Attorney
General dinged by LCB
By Steven
Miller
BusinessNevada
Nevada’s
Legislative Counsel Bureau said in effect
this week that Nevada Attorney General Brian Sandoval is
wrong on the law in his efforts to block a major tax
refund to a Southern California company.
Several Nevada firms may be due even larger tax refunds,
if the Nevada Tax Commission precedent stands.
Responding to a request from State Senator Randolph J.
Townsend, R-Reno, the LCB produced a seven-page legal opinion.
It upholds the authority of the Nevada Tax
Commission—notwithstanding the state's open meeting law—to
deliberate and vote in closed meetings when a taxpayer has
invoked his statutory confidentiality privileges.
Sandoval’s office in July filed suit against the commission,
asking a court to nullify a May 9 tax-refund decision on the
grounds that the commission had violated the state
open-meeting law. In the case at issue, the commission had
approved a $40-million-plus refund for Southern California
Edison (SCE), which operates the Mojave Station power plant
near Laughlin and fuels it with coal mined in Arizona.
SCE had appealed to the commission to end what the company saw
as illegal double-taxation by the State of Nevada in defiance
of Article 10, Section 5 of the Nevada Constitution. That
provision directs lawmakers to provide by law for a single tax
“upon the net proceeds of all minerals, including oil, gas and
other hydrocarbons, extracted in this state,” and explicitly
bars any additional tax upon those particular minerals. On
SCE’s imported coal, the state was not only levying a minerals
tax but also a use tax.
LCB Senior Principal Deputy Legislative Counsel Eileen
O’Grady, with the approval of Legislative Counsel Brenda J.
Erdoes, argued in the opinion that Nevada’s open meeting law,
NRS 241.020, explicitly says that it does not apply when other
specific statutes provide exceptions. Such a specific law,
wrote O’Grady, is NRS 360.247, passed by the Nevada
Legislature in 1983 explicitly for the purpose of resolving
confusion about the scope of open-meeting rules in state tax
commission hearings. That statute expressly states: “A hearing
on [a taxpayer’s] appeal may be closed to the public if the
taxpayer requests that it be closed.”
While the 1983 law does not expressly state that the tax
commission can deliberate and take action during closed
hearings, noted LCB counsel, the history of the 1983 Nevada
Legislature reveals that was lawmakers’ intent. Followed
mechanically, the open meeting law could have forced state tax
commission officers and staff into jail, since another state
law—which lawmakers had no intention of modifying—imposed
criminal sanctions for publicly disclosing the confidential
information of businesses that were appealing tax questions.
The Legislative Counsel Bureau opinion also cited prior
arguments of the Nevada Attorney General’s office that
disagreed with the position it took in the SCE matter. An
example was the legislative mandate that school board hearings
considering the expulsion or suspension of a student be
closed. In this case the AG’s office wrote, “We interpret that
to be a complete exemption from the open meeting law….”
A federal district court also agreed.
