battle every time a project comes on board. You are right; we could be held up. But, by making them a partner in the process and having them understand that they’re going to get a benefit from this project, I think the attitudes, feelings, and cooperativeness will increase immensely, and we will have a state agency that wants to see development of these things in various areas. Therefore, we’ll see more of them. You must understand that this renewable industry is made up of many environmentalists. That’s why they’re in this industry. Renewable industry is an environmentally sensitive position, but we want to do the right thing. I think that is the right thing, and that is creating partners within the state agencies to accomplish this goal.
Assemblyman Carpenter:
Where is your project in Ely?
Tim Carlson:
We have an agreement with the landowner. We have a PUC-approved power purchase contract of 50 megawatts. We have about a year and a half’s worth of wind data, and we need another eight or nine months. By September of this year, we have to make a final decision as to whether or not we go forward. Our biggest concerns are the wind availability. We are finding very good reports in regard to that from the five anemometers we have up presently. It will come down to financing and whether or not the financial community feels comfortable enough to lend us the many millions of dollars to build a project based on the contract we’ve signed with the power company.
Assemblyman Carpenter:
I guess you don’t want to say where it is, but that’s okay.
Tim Carlson:
It’s on the Ruth/Robinson Mine.
Assemblyman Mortenson:
I see some sort of a conflict of interest. I’m all for renewable energies; I love it. I think it’s a wonderful endeavor, but when the money goes to the agency who is responsible for okaying it, I would rather see that money go to the General Fund. If it goes to the agency that approves the permitting, it seems like it’s not the right thing to do.
Assemblyman Goicoechea:
I have a couple concerns. First, it’s on private property. Again, the only species that I believe NDOW truly regulates on private property would be T & E or threatened and endangered. The second is this. If it were on public lands, NDOW would already participate as a cooperating agency in the EIS or the EA that would be involved in that process. As I look at this bill, from the outside, it looks like it’s almost duplication or another layer of bureaucracy, especially if it’s on public lands.
Tim Carlson:
We are trying to bring the Division into the process. Our state is owned to a large extent by the federal government. The state agencies sometimes get pushed out of the way. They don’t get notified in the proper manner. Meetings are held and state agencies aren’t brought into it until they actually have to be there to help them understand what’s going on. I think there is a tremendous amount of that. What we are trying to do is alleviate that. The industry gets caught in the middle. You have a federal agency here that is going forward with an EIS and a state agency is trying to play catch-up all the time; it makes it a pressure cooker.
Basically, we are an industry that gets caught right in the middle of that process. We become the bad guy because it’s our project. The federal agency and the state agency sit there and throw things at the industry to protect themselves and to show they are doing their jobs and doing it correctly. The industry, or the developer in this case, finds himself paying a lot more money up front, rather than trying to spread it out over the process. All we’re trying to do is spread it over the term of the project itself, which I think would lessen the effect, and bring the state agency in right from the very beginning. When you deliver the permit, they’re involved in it, and they’re a part of it.
Assemblyman Goicoechea:
I will wait for NDOW as far as a response from a cooperative agency.
Doug Hunt, Habitat Bureau Chief, Nevada Division of Wildlife:
[Introduced himself. Spoke from prepared testimony (Exhibit E).] First, I would like to thank Assemblyman Marvel for his continued insight and concern for Nevada’s wildlife with the introduction of A.B. 372. This bill will set in place a proactive program to not only protect Nevada’s wildlife and their habitats, but to encourage the development of renewable energy in the state in a manner consistent with the needs of our wildlife.
This bill has come before you today following nearly two years of evaluation, monitoring, and study of potential effects of renewable energy projects on wildlife. In cooperation with Tim Carlson of the Governor’s Renewable Task Force, the language of this bill has been crafted to meet both the needs of wildlife and the renewable energy industry. The goals set out in the bill would provide consistent, across-the-board policies for renewable energy developers and assist the developer up front and would result in a more cohesive development environment while protecting the state’s wildlife resources.
[Doug Hunt continues.] This bill is modeled after similar legislation passed in 1989 that has, for the past 14 years, protected wildlife and assisted the mining industry in developing environmentally sound projects. NRS (Nevada Revised Statutes) 502.390 provides for the protection of wildlife from industrial artificial ponds. The highly successful program developed by the Division of Wildlife and the mining industry has all but eliminated wildlife mortalities associated with mining artificial ponds. In 1986, for example, the effects of cyanide solutions on waterfowl were little understood with the subsequent loss of significant numbers of birds in the early years of the rebirth of mining in the state. The Division and the mining industry confronted the problem head-on and were successful in reducing mortalities by greater than 98 percent in the past 14 years, a success in anyone’s book.
Today we have three biologists statewide who are responsible for the industrial artificial pond permitting and evaluation. The annual permit and assessment fee supports the wildlife/mining program as well as providing funding for special wildlife protection projects such as the Pallid Bat bat gate project recently completed in Humboldt County in cooperation with Apollo Gold, the Nevada Mining Association, and Bat Conservation International.
This legislation is a proactive attempt by the Division and the renewable energy industry to create the same success in protecting wildlife and their habitats in Nevada.
The bill sets in place a concise permit and assessment process and will document any required mitigation for impacts on wildlife habitat early on in project development. This will encourage communication with renewable energy developers early on in the siting process to ensure that wildlife and their habitats are protected, and the project developer is aware of and can deal with wildlife needs from the outset. Mitigation, if required, would be consistent with Commission Policy 62, which seeks to involve the project proponent in on-the-ground projects for wildlife rather than creating a “bank account.” This policy has worked well with the mining industry and resulted in the protection and rehabilitation of thousands of acres of wildlife habitat, particularly those burned by wildland fires.
Assemblyman Carpenter:
What harm to wildlife would come from various forms of renewable energy like the wind farms and geothermal? There has been a lot of geothermal permitted, so that must be taken care of.
Doug Hunt:
Our concerns center around two basic areas: 1) physical contact with towers, blades, super structures’ cooling towers, those types of things; and 2) habitat fragmentation, which is a critical issue that has come to light in the last few years. Terrestrial game species, bighorn sheep, mule deer, birds such as sage grouse, and any of the sensitive species of mammals, reptiles, and amphibians are our main concerns.
Assemblyman Carpenter:
Have there been any problems with any of the geothermals that have been developed?
Doug Hunt:
Not that I’m aware of. Several of the geothermal plants are permitted under our industrial artificial pond permitting process. They requested that they be permitted. We have had a good working relationship with the geothermal folks for the last ten years.
Assemblyman Goicoechea:
As you talk about the projects and the last ten years and also the work you’ve done with the Nevada’s mining industry, I assume most of that was done through the EIS (environmental impact statement) process and the mitigation was reached through EISs or EAs (environmental assessment) that were done on those projects?
Doug Hunt:
We do work with the land management agencies and the EIS and the environmental assessment process. In some instances, mitigation is developed through that process. We also have the Industrial Artificial Pond permitting process. This provides funding through the regulations, which allows us to service the industry by determining projects for wildlife by looking at the most important habitats and to work with the industry to make sure that wildlife is always at the forefront.
Assemblyman Goicoechea:
What concerns me is its impact on alternative energy on every level, all the way from a small hydro project to whatever, whether it be on private property or public lands. If Mr. Geddes is successful with some of his bills and we get net metering, technically you will be affecting even those small hydro projects that are completely held on private property. That’s where my real issue is with the bill and the attempt to have those people fund this.
Doug Hunt:
The bill, as it’s written, does not affect the hydro projects or small individual projects.
Assemblyman Goicoechea:
I was under the impression that, at the point you had net metering and it went on line, that would become a sale, a semi-commercial venture.
Tim Carlson:
We would omit the net metering activity. We don’t say that directly, but there is a size here that is affected by not having the small power, the family user, involved in the process. They would not have to get a permit. We’re looking for that now, where it says that.
Chairman Collins:
Noncommercial.
Tim Carlson:
Noncommercial. Right.
Assemblyman Goicoechea:
They are in the original bill and, as I look through the amendments, I don’t see where it has either been included or excluded.
Doug Hunt:
It’s under Section 2 (1)(a), “The development or operation of the renewable energy generation project…is for a purpose other than personal or noncommercial use.”
Assemblyman Goicoechea:
I would respond that, at the point you sold anything back, you become commercial. Through net metering you would. I think it’s pretty hard to split that hair.
Tim Carlson:
It was not our intent to have that part of the bill in relationship to how you are interpreting it. Maybe we just need to make that a little clearer that residential users do not have to apply for a permit and do not have to go through the cost of paying the Division a fee for the amount.
Assemblyman Goicoechea:
Again, there are a number of hydro projects, especially in my district in central Nevada that people are looking at. They’d be on private property and could develop 20, 30, 50 – they could generate significant power, enough to run their ranching or farming operation or, at least, a component of it. I submit to you that in the wintertime, as they return that back, it’s going to look sizeable. It’s not a resident category at that point. It is a business. Would they be affected by this and pay the 35 mils?
Doug Hunt:
It was not our intent to affect those developers, and, if that’s the case, we need to make some changes.
Chairman Collins:
I have 20 people who want to talk on this, and we’re not making very much headway. You have a bill that wants to put the responsibility of renewable energy under the Department of Wildlife, and you want to charge 35 mils. Is that the gist of it? You haven’t got all the details ironed out yet? Did I miss something?
Tim Carlson:
We’re not trying to put the Division of Wildlife in the business of renewables. We’re trying to help the renewable industry comply with what the Department of Wildlife is asking as we develop projects. We’re trying to make the process consistent for all projects. In other words, we’re developing the process to include the Division of Wildlife in the beginning. That will benefit the Division and reduce the cost that they would ordinarily inflict on a project because they understand they will have the ability to study that project and the effect of that project through an ongoing process. It brings them in as a partner to the project versus a state agency that says, “You can’t do that,” or “You can’t do this.” It makes them a part of the process. That’s the gist of the bill.
Chairman Collins:
I’ve just been noticed that one of our assembly bills in this Committee has been withdrawn, so we can cancel the subcommittee tomorrow morning at 6:30 a.m.
[There were no further questions. The Chairman instructed speakers to sign in on the guest list. The Chairman invited other proponents to come forward.]
Joe Johnson, Legislative Advocate, Sunrise Sustainable Resource Corporation, Toiyabe Chapter/Sierra Club:
[Introduced himself.] This is a case of having two children: one is supporting additional funding for wildlife, and the other is opposing differential rates for renewable energy. My amendment (Exhibit F) simply deletes “renewable.” There is no reason to target renewable energy on impacts on wildlife and let fossil fuel energy sources not pay the fee and jump through the same hoops. What I have proposed is simply deleting every mention of “renewable” and referencing the existing energy project site determination that the Public Service Commission (PSC) does on all energy projects.
[Joe Johnson continued.] The PSC has an environmental review that interfaces with the wildlife agency. It is important to have the additional revenue. We ask them in EISs and other forms to evaluate and participate. They have the ability to assess mitigation measures, but it doesn’t cover the overhead of the operation.
Other than the changes that would be more inclusive, we would speak in favor of the bill and the process. We simply ask that the review and this new process would refer to all energy projects. I think we need to be aware of the problem Assemblyman Goicoechea identified that the bill, as written, is not exclusive for the small generator. We would need to have a section, which I haven’t included in the proposed amendment, addressing the issue of small customer generators.
Bill Bradley, Member, Nevada Board of Wildlife Commissioners:
[Introduced himself.] The Board of Wildlife Commissioners feels so strongly about this bill because we were first asked to evaluate a wind generation project on Table Mountain six months ago. In looking at that project we learned that, unfortunately, where the best wind is generated is the same place as where our desert bighorn sheep lamb. Despite the concerns of the agency that this would have a tremendous impact on the lambing process of bighorn sheep, no one bothered to bring that concern forward as part of the evaluation on the wind generation plant.
We feel very strongly that it is this Committee that regulates us and has demanded that we protect, promulgate, and enhance habitat for sheep and other wildlife. In doing that, we have to be sensitive to the impacts all of these projects have on our wildlife habitat. Consequently, we feel very strongly that, when and if a project is going to have the potential of affecting sage grouse, mule deer – I’ll be in front of this Committee in two weeks talking about fees and the sportsmen wanting us to increase the population of mule deer and sage grouse.
It would be inconsistent for me to say that this needs to have your attention in terms of making sure we mitigate. All we’re asking for, when one of these projects has the potential to affect wildlife, is to involve us in the planning. I think, based on our long and successful relationship with mining, this can be a “win-win” situation for both industries.
[Bill Bradley continued.] The other thing that I have heard in criticism of this bill is, “We’re already taxed. Put it in the General Fund.” You need to realize that the Department of Wildlife receives no money from the General Fund for big game. The only money that the Division gets from the General Fund is for non-game. Whenever one of these projects affects big game and bird populations, there is no money from the General Fund, so those tax dollars don’t help us one bit. In light of the fact that we’ll be here asking you for fee increases just to cover our increased program costs, this is very important to make sure that there is a mitigation plan that is worked out if it affects wildlife.
Dan Schochet, Vice President, ORMAT Nevada, Inc.:
[Introduced himself.] We are geothermal power plant developers. We have been in Nevada for 18 years. We have developed 750 megawatts around the world in 21 countries. We currently own and operate two power plants in Nevada: one at Brady Hot Springs at Exit 65 on Interstate 80, and another called Desert Peak, which is approximately six miles due east from the Interstate 80 corridor at the same exit. We are recipients of two power sales agreements from Sierra Pacific Power and Nevada Power under the RPS (Renewable Portfolio Standard).
My purpose in coming here is twofold. One is to provide you with information as to what the geothermal industry currently pays into various taxes and fees. The other is to say that we’re relatively neutral on the bill. As far as the bill is concerned, we consider it a privilege to live and do business in Nevada. Fish and wildlife are important assets to us. We have always been in the position where, if we developed a project, we mitigated and paid whatever fees were due. These were artificial ponds, et cetera. Geothermal doesn’t really occupy very large surface areas, so, as Doug Hunt said earlier, we don’t really recall any issues where we seriously affected fish and wildlife. Just to give an indication of what we currently pay, the Brady Project, which is 20 megawatts, has total revenues of approximately $9 million a year.
Chairman Collins:
Do you want in this bill or out of this bill? I’m missing the point.
Daniel Schochet:
We think the bill should either be such that the fees are paid by all electrical power generation, because all power generation has a comparable impact, or it should be such that the impacts are levied against the projects, which create the impacts.
Chairman Collins:
So you don’t care if the Department of Wildlife runs it as long as the 35 mils are collected from everybody? Or nobody?
Daniel Schochet:
If it were collected per project, it could be 35 mils or 50 mils. It wouldn’t matter so long as it were for that project only. If it were collected across the board for all power generation including fossil fuel, as well as renewable, it wouldn’t be 35 mils; it would be much less. Then it would be paid by everybody.
Assemblyman Carpenter:
So, if everybody paid it, that’s an increase on everyone’s electrical bill, right?
Daniel Schochet:
All power plants affect fish and wildlife. They all have ponds; they all have pipelines; they all have structures; and they’re all located somewhere out in the countryside.
Assemblyman Carpenter:
It would be a tax increase, right? It would increase everyone’s electric bill?
Daniel Schochet:
It would increase everyone’s electrical bill, but that’s what it’s going to be in any case.
Assemblyman Carpenter:
Not unless we pass it.
Chairman Collins:
Russ Fields (Nevada Mining Association), I have you down here as a neutral on this bill. I have several oppositions up here.
Alfredo Alonso, Legislative Advocate, Caithness Energy:
[Introduced himself.] Our opposition to this bill is very simple. I think that the policy that this Committee and this body made last session with respect to attracting renewable energy to the state of Nevada, in particular to the rural areas of the state, is in direct contrast to what this bill does. I would like to have Ellen Allman reiterate a little. I want to make it clear that if there is a problem with the existing law and how it works with respect to renewable energy, as opposed to other forms of energy, it has to be consistent across the board.
Chairman Collins:
It’s not existing in statutes. The proposed bill is here, A.B. 372. Tell us what you don’t like about it. Just go to that.
Ellen Allman, Caithness Energy:
[Introduced herself.] As Mr. Alonso was mentioning, we are a renewable energy producer, one of the largest on the West Coast. We generate 90 megawatts in the state of Nevada, and most of that is in rural areas. We have a 100 to 200 more megawatts potential of expansion. This bill, as written, might have a negative impact on that. We believe it’s counterproductive to the legislators’ goals of enhanced renewable energy.
The Division already has input to the permitting process through either NDEP (Nevada Division of Environmental Protection), BLM (Bureau of Land Management), or whatever lead agency under which the permit is being applied for. The addition of another layer of permitting requirements will just slow down an already lengthy process to begin project development and will add cost and scheduling risks to the developer. That, in turn, can be translated into potential delays in the implementation of the portfolio standard and potentially increase costs to the consumer. If our costs are increased, we might have to pass those on to the consumer. We also believe that the singling out of renewable energy and the assessment structure is unfair. That’s been mentioned before. If there is an assessment, why just renewable, and not all energy producers, or for that matter, other industries in the state?
In summary, the permitting on certain additional fees and assessments will ultimately translate to high costs for the ratepayer to implement the portfolio standards.
Chairman Collins:
Do you go through all the processes that a fossil fuel plant does to be able to generate electricity?
Ellen Allman:
I believe there are different types of permits that we need to apply for. Depending on the outcome, if there is a decision that we would have to go through, we will go through an EIS or an EA as required by the lead agencies.
Chairman Collins:
Do you have a different tax structure or a tax break or a benefit from coming with the renewable energy that a fossil fuel plant does not?
Ellen Allman:
As geothermal, no, not at the moment, as I understand it.
Chairman Collins:
I’m just trying to gain some information.
Ellen Allman:
There is no end to tangible production/drilling in tangible credits that we may sometimes take advantage of, but, no, in general there are no tax credits at this point for geothermal.
Alan Caldwell, President, Sierra Concepts, Inc., Minden:
[Introduced himself.] My company does predevelopment for large-scale wind farms, and we are the Nevada representatives for one of the foremost wind farm developers in the country. Dale Osborn, President of Distributed Generation Systems, Inc., has written a letter (Exhibit G) regarding this bill that he would like to have entered in the record. I will merge some key points from his letter with comments of my own.
Currently, under the Utility Environmental Protection Act (UEPA) process, the PUC (Public Utility Commission) makes the final call on the impact of any power-generating facilities on local wildlife carefully weighing competing interests. We believe the UEPA process works as is, and the Legislature should support the PUC in its role as the final authority on energy projects in the state. I have counted, under the Nevada State Clearinghouse procedures, 41 state agencies and offices that potentially might like to have additional fees, just like the Division of Wildlife. I would predict this legislation would open up a Pandora’s box if the precedent is established here.
Chairman Collins:
We’re not talking about Pandora’s box; we’re talking about one bill, one piece of legislation.
Alan Caldwell:
What I’m saying is that, if one agency can fund itself or fund itself additionally through this process, then the next legislative session, I could see other agencies . . .
Chairman Collins:
We’re not talking about the next legislative session. The voters asked for a 120-day session, so we don’t have a lot of time here. Just say, “I don’t like this bill.” Give us one, two, three reasons or four or five, if you could be that precise so that we don’t run late.
Alan Caldwell:
I do not like this bill as you’ve ascertained. This legislation would have a chilling effect on all renewable energy development in the state. The fees contemplated would ultimately result in higher energy prices for the consumer prices, which are already too high. In conclusion, I would urge the Committee to recognize that the regulatory process in place for the installation of renewable energy power projects is a good one and should be protected.
Chairman Collins:
What is the UEPA?
Alan Caldwell:
UEPA is the Utility Environmental Protection Act. There is NEPA, which is the National Environmental Protection Act, but UEPA is the Nevada version of the National Environmental Protection Act.
Russ Fields, President, Nevada Mining Association:
[Introduced himself and provided written testimony (Exhibit H).] The Nevada Mining Association was mentioned in testimony by Mr. Hunt from the Division of Wildlife. Indeed, we did work with the Division, back in the late 1980s and early 1990s, to establish a permitting program that has worked for the Nevada mining industry and has worked for the wildlife in the state of Nevada. My purpose here today and the reason I signed in as neutral is not to support the bill, especially the funding mechanisms of the bill and how it applies and so forth, but to support a framework of permitting that can be good for an industry that you’re trying to foster in the state.
Why would an industry be interested in promoting a regulatory or permitting program for itself and its projects? The answer is to provide a level playing field for all participants, to add certainty in terms of planning and budgeting, and to demonstrate to potential financiers limits on surprises in their projects. We found ourselves in a situation, in the late 1980s and early 1990s, in the mining industry, where we did, indeed, need a rational permitting program. We worked with the Division of Wildlife, and we got that. I think it has worked very well, as Mr. Hunt testified. As far as the funding mechanisms of the bill and how it applies, I have no comment on that. That’s why I am neutral. That is something to be worked out between the agency and the industry.
Assemblyman Carpenter:
What do you people pay in fees to the Department? Do you pay on a yearly basis?
Russ Fields:
Yes. There are annual permit fees for artificial ponds that are potentially toxic to wildlife. It is a graduated scale based on production and the size of the operation. It is one of our more expensive fee programs, but I don’t know what the total amount is. I can certainly get that for you if you like.
Assemblyman Conklin:
Who sets that fee that you were just speaking of?
Russ Fields:
These are questions that Mr. Hunt could answer far better than I could, but I think the Commission on Wildlife sets the fee for the most part. There may be a statutory fee.
Doug Hunt:
The fees are set by the Commission on Regulation, and they range from $0 to $10,000 per operation.
Assemblyman Conklin:
Is that set in statute or do you meet and determine the fees individually?
Doug Hunt:
That’s set by the regulation of the Nevada Board of Wildlife Commissioners.
Assemblyman Mortenson:
Does a condition exist whereby, if mining wishes to have a pond, the Division of Wildlife authorizes it and receives money, but if the Division of Wildlife does not authorize it, they don’t receive money? Is that the way it works?
Doug Hunt:
I don’t understand the question.
Assemblyman Mortenson:
The mining industry must get permission from you to establish a pond, right? [Received confirmation.] If they get that pond, they pay you a certain amount of money.
Doug Hunt:
That’s correct, based upon the amount of material that’s either moved on the mill site or the deep leach, so it’s based on the size of the mine itself.
Assemblyman Mortenson:
So, if you don’t award that to them, the Department does not get those funds. If you don’t award them the ability to do that pond, then you don’t get any funds from that pond. Right?
Doug Hunt:
That’s not exactly the way it works. The mining company comes to us with the proposal. We evaluate the proposal and its merits and recommend mitigation factors such as netting or material called “bird balls,” which covers the pond and prevents access by wildlife. Those recommendations are then incorporated into the permit, and the mine goes ahead with the process.
Assemblyman Mortenson:
I’m not trying to imply anything; I’m just trying to understand the process.
Michael Stewart, Owner, Empire Energy:
[Introduced himself.] I drilled the first geothermal well in San Emidio Valley in 1986, and we have a food processing business there and a geothermal business. I don’t like the bill. I think it singles out renewables. It should be spread out over all power generators, not just renewables. Each project is site-specific. I think it should be evaluated on a site-specific basis, and not blanketed across the board. Thirdly, I think it’s contrary to the best interests of developing Nevada’s renewable industries.
Doug Ponn, Legislative Advocate, Sierra Pacific Power Company, Nevada Power Company:
[Introduced himself.] Our position originally was neutral on this bill. If it’s a policy determination of this committee, and ultimately of the Legislature, that a fee like this should be assessed, and, if it’s the policy that it should be collected by the power company either through paying higher prices or otherwise from our customers, we have a long history of collecting those fees and collecting taxes.
However, after listening to the proposed amendments to this bill, which would include the power company, I think two of the Committee members have voiced our concerns. Mr. Goicoechea was concerned about another layer of bureaucracy in permitting. I think many of you are aware, when we try to permit a new power plant, it’s a very extensive project lasting two to three years. As one of the other witnesses testified, just in the UEPA process in Nevada, there can be as many as 41 agencies involved. The Department of Wildlife is one of those agencies that gets noticed and gets asked for input. If we are on federal lands, then we have an environmental impact statement or an environmental assessment. They also get copied on those applications, and they have the ability to participate in the process.
[Doug Ponn continued.] One final concern: I think it’s interesting that the bill first proposed an erroneous amount, but then was corrected to 35 mils. One of the witnesses said that if we make everybody pay, including the fossil fuel plants, we will lower that so the effect would be that the renewables propose the bill and say, “We’re magnanimous, and we’ll pay this fee,” but, then, once you spread it across the megawatt hours of all generation plants, their fee drops significantly. The fees of the power companies would increase proportionately, and we would collect it, as Mr. Carpenter pointed out, from all of our customers, like some other energy charges from previous sessions.
Chairman Collins:
Bringing the Department of Wildlife into the consistent treatment throughout the state on renewable energy is not a bad idea, but the other part you all have to work out. This bill has to pass by Friday, so you know what the concerns are. We’re not going to take any action on it today, but we’ll meet again Wednesday at 1:30 p.m. We can try to iron it out then. We’ll close the hearing on A.B. 372 and open the hearing on A.B. 485, which is a much simpler piece of legislation.
Assembly Bill 485: Revises provisions relating to relief from liability for certain persons regarding certain real property at which hazardous substance has been or may have been released. (BDR 40-776)
Allen Biaggi, Administrator, Nevada Division of Environmental Protection [NDEP]:
[Introduced himself and Doug Zimmerman, Chief, NDEP’s Waste Management Bureau. Provided written testimony (Exhibit I).] To sum up, the Division is in support of A.B. 485. The bill is modeled after recent federal Brownfields legislation (Brownfields Revitalization Act, HR 2869) that was signed into law by the President on January 11, 2002. The bill will enhance the state’s existing program for voluntary cleanup of hazardous substances and relief from liability program, which was championed by Senator Titus during the 1999 session of the Nevada Legislature.
For background, as you will probably recall from previous testimony earlier in the session, “brownfields” are vacant or abandoned properties that are vacant or underutilized due to perceived or real contamination from past use. Examples of these sites include former automotive, railroad, and light industrial areas. The main aspect of this bill is to provide incentives in the form of liability protection to bona fide prospective purchasers of these types of properties. The provisions would reduce the potential state and federal liability to these purchasers, but would not change the liability for cleanup that is ultimately placed on the polluter. By providing these incentives, we hope to encourage the cleanup and reuse of these properties and hopefully reduce urban sprawl.
[Allen Biaggi continued.] There are also significant public health and environmental benefits since the purchasers must exercise appropriate care with respect to any contamination found at a site. A.B. 485 adds two new categories of landowners to our existing law. These are innocent purchasers and contiguous landowners. The bill provides liability protection for these individuals provided they did not cause or contribute to the contamination. The bill also provides for recovery, by the state, of a portion of cleanup costs, if the state funded a cleanup effort at the property, and that cleanup increased the value of the property.
We believe that this proposed legislation is consistent with current federal requirements, enhances the existing voluntary cleanup program, and provides additional regulatory tools to encourage the cleanup of environmentally contaminated lands.
I also want to reference A.B. 74 that this Committee heard earlier in the session that established a “Brownfields” revolving loan program. Both bills modify the same statute and are complementary to one another.
Assemblyman Carpenter:
On page 2, it talks about the state and that it creates a lien. Starting on line 31, could you explain what that means?
Doug Zimmerman, Bureau Chief, Bureau of Corrective Actions, Division of Environmental Protection:
[Introduced himself.] In rare circumstances, when the state has to step forward and actually perform a cleanup, if, as a result of that cleanup, the property value is increased – the property now has more value because the contaminants have been removed – the state has the ability to put a lien for that increased value associated with the property. These would be very rare circumstances. I don’t believe we have had such a case in the history of our cleanup efforts.
Assemblyman Carpenter:
Would that mean that, if I were the owner of the property, and you cleaned it up, and it increased the value by $10,000 or $20,000, then, if I sold it, the state would collect the $20,000? Is that what we’re talking about?
Doug Zimmerman:
Yes, that is essentially what we are talking about. That increased value, as a result of the state’s cleanup efforts, would enable the state to put a lien on the property. The state would also have the ability to recover costs directly from you as the landowner, too.
Assemblyman Carpenter:
Is that in here also or is that in another legislation?
Doug Zimmerman:
That’s in our existing hazardous waste and water pollution control laws.
Assemblyman Mortenson:
If, by virtue of cleaning up this land, you increase the value of it by $20,000 but you only expended $10,000, would your lien be for $10,000 or would you go for the full $20,000?
Doug Zimmerman:
I believe it would just be for our actual costs.
Assemblyman Mortenson:
Believe or is it in here that it would be for your costs?
Doug Zimmerman:
It references the unrecovered costs by the state, so it’s costs actually incurred by the state.
Assemblyman Goicoechea:
I want to make sure that I understand the new language. It says if you are a “bona fide prospective purchaser,” or “innocent purchaser.” Does that mean that a person is waived, if they enter into a contract and didn’t realize there was an environmental concern on that property, that they wouldn’t bear any cost? Is that what that says? I like that language, but I don’t think that’s what it says.
Doug Zimmerman:
It’s not quite as broad as that. The person does get liability protection, but they still have to exercise what’s referred to in the law as appropriate care. They still have to assure that there is not a public health or environmental threat, but they aren’t required to do a full cleanup as if they were the party responsible for releasing the pollutants. But, they must exercise appropriate care and must make appropriate inquiries prior to purchasing the property so that they know what they are purchasing.
Assemblyman Goicoechea:
Then you would still have to do an environmental assessment before you bought the property and go through the same hoops that you currently do?
Doug Zimmerman:
Yes, you absolutely do.
Tony Sanchez, Legislative Advocate, Landwell Company:
[Introduced himself.] Landwell is the land development arm of BMI (Basic Management Inc.). What you have before you (Exhibit J) is a piece of legislation that is in Landwell’s interest. Landwell is in the process of developing a 2,300-acre master planned community, to be known as Providence, in the Henderson area. About 400 to 500 acres of that is contaminated, and Landwell is currently remediating that land according to all applicable state laws. In order to facilitate the development of that property through sales to merchant builders and homebuilders, Landwell believes this legislation would provide protections from state environmental liability for purchasers and lenders who purchase the property that has been cleaned up through an NDEP remediated, approved process.
The project itself is going to provide homes for approximately 25,000 folks in the Henderson area and 10,000 jobs in an in-fill development area, and it’s going to increase the tax base in Henderson by about $1 billion.
The legislation does protect innocent parties from liability. It encourages the redevelopment of “brownfields” sites. It doesn’t do anything other than introduce to Nevada the innocent party protections which were recently made part of the federal Brownfields Environmental Restoration Act of 2001. With me today is Dan Stewart, who is the president and NCO of Landwell, as well as of BMI. We also have with us Michael Bailey, who is an expert on “brownfields.”
Assemblyman Mortenson:
BMI has some land, which was contaminated, and you are going to clean it up?
Tony Sanchez:
They are in the process of cleaning that property up now.
Assemblyman Mortenson:
You are going to sell this to a developer and in the process of constructing a development, if it is discovered that the land isn’t cleaned up properly, then that cleanup will not revert back to BMI, but the state will have to clean it up? Is that what I’m hearing?
Tony Sanchez:
Landwell and BMI are still responsible for the cleanup of that property.
Chairman Collins:
The reason for this legislation is so a company can clean some contaminated property in the state of Nevada. The state of Nevada signs off that the cleanup is complete; there is no hazard left on that property. The state of Nevada gives the company a certificate of clean land. That then relieves the responsibility for any problem with that land from the state based on this increased available property. Yet the “cleaner upper” of the land will assume any problems 20 years later. The piece of property was cleaned up; the state signed off on it as being clean; and the developer built homes all over it. Twenty years from now, whatever happens: the trees die, the dogs die, the kids get purple hair, whatever – something happens. This land cleaner has been long gone. They’re up on their ranch in Star Valley or Colorado or wherever. Who is left holding the bag?
Allen Biaggi:
Ultimately the polluter is the responsible party for cleaning up this contamination. If, in 5, 10, 15 years, additional contamination is found, there are re-opener clauses and re-opener opportunities within this law and within existing VCP (Voluntary Cleanup Program) law that addresses unforeseen or unanticipated circumstances. Now liability is placed back onto the original party. In the event that the original party is no longer available, then that liability may be placed on successors down the chain of title. We go through the normal process of finding a responsible party. Ultimately, in those very unusual circumstances where there are no responsible parties left, the responsibility reverts either to the federal government, if it’s a very bad site, to the Super Fund law, or perhaps to the state under our environmental mitigation and restoration program.
Chairman Collins:
Successors would be those people who purchase the property?
Allen Biaggi:
It could be successors. It could be people who purchase the property, or others who manufactured or had other types of industrial operations on the property.
Chairman Collins:
The federal government had the first chance at all that ground out there. We have passed legislation around cleanups and around gasoline stations. Is this any different than what we allowed to take place in making those properties whole? This is just expanding it to a larger area? Is that kind of a simple summary?
Allen Biaggi:
Actually, what this does is formalize, into statutory language, the policies and procedures of the Division of Environmental Protection for the last 10 or 15 years. We have traditionally not held innocent purchasers of properties nor contiguous property owners liable for contamination they did not contribute to or cause.
Michael Bailey, Legal Counsel, Landwell Company:
[Introduced himself. Provided prepared testimony (Exhibit K).] I speak today in favor of A.B. 485. In the past two years a number of states have proposed or passed legislation, often modeled after the federal act, which provides the same opportunities for environmental protection at the statewide level. Those states include Virginia, California, and Michigan. Those are states that have looked to this type of act to assist in motivating in-fill development and reutilization of properties, which currently lie dormant or fallow. It is important, at this juncture, to explain what A.B. 485 does, and, more importantly, what it does not do.
What the bill does, as Director Biaggi stated, is limit liability, but only to the state of Nevada, for new purchasers, and only if they meet the definition of an innocent purchaser or bona fide prospective purchaser or a contiguous landowner. In order to qualify for any of those categories, the candidate needs to use both appropriate care, as Director Biaggi talked about, and, also, to use due diligence. That’s an important element of qualifying under those three categories. As he said, it encourages prospective purchasers to purchase and reuse properties. It increases the tax base, promotes sustainable in-fill development, and encourages parties to purchase contaminated land and clean up the land in order to achieve development goals. It also complements the voluntary cleanup program, which is currently in place.
What the bill does not do is it does not limit any tort liability of any party; it does not limit any civil liability of any party; and it does not reduce the liability of the seller – the seller remains obligated to the state.
You have received an amendment (Exhibit L), which cleans up a few sections of the bill and tracks the federal law.
Stephanie Garcia-Vause, Legislative Advocate, City of Henderson:
[Introduced herself.] We’re here to speak in support of A.B. 485, which will put the state in line with existing federal legislation. As a city, we have been working with Landwell on the Providence project that will ultimately sit on lands necessitating cleanup. The project will be developed in an older part of the city and will be an opportunity for in-fill development. It will be in close proximity to our redevelopment area in the downtown. We feel that support of this bill will ultimately lead to expediting the Landwell and Providence projects.
Roy Bacon, Legislative Advocate, Nevada Manufacturers Association:
[Introduced himself.] I have one single comment. “Brownfields” legislation is something that has been around for about ten years. It is a major step forward. Nevada has not had a lot of contaminated lands, but many places in the east have made major strides at doing redevelopment using “Brownfields” legislation like this to take areas that were contaminated, get them in the cleanup process, and get them into reuse in the process. The potential for what we’re doing is huge. We have mining sites scattered all over the country that still have liability associated with them. If we can find someone who is willing to work on the cleanup on those things, those could get turned around.
Chairman Collins:
If you go down behind where the Swanky Club used to be, you’ll find some homes that were built probably 15 or 16 years ago. These new homes put up some chain link here and screen doors there and whatnot. In about a year or so most of them turned green or some odd color. If we pass this legislation, you’re going to assure me that won’t happen in the future on any project that you sign off on?
Allen Biaggi:
We have been working with the BMI companies for approximately 20 years on cleanup of the complex. We have been working with Mr. Stewart of Landwell for 4 or 5 years on cleanup. This is the largest cleanup we’ve ever undertaken in Nevada. It’s one of the only cleanups of its kind, I believe, in the country where we are taking contaminated properties with these types of contaminants and looking to place residential construction units on them. We’re doing everything we can and that we can find as technically feasible and appropriate to address the cleanup on this property. That’s my commitment to you and to this Committee. We are doing everything scientifically valid and reasonably possible to ensure the long-term health of the residents who will live on these properties.
Chairman Collins:
The location I was talking about is on the other side of the power line road, so maybe it would never be a part of BMI. Mr. Zimmerman, are we in good hands?
Doug Zimmerman:
Yes. The way we do this project is we have to anticipate that there are going to be kids living on what were former industrial ponds, and we have to be able to assure each family that’s living out there that those kids can go in the back yard and eat dirt. That’s the level of scrutiny we put this to.
Chairman Collins:
A lot of Henderson kids used to play out in the area you’re going to clean up. Is everyone comfortable with the amendment? The Chair will accept a motion.
ASSEMBLYMAN CHRISTENSEN MOVED TO AMEND AND DO PASS A.B. 485.
ASSEMBLYMAN CONKLIN SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Claborn was absent for the vote.)
[The Chairman opened the hearing on A.B. 486.]
Assembly Bill 486: Increases limitation on certain fees that State Emergency Response Commission may require certain persons to pay for calendar year. (BDR 40-1256)
Karen Kennard, Executive Director, State Emergency Response Commission:
[Introduced herself.] A.B. 486 was submitted as an agency request through the budget process. The purpose is to increase the fee cap on the amount of fees collected by the SERC (State Emergency Response Commission) from facilities throughout the state, which store manufactured hazardous materials. The current cap is $5,000, which was established in 1987 at the inception of the SERC and SARA (Superfund Amendments and Reauthorization Act) Title III laws.
The Consumer Price Index shows an inflation rate increase, which would increase this to $7,870 as of 2002. This request is to increase the cap to $7,500. The fees collected are awarded by way of grants to local emergency planning committees. There’s one in each county to support fire, law enforcement, medical and industry first responders in prevention, response and mitigation of hazardous materials incidents. Grants are awarded for planning, training, and equipment. Individual grants are capped at $29,000.
The total of $29,000 multiplied by 17 counties would show a basic need of $493,000 per year, which is what we could receive in grant requests. That’s pretty close to what we do receive. Revenues from fees total approximately $378,000. That’s how much we received last year in fees collected. This increase in the cap would be used to help close that gap between the revenue and the grants.
At the request of the SERC, Senator Rhoads introduced Senate Bill (S.B.) 201. The original intent of this bill was to request that the fee structure, including the fee and caps, be removed from NRS so that they could be established in NAC (Nevada Administrative Code). With added transitional language, pending the approval of the NAC, there was no opposition to that request. On April 2, the Senate Committee on Natural Resources, during their work session, amended S.B. 201 to increase the fee cap to $15,000. The actual increase will be established through an NAC process. At this time, the SERC is requesting that this Committee amend A.B. 486 to increase the fee cap to $15,000. Additionally, Senate Bill 201 strikes the last paragraph of the current NRS, and the Commission would request that this be done for consistency.
Assemblyman Conklin:
Am I correct in understanding that there’s a sister bill or a similar bill on the Senate side?
Karen Kennard:
It ended up being similar; it wasn’t what the request was. The Senate actually did approve increasing the fee cap to $15,000, rather than taking the fee cap out of NRS to put in NAC.
Assemblyman Carpenter:
What do you classify “extremely hazardous materials?”
Karen Kennard:
There’s a list.
Assemblyman Carpenter:
Does it include gasoline?
Karen Kennard:
I don’t believe it does.
Richard Mirgon, Co-Chairman, State Emergency Response Commission:
[Introduced himself.] The hazardous materials list comes from the federal government, and it’s established by them. We have no control as to what is on it. Gasoline is not on that list. Typically you deal with such things as acids, things that clearly, in most people’s minds, are extremely hazardous materials.
Assemblyman Goicoechea:
Then Part 40 of the CFR (Code of Federal Regulations) allows the federal government to amend or change this list at any time, and you might suddenly realize you have a $15,000 fee imposed on you?
Richard Mirgon:
In theory, yes, that absolutely could happen. Again, we have no control over the federal government. Typically they have allowed more quantities, and in a few cases, they have restricted the quantities. The whole intent of this is to try to ensure that people maintain material in low enough quantities so as not to be a hazard. What happens is the federal government would allow you to have 5,000 pounds of product A. If you go to 6,000 pounds, then the fee would be imposed. The intent is that anything over the 5,000 pounds would be extremely difficult to respond to in an emergency. It would be more hazardous to a community. That’s why this fee is imposed. As long as you are below those quantities, you don’t pay this fee. As long as you are managing a facility within federal guidelines, typically you’re in good shape.
Assemblyman Goicoechea:
I assume the prowl and the blasting agents used by the mines would then fall into some of these categories, at least.
Richard Mirgon:
I don’t recall ever seeing blasting agents, but I am not a chemist. I wouldn’t know for sure. Do we collect fees?
Karen Kennard:
Briefly, to answer the question, we do collect fees from the mines, but we only collect them on toxic release inventories. We do not collect them for storage. They are subject still to the fee cap on how many chemicals they have that they are reporting on for the toxic release.
Assemblyman Goicoechea:
How does this apply to the TRI (toxic release inventory)? They have millions of tons in TRIs, so how would this increase affect them? Is there an ability there to triple those fees, too?
Karen Kennard:
We are not requesting to triple the fee. It’s $500 per report on a toxic release inventory report. Currently, it’s capped at $5,000, so, after ten reports, they can have as much after that without paying a fee.
Richard Mirgon:
This really affects the storage of hazardous materials. What we are trying to do is reduce the storage. Typically, in manufacturing, you have your product on the floor being used up when a new product comes in. We’re trying to reduce the storage under federal guidelines of the material that’s already there. As long as they’re staying within the quantities that exist today, the impact to the commercial industry is very minimal. We do have the industry concurring with us on this bill. They don’t believe it will have a major impact. Our recommendation to them, once we go to a hearing under NAC, is that the actual increase be equal to the CPI (consumer price index) rate that is just a few percentage points. Our intent is not to get anywhere near that $15,000. The reason we put it in there, on the Senate side, was that the Senate wanted the cap to ensure that, over the next 20 years, it would never go over that amount. We don’t have an intent of assessing anywhere near that amount.
Assemblyman Marvel:
What is the rationale for raising $5,000 to $7,500?
Richard Mirgon:
It’s twofold: One is to reduce the quantities of materials on hand because, if you have a greater risk of paying a higher fee, you are less likely to store. The second part is the original intent of this fee to provide equipment to first responders to be able to deal with hazardous materials. These are the Level A suits; this is even the cleanup material, the absorbents and the containers you put them in. The cost of those products has gone up considerably in the last ten years, however, the grants that we award to the first responders have stayed flat. So we’re trying to be able to provide additional grant funding for the Level A suits, the Level B suits, and the cleanup materials to first responders to maintain or keep the spill within a confined area as opposed to running amok.
Assemblyman Marvel:
The reserve account? Where do you show your money?
Karen Kennard:
There is the Hazardous Materials Contingency Fund. All of this money goes into that account and is expended in grants. There is an amount in reserves, and the balance is carried forward year to year.
Assemblyman Marvel:
What is it, offhand?
Karen Kennard:
It’s somewhere in the neighborhood of $400,000.
Richard Mirgon:
For clarification, part of the reason that money is there is to respond to hazardous materials. If you had an incident where there was no funding to assist in the cleanup, that money could be used to assist in cleaning up that spill, and that’s why we maintain that balance.
Assemblyman Marvel:
What’s the cost to clean up a spill? Do you have an average or a ballpark figure?
Richard Mirgon:
I don’t think there’s an average. I’ve seen them anywhere from a few hundred dollars to tens of millions. It would depend on the product and the quantity.
Assemblyman Marvel:
Is there a Superfund you can draw from, too?
Richard Mirgon:
Only if it meets Superfund criteria. The federal government would have to look at it and evaluate it, and it is very rare that that occurs.
Assemblyman Carpenter:
What about those plants outside of Carlin? I imagine what they’re storing is probably extremely hazardous. What would the raise to them be?
Richard Mirgon:
Again, if we go through the NAC process, we’re looking at probably a 6 percent increase over the $5,000, so it would be $5,000 plus 6 percent, assuming they’re at the cap. I’m not familiar enough with those businesses to know if they are at the cap. However, the majority of those people storing materials in the state of Nevada are below the cap. They do not store an excess of the quantities permitted under the SARA Title III list.
Assemblyman Carpenter:
What kinds of quantities are they talking about? Do they have large storage there?
Richard Mirgon:
Again, it depends on the product. It could be anywhere from a couple of pounds to tons. It depends on the product.
Assemblyman Goicoechea:
We want to make sure we don’t do something that affects those industries we have in place. You’re telling me that what you do charge is set by regulation. Technically, what you’re looking at with this bill is increasing the cap, but it is not your intent to increase those fees anymore than a CPI index increase.
Richard Mirgon:
Currently, the State Emergency Response Commission is made up of not only public safety people and government people, but half are people from the industry. These folks are part of this process and in bringing this bill to the Legislature. We would have to go to NAC and to a public hearing. One of the reasons we want to do that is so that we do have a public hearing, and we do have an input from those folks. The whole intent of SARA Title III, SERCs and LEPCs (Local Emergency Planning Committees) is participation from the industry. Our intent is not to ramrod anything through. Our intent is to partner with them and get them to understand that we want to reduce the quantities. We don’t want to see them in excess of the federal limits.
One example has been chlorine. There have been a couple of people in the Las Vegas area who, over the past year, have stored large amounts of chlorine and were paying the fee. Clark County Fire Department worked with them, and now they are using another product, which is just as effective, that is not on the list and doesn’t cost them anything. That’s really our ultimate goal. Our ultimate goal is to reduce the risk and reduce the fact that people even have to respond to it.
Assemblyman Goicoechea:
They are good programs, and the rural areas use them a lot, too. I just want to make sure that we protect those industries to the extent we can.
Richard Mirgon:
I understand.
Chairman Collins:
[Advised Mr. Geddes that the Committee had voted in favor of A.B. 485 in his absence. Mr. Geddes responded that he wanted to show in favor of the vote.] Right now you get $500 a permit to a maximum of ten permits. You want to increase that cap to go above that? Is that what I heard a while ago or did I miss something?
Karen Kennard:
That’s probably what you heard. We didn’t discuss the storage. The $500 is for the toxic release report only. There are storage fees also. The $100 and then $100 for each ton above that, so it’s the two combined reportings that have a cap currently of $5,000.
Chairman Collins:
We can pass this with $15,000 so it would be identical to the Senate’s bill. If the Senate bill does get out, we can let this bill die and hope the Senate bill does get out all the way, or we can amend this bill to some other number. Is that basically what you are saying? [Received confirmation.] The request was for $7,500 in the bill. The Senate thought to go to $15,000 so it wouldn’t come back so soon. Is that correct?
Richard Mirgon:
Yes. How we got to the $15,000 was talking to Mr. Bacon. That’s what we agreed to on the other side. We basically came up with that number so we wouldn’t have to come back. Mr. Bacon did agree to that.
Chairman Collins:
For example, you had some explosion up north. Are you involved in that kind of cleanup after an explosion? Did you spend some money there, too?
Richard Mirgon:
We actually don’t do the cleanup. NDEP does. What we do is help the first responders. And, yes, the equipment they use was purchased with these funds.
Chairman Collins:
So you show up first and make sure it’s safe for them to clean up? [Received confirmation.] Committee, if at the end of session, the Senate bill passes and this bill passes, as is, one with $15,000 and one with $7,500, we either will have a conflict amendment or the Senate Bill would supercede us. What are your wishes? [Inaudible discussion.] We could send it over as is. They could amend it. Then we wouldn’t have to vote on their bill. The Chair will take a motion.
ASSEMBLYMAN CONKLIN MOVED TO DO PASS A.B. 486.
ASSEMBLYWOMAN OHRENSCHALL SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Claborn and Mr. Geddes were absent.)
Chairman Collins:
Now we will go into work session on A.B. 287.
Assembly Bill 287: Revises provisions relating to transfer, establishment and maintenance of certain parks. (BDR 26-657)
Chairman Collins:
Mr. Christensen has reported back to our Committee. Mr. Christensen’s Subcommittee passed it out as is. Mr. Mortenson, this is a good piece of legislation. I have some thoughts, considering there are a couple pieces of other legislation, on page 2 under subsection 3, line 9, and beyond. My question first: Do you want a concurrent resolution on the Legislature? Would it go to the Elections and Procedures Committee probably? Or would you want an act from this Legislature, in other words – [inaudible response]. Right. The seller would give it – with protections of the land use. Do you care? [Inaudible.] What I’m looking at is, if it were a concurrent resolution versus it being an actual bill number, it would have to be requested and maybe passed and maybe it would require a two-thirds vote. Can you stipulate that into this law? And, it would take two-thirds to change it? What do you think? You’re the chief sponsor of the bill?
While you are pondering that, the other question I would ask is, on that same page on that same section, would you want to add in going back to some date like last January, whenever, whatever we can legally do, that says no state properties’ names could be changed, such as Fort Churchill or Floyd Lamb or Buckhorn Station, or something like that?
Assemblyman Mortenson:
It’s awfully late in the session. I would love to . . . [inaudible discussion.]
Chairman Collins:
There’s a bill from the other side that addresses specifically Floyd Lamb. I don’t know if it’s going to pass or not. Do you want to do it like it is, Mr. Mortenson, or do you want to make sure Floyd Lamb is in it or Buckhorn?
Assemblyman Mortenson:
I would like to do it like it is.
Chairman Collins:
Good enough. The Chair will accept a motion.
ASSEMBLYMAN CARPENTER MOVED TO DO PASS A.B. 287.
ASSEMBLYWOMAN OHRENSCHALL SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Claborn and Mr. Geddes were absent.)
Chairman Collins:
We have Mr. Carpenter’s report on A.B. 301. While Ms. Eissmann is handing out the amendment (Exhibit M), the Chair will accept the withdrawal by Mr. Mortenson of A.B. 131. There will be no more discussion on it.
Assembly Bill 131: Makes various changes relating to protection of cultural resources. (BDR 33-92)
[Withdrawn by the bill’s sponsor, Assemblyman Mortenson and accepted by Chairman Collins.]
Chairman Collins:
Also we have received an e-mail that the sponsors of A.B. 321 wish to withdraw their bill, so we will have no more discussion on A.B. 321.
Assembly Bill 321: Limits types of surety that may be filed for permit to engage in exploration project or mining operation. (BDR 46-358)
[Withdrawn by the sponsors of the bill and accepted by Chairman Collins.]
Chairman Collins:
We’re waiting for a letter on A.B. 272 from the guides and Commissioners. Mr. Carpenter, what do you want to do with A.B. 272?
Assembly Bill 272: Provides for regulation of outfitters and guides. (BDR 54-142)
Assemblyman Carpenter:
I would like to withdraw A.B. 272.
[Withdrawn by Assemblyman Carpenter, the sponsor of the bill, and accepted by Chairman Collins.]
Chairman Collins:
From what I understand, the State Commission on Wildlife will create a subcommittee for the outfitters and guides to address their concerns. It will be like some of the other subcommittees that the State Wildlife deals with in other areas. They will recognize their concerns, help them set up and approve their fee structure, and work on that situation so they can have a say in what’s going on. If they’re not happy with that, they’ll be back next session. I was hoping to get the process up, but they did make a deal and they understood what they had to do. I was hoping we would pass something out giving them a little more teeth. Actually, getting them this subcommittee is a pretty good deal.
Assemblyman Carpenter:
We had a Subcommittee on A.B. 301 and Ms. Eissmann has handed out the Subcommittee report so I would ask that she explain all of the ramifications of A.B. 301.
Linda Eissmann, Committee Policy Analyst:
The mock-up of A.B. 301 was passed out in the past. On page 2, lines 21 through 23, the language is stricken that refers to the number 35. Mr. Carpenter explained that the Division of Wildlife has a formula by which they determine that number so he felt a specific number was not necessary. On page 3, we also took out lines 22 through 27. This had to do with the State Grazing Board and the Subcommittee. Mr. Carpenter felt that was not necessary. At the top of the page, we added language that requires, if you are going to fence off the water to protect it from damage by elk, you have to make that water available to livestock and water outside of the fence. You might recall that we had originally inserted a couple of words on line 10, page 3, that originally said “public lands if there has been damage by elk to the area.” When I looked at this again I realized that was not necessary because line 15, which is the flush line for this section, specifically references “caused by elk.” So it was not necessary to put the “by elk” on line 10 where it was originally.
On page 4 we took out the language about State Grazing Boards. I believe the Committee has already seen that amendment. What the Subcommittee had agreed to do you’ll see now on the first page, which is a proposed amendment. I will take this, if the Committee approves the bill, to the Legal Division for them to craft the specific language. I prepared this in more of a conceptual form. What this basically requires is that the construction of fences would have to take place after concurrence with and in consultation with any parties that might be involved, depending upon the location of the fence. So it might include the land management agency, the permittee, if it’s an adjudicated grazing allotment, the holder of a water right, the private landowner depending upon the ownership of the land, and any applicable leases.
The consultation would have to include an on-the-ground inspection to determine not only how best to provide the protection of the water source, but also how best to provide access to water for livestock and wildlife outside the fence. The concurrence would have to result in a written cooperative agreement signed by all participants. I’m not sure exactly how that wording would need to fit into the bill; that would be up to the Legal Division, but that was the Subcommittee’s intent. I did fax this to Greg Tanner with the Division of Wildlife and he said that this captured what he also understood was the desire of the Subcommittee.
Assemblyman Carpenter:
That was the wording that the Subcommittee discussed at great length, and I believe the conceptual amendment, the proposed amendment, is satisfactory.
Chairman Collins:
On page 3 at the bottom, who constructs the fence? I heard a comment from Ms. Eissmann that all the parties are involved, but who actually builds the fence?
Assemblyman Carpenter:
As I would see it, that would be part of the cooperative agreement. Most of the time, I think it would be the landowner or the person who controlled the water, other than in some specific locations maybe where the Division of Wildlife would want to do it on their own. I think that would be addressed in the cooperative agreement.
Assemblyman Goicoechea:
I believe, and we don’t want to misconstrue that, that the construction would be reimbursed by NDOW.
Chairman Collins:
So, the Nevada Department of Wildlife, who is already searching for funds . . . If I fence off a waterhole and keep the elk out, I have to provide a pipe or something out of that fenced area so that elk and other livestock can water. Then the Department of Wildlife will pay for that fence. I’m going to provide a pipe and a trough, and then I will send the bill to the Department of Wildlife.
Assemblyman Goicoechea:
Or they would give it to you up front, or whatever. That’s the intent of this legislation. You would be paid out of that depredation fund.
Chairman Collins:
Why are we fencing out elk?
Assemblyman Carpenter:
That money is coming from the existing fund for elk tag fees. They pay $5 for a tag. The reason we would be fencing the elk out is, if the damage to the spring was caused by the elk, we would want to fence them out to prevent further damage to the water. We want to keep the water clean.
Chairman Collins:
How hard is it to prove that the elk were the cause of the damage to the waterhole and not your own cows or some horses or whatever?
Assemblyman Carpenter:
Most of the time you would see the elk tracks and where they were rolling, and they’d knocked the fence down and gotten into it. I don’t think it’s very hard.
Assemblyman Goicoechea:
Even beyond the springs, I think the real issue with this legislation is to allow for them to compensate for drift fences and allotment boundary fences. Typically, elk, as they run through, tear them up. I think that’s probably a bigger issue. The reason we had the language about the springs and were so focused on that is because, we have seen in the past, when agency people would fence 40 acres off and say, “We’re going to keep the elk out of here,” but it keeps everybody out and you end up . . . it’s a de facto right there at that point.
Assemblyman Conklin:
I had a concern over this bill because I’m trying to figure out why this state should be liable for what an elk does. It has no control over the elk.
Chairman Collins:
Mr. Marvel says that the state owns the elk because they shipped them here. The state sells tags for them and $5 out of every elk hunting tag goes into a pot to fix fences. It’s a pretty good-sized fund.
Assemblyman Goicoechea:
These impacts are very small when you consider what an elk does to a haystack or a cultivated field. That’s what the depredation fund originally was intended to address. Now there are other impacts on the peripheral, and there is $800,000 or so in the fund.
Assemblyman Conklin:
So there is a fund already set up for this. This is a matter of saying, if you have this particular problem, you can go to the fund for recompense.
Assemblyman Goicoechea:
It’s not state money; this is money paid by the sportsmen for their $5 tag.
Chairman Collins:
A bill will be coming forward to increase their fees. Has this always been an elk fee, and you’re expanding the uses of that elk money?
Assemblyman Carpenter:
I believe that is correct. We had a problem in Elko last fall where the elk got in and broke the fence down and damaged the water. NDOW didn’t know whether they could use that money to rebuild that fence. This is an attempt to take care of that situation. Also we are trying to expand elk in a lot of other areas. With the situation of the fences and the water, it goes a long way to give the landowners a little more comfort in the areas where we are going to introduce elk.
Chairman Collins:
Where I run most of my cows, the rancher builds the fence and doesn’t get any money back.
The Chairman would like to take a roll call vote on A.B. 301.
ASSEMBLYMAN GOICOECHEA MOVED TO AMEND AND DO PASS A.B. 301.
ASSEMBLYMAN ATKINSON SECONDED THE MOTION.
THE MOTION CARRIED. (Assemblyman Claborn was absent.)
Chairman Collins:
I will reserve the right on the Floor to vote against it. [The Chairman inquired whether the Committee wished to vote on any other legislation. They agreed to take no further action.] We’re adjourned [at 3:36 p.m.]. Thank you very much.
Sharee Gebhardt
Transcribing Secretary
APPROVED BY:
Assemblyman Tom Collins, Chairman
DATE: