Legal and policy implications for private developers acquiring federal land in Nevada

Over two years have passed since the introduction of the Southern Nevada Economic Development and Conservation Act (S. 567), a bill designed to open up certain federally owned lands for private development, while simultaneously preserving other federal lands for conservation and recreation, in Southern Nevada. The bill, which is referred to in this article as the “Public Lands Bill,” stalled in this last session of Congress. The circumstances of its failure and events since its introduction are worth considering as the state evaluates how to move forward in the face of a dwindling base of undeveloped land available for future, private development.

In terms of parallel circumstances, in this same two-year period of time, Nevada experienced excessive heat, drought and a dwindling water supply, each of which received national news attention. These circumstances fueled arguments against opening additional land for private development, while also highlighting arguments in favor of vertical (i.e., on existing, developed private lands) rather than horizontal (i.e., expansion into other federal lands) development trends on the national stage.

In response, various regulatory agencies have begun implementing new conservation-focused policies. For example, the Southern Nevada Water Authority (SNWA) has required the phasing out of evaporative cooling technology in the hope of further conserving our collective water supply from the Colorado River. This specific rule will impact water usage, but also potentially will, in turn, increase the cost of new commercial development. Similarly, the U.S. Department of the Interior’s Bureau of Land Management (BLM) recently unveiled its proposed Conservation and Landscape Health Rule, which in part elevates the goal of “conservation” to a status of equal value with other more economic-oriented uses of federal lands under the Federal Land Policy and Management Act of 1976, such as oil and gas leasing.

Ultimately, as the regulatory culture of agencies with jurisdiction in Southern Nevada shifts, one might expect that private development will become more difficult. Therefore, just as our water solution could require federal action, so too might our local land issues.

Accordingly, while considering these intense and important environmental issues, it is worth remembering the equal importance of federal land sales to the stability and viability of Nevada, which is over 80 percent federally owned. Unlike other states that draw from a diverse property tax base fueled by private development, Nevada local governments receive a federal Payment in Lieu of Taxes to help offset a portion of losses in property taxes due to the existence of nontaxable federal lands within their boundaries. Especially with increases in certain property taxes legislatively capped, identifying other sources of funding to support public infrastructure such as utilities, roads, schools and recreational amenities is of paramount concern.

In partial response, Southern Nevada’s unique legislation, the Southern Nevada Public Land Management Act of 1998, as amended (SNPLMA), has allowed for funds from federal land sales to be reinvested in the local community. Upon consummation of a sale of federal lands subject to SNPLMA, sale funds are deposited into a special account to fund projects falling into 25995613.2 certain expenditure categories, to the state of Nevada’s general education program, and to the SNWA for water treatment and transmission facility infrastructure in Clark County. Funds have been used for the acquisition of certain environmentally sensitive lands and interests and for the development of certain parks, trails and natural areas.

To those interested, the BLM has noticed its next sale, which will take place on Nov. 1, 2023, at 8 a.m. Pacific Time through its online auction website, EnergyNet. BLM will publish the fair market value for the parcels on EnergyNet’s website no later than 30 days prior to the sale. To participate, potential purchasers must create an EnergyNet account, complete the Bidding Terms Agreement, request a bidding allowance, register for the sale and obtain a bidder number. The platform may require five business days to determine a bidder’s financial qualifications. The BLM’s website also provides that it has opened the period for Round 20

SNPLMA project nominations, and the nomination period ends at 11:59 p.m. Pacific Time on Nov. 5, 2023, through the BLM’s nomination portal.

While these sales will create an opportunity to get more land into the hands of private developers, the available acreage is finite and diminishes with each such round of auctions. It is the future availability of land subject to SNPLMA sales that the Public Lands Bill in part seeks to protect and enhance.

In summary, today, SNPLMA remains an important tool for growth. As our 2023 state legislative session demonstrated, Nevada continues to struggle with issues of affordable housing and diversification of economic development. As our federal delegation considers supporting legislation to increase the amount of federal land open to private development, including the potential reintroduction of a version of the Public Lands Bill, Nevadans should look for ways to support these efforts to make sure that our state remains economically sustainable while preserving our precious natural resources.

Jamie Thalgott is a shareholder for Brownstein Hyatt Farber Schreck, LLP and is based in the Las Vegas office.

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