By Mark Waite
Nye County Commissioners will again ask the state Legislature to give the county a share of federal royalties for oil wells in Railroad Valley during the 2013 legislative session.
Commissioner Gary Hollis pushed to introduce the legislation as the sole, county bill draft request, though similar legislation has failed going all the way back to the 1999 session and former Assemblyman Roy Neighbors, D-Tonopah.
The federal government is required to pay a percentage of money it receives from the lease of federal lands for the development of minerals to the states. Formerly the first $7 million went to the state Distributive School Account, the excess was distributed 75 percent to the counties, 25 percent to the state. During a special session of the Legislature in 2008, the state took all the lease money for federal lands due to the counties in 2009.
Those federal lease payments are lucrative, Nye County this year will receive $807,837, the Nye County School District $269,279, which includes leases for minerals, oil, gas and geothermal development, up from $318,746 and $106,248 respectively last year.
Previous legislation, like a bill in 2009 by State Sens. John Lee, D-North Las Vegas, and Mike McGinness, R-Fallon, would have distributed all the oil royalty money to the counties, with one-fourth of that going to the school district.
During the 2011 session, county officials were told to work instead with the governor’s office to introduce it into his budget.
This time, county commissioners are being more conservative.
“I think what we need to do is not go after revenue for the wells that are there now, but for anything that comes in after July 1, 2013,” County Commissioner Joni Eastley suggested as last weeks meeting.
County Manager Pam Webster added, “We have the better opportunity of saying for future leases that could be at least split or shared. We may not get every bit of it, but maybe if we propose something like a 75-25 split or a 60-40 split, we would get a better shot at doing something.” Nye County Commissioner Gary Hollis said Assembly Minority Leader Pete Goicoechea, R-Eureka, would have tried to return oil royalties to Nye County when legislators discussed the sunsetting of taxes in the 2011 session if he were this district’s state senator, he’s running for that position now.
Commissioner Dan Schinhofen said Senator Lee has agreed to pursue the oil revenues.
County staff recommending introducing legislation that would eliminate the need to publish the county tax roll. Webster said other counties could join in that effort. She said being able to publish the tax roll electronically every December would save $25,000.
“It’s already been written, we could resurrect it and resubmit it fairly easily from that standpoint, there’s an ease in use. It’s a crap shoot. I don’t know what has a better opportunity of passing or not,” Webster said.
During a July discussion on bill drafts, Webster urged commissioners to present a bill helping out the budget, that would raise revenue or decrease expenses.
Eastley asked if Hollis was going to draft legislation on the oil field revenues.
Railroad Valley oil wells account for the vast majority of oil production in Nevada, 364,801 barrels last year out of a statewide total of 407,999 barrels, according to statistics from the Nevada Division on Minerals. That’s down from 2010 when statewide production was 427,222 barrels, with Nye County wells pumping out 369,962 barrels.
The Nevada Department of Taxation reported the royalty tax paid on oil production in 2010 was $107,157 based on actual royalties paid of $2.14 million.
The net proceeds of oil production in Nevada in 2010 was estimated at $14.2 million, net proceeds tax paid was $796,890.
Eastley inquired about whether Churchill County was able to capitalize on its geothermal resources. That generated taxes of $107,157 in 2010, according to the Nevada Department of Taxation.
Both oil and geothermal are relatively small, compared to the $10.8 million in net proceeds royalty tax paid by gold and silver mines statewide in 2010.
Eastley said Goicoechea has agreed to sponsor legislation on transferring the historic Belmont courthouse from the Division of State Parks to Nye County. It was the county seat of government from 1901 to 1905, but has been in a state of disrepair and closed to the public.
Nye County Commission Chairman Lorinda Wichman had wanted the sole bill draft request to eliminate a requirement to post the location of the nearest water source on minor county roads. During the 2011 session the Legislature adopted the county’s sole bill, Senate Bill 49, which provided that a filing of a map by the county and Department of Taxation constituted acknowledgment of a right-of-way for public use and eliminated the need for both the county commission and Board of Road Commissioners to accept a road. That is part of Wichman’s minor road inventory project.
Schinhofen originally wanted a bill on collective bargaining with public employee unions but Eastley conceded it wouldn’t go anywhere.
Nye County District Attorney Brian Kunzi suggested a bill allowing the county more flexibility to offer incentives for businesses, but commissioners never discussed publicly what the incentives could be. Kunzi also suggested a bill requesting home rule, which would allow the county to make more decisions without state approval.