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August 20, 2014

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Legislature 2013:

No longer neutral: Mining officially opposed to mine tax measure

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Steve Marcus

A cable shovel dumps gold ore into a truck in Crescent Valley in September 2001.

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Nevada Mining Association representative Tim Crowley sits in front of a state map Tuesday, February 15, 2000, in the association's Las Vegas office.

The mining industry came out today in opposition to a plan to remove the industry’s tax provisions in the state constitution.

While the industry remained neutral with concerns during 2011 and during debate in the state Senate this year, they emphatically opposed Senate Joint Resolution 15 in an Assembly committee hearing today.

“There’s been lots of misstatements and misinformation about this issue, the passage or consideration of SJR15,” said Tim Crowley, president of the Nevada Mining Association. “To the extent that these false notions motivate the desire to pass SJR15, I’d like to set the record straight … we pay more than our fair share of our taxes. ... The best option for you is to reject SJ15. It was introduced on a false premise that we are protected from taxation; we aren’t.”

Noting that the industry already pays taxes like sales and payroll taxes that other businesses pay, Crowley said the constitution’s provisions about a 5 percent tax rate on minerals already is an additional tax the industry pays.

Jim Wadhams, lobbyist for Newmont Mining Corp., told the committee the resolution is “bad policy” before launching into a lengthy argument that passing it would ultimately result in a tax decrease for the industry. Supporters of the measure say the exact opposite: removing mining’s constitutional tax rate would allow the Legislature to tax mining in many ways, resulting in a tax increase.

Raising taxes on an industry that’s worth billions of dollars has been so popular among voters that even Republicans who usually oppose new taxes have talked about doubling mining taxes.

Mining lobbyists tried to refute the populist arguments that mining should be taken out of the state constitution.

“It’s time for some Nevada straight talk,” Wadhams said. “This resolution before you is tax policy and should not just be done for political convenience.”

The industry issued these statements at what is likely the last public hearing before the Assembly votes on the measure. If approved, voters would get to decide whether the industry should keep its constitutional tax rate.

The unequivocal opposition marks a switch from previous instances in which the mining industry went to great pains to stay neutral on the matter.

In a previous hearing, Sen. Michael Roberson, R-Las Vegas, pressed Crowley to tell the public if the industry was neutral or in opposition to the resolution. He asked four times for a declaration of either opposition or neutrality.

“We think it’s a mistake,” Crowley said in his fourth reply to Roberson at a March Senate hearing.

At the Assembly hearing, supporters of the measure continued to make the assertion that the mining industry is not paying its fair share to support Nevada’s education system.

With much of the support for the measure coming from Clark County, a representative from White Pine County blew open undertones that have long simmered in the background of the SJR15 debate.

It took a mention of Clark County’s gaming industry to set off Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, who launched into a lengthy criticism of comments from Jim Garza, Community Economic Development director for White Pine County.

“This is not about one industry or another,” she said. “To say you’re going to lose all this and it’s the Southern Nevada legislators’ fault is offensive, and I don’t take that too well. ... This is about policy and doing what’s best for the state.”

Mining industry lobbyists directly addressed the gaming industry, saying they cannot be compared.

“I’ve been hearing that mining is the same size as the gaming industry, and therefore we should pay the same,” Crowley said. “That’s far from the truth.”

He said the gaming industry accounts for about 30 percent of the state’s economy while mining represents 4 percent of the state economy.

The Progressive Leadership Alliance of Nevada, the political group that has led the charge to pass SJR15, asserts that the mining industry pays a paltry effective tax rate of 1.2 percent on minerals. Alternatively, the gaming industry pays for about 30 percent of all state spending.

If the mining tax provisions ultimately get yanked out of the constitution, the issue seems likely to end up in the court system.

Wadhams said mines, mining claims and the actual gold, silver and other minerals are a property tax.

Kevin Powers, attorney for the Legislative Counsel Bureau, which advises the Legislature and drafts bills, said that mines and mining claims are distinct from the act of extracting the mineral. Put simply, there’s a difference between being — the mines and mining claims existing — and doing — extracting minerals from the ground.

“Once the limitations are removed by SJR15, it would be up to the Legislature to determine how to property tax minerals and mining claims,” he said.

It’s these competing interpretations that nobody can definitively answer now. Any court case would happen after the 2014 election.

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  1. A complete, total SHOCKER!!!

  2. Mr. Crowley --- I think we can solve this pretty easily. You pay your favored rate on what you report to shareholders and not that make believe document that's generated for our state. We got a deal? Simple yes or no.

  3. According to the Nevada Department of Taxation, mining businesses in Nevada made over $15 billion from gold extraction between 2010 and 2011 but paid less than $200 million in tax to the state's general fund. That's an effective tax rate of 1.079%. Who do you know who pays that little in taxes????

    Compare that to gaming, which paid nearly $2 billion in taxes for 2012. Yes, that's for one year.

    Here's the tax math: <$200 million for two years vs $2 billion for one year.

    It's time mining stopped getting preferential treatment and started being treated like every other business in our state.