Energy office unfazed by foes of tax plan

By David McGrath Schwartz

Friday, May 21, 2010 | 2:01 a.m.

The state energy office will forge ahead with a proposal to give its director more authority to grant tax breaks for energy efficient buildings, despite opposition from counties.

County representatives testified Wednesday that their budgets are hurting and any change could further harm county coffers to the benefit of builders.

“We’re being asked to support a change in regulation, but we aren’t being told what the impact will be,” said Jeff Fontaine, who heads a coalition of Nevada counties. “We still don’t understand ... who’s being unduly harmed by the existing regulations.”

At the end of a workshop Wednesday to discuss granting the energy director new authority, state staff said because of a lack of consensus, another workshop would be scheduled before a decision is made. Yet after the counties’ representatives left, staff reversed course and said they would not hold another workshop and instead move forward with a hearing today during which a decision could be made.

The property tax abatements, passed in 2005 and revised in 2007, have taken a bite out of government revenue. MGM Mirage’s CityCenter is estimated to have its property tax bill cut by $3.4 million this year and in future years; Las Vegas Sands received a $1.6 million tax break on the Palazzo last year and is projected to receive a similar break this year.

Jim Groth, the state’s energy director, defended the benefits that come to a community with environmentally friendly buildings, saying the structures use less water and electricity and produce less waste.

But it’s not clear what effect this change will have on local governments’ fortunes.

Katherine Hammack, a tax incentive specialist with Ernst and Young, was the only nonstaff person to testify in favor of the proposal. After the meeting, she refused to say what projects she represented other than to say they were in Clark and Washoe counties.

“There are situations — foreclosures, change of ownership — that may produce an unjust result,” she said of the current regulations. She said the director should have additional discretion to approve projects “if there are minor differences, and to address something without taking the state to court.”

Sean Sever, a spokesman for the energy office, said the decision to move forward with the hearing instead of holding another workshop was made because state staff thought counties would oppose any change. County representatives had “a chance to recommend suggested language and they declined stating that they would oppose any change ... Delaying the hearing until next week would not have accomplished anything.”

Sever said the office sought to alter the regulation after it rejected a Douglas County project because it missed a deadline to apply for the tax breaks. He said the change had nothing to do with Ernst and Young’s projects.

Assemblywoman Marilyn Kirkpatrick, co-author of the 2007 bill, said she wanted to know who would benefit from the change. “We don’t write special legislation for special people. We’re policy-driven, for the state’s benefit,” she said.

Any changes made during today’s hearing must be approved by the Legislative Commission or a legislative subcommittee.