Line of questioning a bad sign for mining industry

By Anjeanette Damon

Tuesday, Feb. 15, 2011 | 2 a.m.

Mining and its special protections in state law have long been favorite targets of liberals and their allies in the Legislature. On Monday, state Sen. Sheila Leslie, D-Reno, fired the opening salvo in a renewed effort to chip away at the industry’s power — introducing a bill that strips mining companies of their power of eminent domain.

“What it comes down to is when or if you think a private corporate interest should have the right to acquire your personal property to further their private interest,” Leslie said. “That’s the key question.”

Leslie appears to have found traction in going after mining on an issue that not only resonates with the usual mining critics but with some Republican lawmakers.

In the first hearing on Senate Bill 86 Monday, Leslie was supported by a parade of environmental groups, professors and property owners who used increasingly dire superlatives — insane, abhorrent, grotesque — to describe mining’s right to seize property.

“Most people do not believe it’s possible they could lose their property to a beet factory, a smelter or mining company,” said Theo McCormick, who lives in the Comstock Historic District, which was saved from a mining company’s threatened use of eminent domain in the 1980s by an amendment to the law to protect historic sites.

“It would be awful to lose a home to a highway project or public building, but can you imagine having that property taken so a mining company could make a profit?”

Mining was granted its privileged status — including eminent domain powers typically reserved only for government itself — by 19th-century lawmakers when mining was the state’s most powerful industry and its sole economic engine.

With the industry again booming thanks to record gold prices, many have called Nevada’s regulation of the industry, including its constitutionally established tax rate, antiquated. It’s a fight that has grown in intensity with the state’s budget woes.

“This isn’t Senate Democrats coming after the mining industry,” veteran mining lobbyist Jim Wadhams said. “It’s an effort by Sheila Leslie and the eco-terrorists to produce an anti-mining bill. That’s the real issue. They want to take a shot at mining because they don’t like them.”

Utilities and cable television companies have eminent domain powers and they aren’t targeted by the bill, he said.

(Generally, those companies use their limited powers for property easements to run cables, not to completely condemn the land.)

But it wasn’t just Democrats gunning for miners Monday.

In brief but heated questioning, conservative freshman Sen. Michael Roberson, R-Las Vegas, said the mining industry decimated the landscape and the community near his hometown. “I grew up in a small mining town in Kansas and saw firsthand the devastation mining has on the land when they leave,” he said, noting the higher cancer rates and the nearby town that was “shut down” because the Environmental Protection Agency condemned it.

Roberson, who has signed a no-new-taxes pledge, launched into a line of questioning more reminiscent of the arguments behind the recent failed initiative petition to raise the mining tax.

He wanted to know what percentage of a mining company’s profits went toward the net proceeds mining tax and why international mining companies were investing those profits in Canada rather than Nevada.

The questions shocked both mining industry representatives and Democrats, who said they wouldn’t have pegged Roberson as a potential ally of those seeking to increase the net proceeds tax.

After the meeting, Roberson said he was “just asking questions,” but acknowledged he was frustrated by the slippery answers he received.

“I signed a pledge that I would not support a tax increase on the citizens of Nevada, period,” he said. “But that doesn’t mean we couldn’t raise a tax in one place and offset it with a cut somewhere else.”

Roberson may not be the only Republican ally Leslie finds. Assemblyman John Ellison of Elko, a strong supporter of the mining industry, said he opposes eminent domain powers, especially for private industry. “I would never vote in favor of eminent domain,” he said.

The crux of the mining industry’s argument against the bill is that it rarely uses eminent domain. A high-profile case in Elko County last year, in which a mining company began proceedings against a rancher, is what grabbed Leslie’s attention. That case was eventually settled at a profit for the landowner.

“If they rarely use it, then they won’t miss it,” said Assemblyman William Horne, D-Las Vegas, who introduced a similar bill in the Assembly.

But mining lobbyists also argued that ending their eminent domain powers would allow a single property owner to block a mining project and the creation of “many, many jobs” — jobs, the buzz word of the 2011 session.

Mining lobbyists began the day confident that SB86 was merely a grandstanding gesture by anti-mining interests. They ended the morning with a renewed effort to count noses thanks in part to Roberson’s outburst.

“That was shocking,” said Tim Crowley, president of the Nevada Mining Association. “We presented our case against the bill, now I guess we have to go assess its chances.”