Nevada Mining Tax Measure (2010)
|Not on Ballot|
| This measure did not or |
will not appear on a ballot
The measure proposed to remove from state law some statutory tax deductions allowed to mining companies.
Mining companies, according to reports, pay a higher property tax rate on the minerals they extract from the state, however, they are also allowed deductions for mining costs. Those deduction, initiative supporters argue, can severely reduce tax revenue to the state. According to the Nevada Constitution there should be a net proceeds tax on mineral of no more than 5 percent. According to the Legislative Counsel Bureau in 2008 the mining industry paid $91 million in net proceeds. According to the bureau, had the proposed initiative been implemented the industry would have paid $284.4 million.
Following a March 20, 2010 court ruling that called for the petition language to be rewritten, supporters filed a new initiative on March 22, 2010. However, the case is currently pending the Nevada Supreme Court. On March 31 the Supreme Court agreed to expedite the case. Oral arguments are scheduled to be heard June 7 in Las Vegas.
The measure was supported by an advocacy group called Progressive Leadership Alliance of Nevada (PLAN). In February 2010 the Nevada State Education Association began running a television ad campaign that calls for the public to support the proposed measure.
Bob Fulkerson, PLAN executive director, said, "We have an enormous need in our budget. One industry is recording all-time profits, and that’s the mining industry. Yet it’s paying next to nothing to the general fund."
Despite a decision by the Nevada Legislature to charge a new fee on mining claims, Fulkerson said the proposed amendment is still required. Fulkerson argues that the amendment will remove the industry's "sweetheart deal that's enshrined in the constitution."
Mining lobbyist Jim Wadhams said, according to reports, the measure "is designed to shut mining down."
On March 19, 2010 the Nevada Mining Association asked a Carson City judge to block the proposed ballot initiative. Lawyers for the association argued that the initiative is unconstitutional and thus cannot appear on the ballot. The case was heard by District Judge James Wilson.
Request for block denied by judge
Judge Wilson Jr. denied the block requested by the Nevada Mining Association but agreed that the initiative language should be reworded. The language, said the judge, should clarify that the recommended change could triple the proceeds tax on mines retroactively in 2008 from $92 million to $284 million. The change in wording requires that mining measure supporters refile the petition and start over on signature collection. However, the judge emphasized that according to the Nevada Supreme Court he cannot rule on the constitutionality of the measure because even if the measure does not appear to be constitutional, there may be a way to implement it in a constitutional form. Nevada Mining Association lawyers said they were "pleased" with the revisions and clarification of the initiative language.
Petition language changed
The Nevada Constitution provides for a tax on mining proceeds. Since 1865 Nevada has taxed net proceeds of minerals extracted in the state at a rate of not more than five percent. ‘Minerals' include oil, gas and other hydrocarbons, but does not include sand, gravel or water, except hot water or steam in an operation extracting geothermal resources.
This initiative amends the Constitution in two ways: 1) Taxing gross proceeds, rather than net proceeds, of minerals extracted in this state; and 2) at a rate of not less than five percent, rather than not more than five percent. The tax would apply without regard to the costs of extracting the mineral, including digging, removing, processing, transporting, labor, and other costs.
The impact of the tax increase cannot be precisely determined. The legislature's fiscal analysis indicates in 2008 the present tax generated $$91.8 million for state and local governments; if this initiative provision were in effect in 2008, the tax would have generated $284.4 million-a tax/revenue increase of more than 300%.
To become effective this change must be approved in two general elections. The earliest the additional revenue would be available would be in fiscal year 2013-2014.
Case heard by Supreme Court
Following the March decision by Carson City judge the Nevada Mining Association filed an appeal with the Nevada Supreme Court. The association maintains that the initiative petition violates the single subject rule by including two subjects: changing the Nevada Constitution and changing the tax rate. On March 31 the Supreme Court agreed to expedite the case.
The Nevada Supreme Court heard oral arguments on June 7 in Las Vegas. According to reports the Nevada Mining Association argued that the proposed initiative should be kept off the ballot because if approved by voters it would undermine the state legislature. "The people can't command the government to enact a law," said Attorney Bradley Scott Schrager, who represents the Nevada Mining Association. However, Attorney Don Springmeyer, who represents initiative supporters, said the ballot question does not require lawmakers to raise mining taxes but instead gives them approval to proceed in that direction.
- See also: Polls, 2010 ballot measures
- On April 5-7, 2010 Mason-Dixon Polling & Research conducted a poll, on behalf of the Las Vegas Review-Journal, which found that 40% of polled registered voters were in favor of the proposed amendment, while 37% were opposed and 23% were undecided. The margin of error for the poll was +/- 4%.
|Date of Poll||Pollster||In favor||Opposed||Undecided|
|April 5-7, 2010||Mason-Dixon Polling & Research||40%||37%||23%|
Path to the ballot
- See also: Nevada signature requirements
Opponents of the petition threw up various legal and procedural obstacles. In March 2010, District Judge James Wilson ruled in favor of initiative opponents, saying that the petition language was unclear, and that the petition would have to be re-written. At that time, supporters of the initiative had already collected 12,000 signatures. The judge's order meant that they had to discard those signatures and start the collection process over from scratch.
According to reports a month later, in April 2010, supporters had by then collected approximately 10,000 new signatures.
When the June 15 petition drive deadline had arrived, supporters said they had been able to collect about 66,000 signatures, or about 67% of the minimum requirement.
- Nevada petition drive deadline only a week away
- Nevada mining tax measure to be heard by Supreme Court this summer
- Progressive Leadership Alliance of Nevada (PLAN) (supporters)
- Nevada News Bureau,"Initiative Petition Deadline Looms, Groups Have Until June 15 To Qualify Measures For November Ballot," June 4, 2010
- Pahrump Valley Times,"County won't single out mining to make up for shortfall," April 9, 2010
- Las Vegas Review-Journal,"NOVEMBER BALLOT: Group circulates new petition on mining tax," March 23, 2010
- Las Vegas Review Journal, "Signatures lacking on mining tax effort", June 15, 2010
- Associated Press,"Liberal group begins push to tax mining in Nevada," December 6, 2009
- Reno Gazette-Journal,"Lawmakers target mining," February 26, 2010
- Las Vegas Sun,"Mining Association: Initiative to raise state tax ‘confusing, misleading’," April 21, 2010
- Associated Press,"Mining tax backers file new NV initiative," March 23, 2010
- Silver Pinyon Journal,"Ballot initiative on mining tax heads to Supreme Court," April 1, 2010
- MineWeb,"Nevada mining to pay new claims fee to help shore up state budget shortfall," March 1, 2010
- Las Vegas Sun,"Mining tax initiative," December 7, 2009
- Associated Press,"Initiative with tax hike for mines before NV judge," March 19, 2010
- Associated Press,"Mining industry loses bid to block petition," March 20, 2010
- Mineweb,"Nevada mining tax hike drive continues after judge changes petition language," March 23, 2010
- Associated Press,"Nevada Supreme Court expedites mining tax appeal," March 31, 2010
- Las Vegas Sun,"Supreme Court to speed up mining association appeal," March 31, 2010
- Las Vegas Sun,"Mining tax proponents ask court to let voters decide issue," May 13, 2010
- Associated Press,"Nevada court hearing mine tax initiative arguments," June 7, 2010
- Las Vegas Review-Journal,"Mining attorney asks justices to keep tax question off ballot," June 7, 2010
- Associated Press,"Lawyer to Nevada high court: Mining tax petition would 'commandeer' legislative process," June 8, 2010
- Las Vegas Review Journal,"Poll: Mining tax increase supported," April 12, 2010
- Mineweb,"Poll shows tight race so far in Nevada mining taxation ballot initiative," April 13, 2010
- Associated Press,"Nevadans split in poll on switch in mining taxes," April 12, 2010
- Nevada Secretary of State,"Important 2010 Initiative Dates," retrieved June 1, 2010
State of Nevada
Carson City (capital)
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