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Nevada Mining Tax Measure (2010)

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The Nevada Mining Tax Measure may appear on the November 2, 2010 state ballot in Nevada as an initiated constitutional amendment. The measure proposes remove the statutory deductions allowed to mining companies by current state law.[1]

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.[2] 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.[3]

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.[4] 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.[5]

Support

The measure is 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.[6]

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."[7]

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."[6]

Opposition

Mining lobbyist Jim Wadhams said, according to reports, the measure "is designed to shut mining down."[6]

Legal challenge

On March 19, 2010 the Nevada Mining Association asked a Carson City judge to block the proposed ballot initiative. Lawyers for the association argue that the initiative is unconstitutional and thus cannot appear on the ballot. The case was heard by District Judge James Wilson.[8]

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.[9]

Petition language changed

On Monday, March 23 the judge ruled that the petition must include the following language:[10]

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.[11][12][13]

The Nevada Supreme Court heard oral arguments on June 7 in Las Vegas.[14] 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.[15][16]

Polls

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%.[17][18][19]
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

In order to qualify the measure for the November 2010 ballot supporters are required to collect a minimum of 97,002 valid signatures by June 15, 2010. County clerks must then verify and submit the signatures to the secretary of state by no later than August 4, 2010.[20]

According to reports in April 2010, supporters have collected approximately 10,000 signatures.[3]

See also

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References

  1. Associated Press,"Liberal group begins push to tax mining in Nevada," December 6, 2009
  2. Reno Gazette-Journal,"Lawmakers target mining," February 26, 2010
  3. 3.0 3.1 Las Vegas Sun,"Mining Association: Initiative to raise state tax ‘confusing, misleading’," April 21, 2010
  4. Associated Press,"Mining tax backers file new NV initiative," March 23, 2010
  5. Silver Pinyon Journal,"Ballot initiative on mining tax heads to Supreme Court," April 1, 2010
  6. 6.0 6.1 6.2 MineWeb,"Nevada mining to pay new claims fee to help shore up state budget shortfall," March 1, 2010
  7. Las Vegas Sun,"Mining tax initiative," December 7, 2009
  8. Associated Press,"Initiative with tax hike for mines before NV judge," March 19, 2010
  9. Associated Press,"Mining industry loses bid to block petition," March 20, 2010
  10. Mineweb,"Nevada mining tax hike drive continues after judge changes petition language," March 23, 2010
  11. Associated Press,"Nevada Supreme Court expedites mining tax appeal," March 31, 2010
  12. Las Vegas Sun,"Supreme Court to speed up mining association appeal," March 31, 2010
  13. Las Vegas Sun,"Mining tax proponents ask court to let voters decide issue," May 13, 2010
  14. Associated Press,"Nevada court hearing mine tax initiative arguments," June 7, 2010
  15. Las Vegas Review-Journal,"Mining attorney asks justices to keep tax question off ballot," June 7, 2010
  16. Associated Press,"Lawyer to Nevada high court: Mining tax petition would 'commandeer' legislative process," June 8, 2010
  17. Las Vegas Review Journal,"Poll: Mining tax increase supported," April 12, 2010
  18. Mineweb,"Poll shows tight race so far in Nevada mining taxation ballot initiative," April 13, 2010
  19. Associated Press,"Nevadans split in poll on switch in mining taxes," April 12, 2010
  20. Nevada Secretary of State,"Important 2010 Initiative Dates," retrieved June 1, 2010