Nevada mining tax hike drive continues after judge changes petition language
An initiative petition would hike Nevada hardrock mining taxes by 300% can still be circulated, a Nevada court ruled, but only if some changes in language.
Posted: Tuesday , 23 Mar 2010
RENO, NV -
A Carson City Nevada district court judge has ruled a petition drive to place a ballot initiative to change Nevada's constitutional language to tax "net proceeds" of mines to "gross proceeds" of mines may continue only if the petition language is changed.
The Nevada mining industry had sought an injunction to keep Nevadans from voting on a proposed ballot measure advocated by Nevadans for Fair Mining Taxes. The coalition of teachers' unions, labor unions and conservationists seek a constitutional amendment that would make mines pay taxes before instead of after deducting their expenses.
Nevadans for Fair Mining Taxes has already collected 12,000 signatures of the 97,000 they need by June 15 to make the November ballot. If the petition qualifies for the ballot, it would have to be approved in two different general elections and could not go into effect until at least 2012-13.
In his ruling Monday, District Judge James E. Wilson, Jr., noted the proposed change in language would have raised the mining industry's tax bill more than 300% from $91.8 million in 2008 to $284.4 million.
But Wilson denied the mining industry's request for an injunction to stop the petition drive. Instead, the judge ruled the petition must now contain the following language:
"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."