A judge has ruled against a suite of rural Nevada counties and a mining conglomerate that challenged a trio of proposed constitutional amendments changing mining taxation rates that were passed during a special session over the summer.

Carson City District Court Judge James Wilson issued the order on Thursday, striking a blow against efforts led by rural Nevada counties and Nevada Gold Mines to disqualify the proposed constitutional amendments. If any of the measures pass during the 2021 legislative session, they would proceed to the 2022 ballot for consideration by voters.

Wilson wrote in the order that the court lacked subject-matter jurisdiction to hear challenges to the proposed resolutions at this middle point in the process, and that issues raised by plaintiffs about deadline dates and introduction of resolutions during special legislative sessions failed to violate provisions of the Nevada Constitution.

News of the court’s decision was first reported by the Las Vegas Review-Journal.

While the order is likely to be appealed to the Nevada Supreme Court, it marks an initial defeat for the state’s mining industry and rural counties in their opposition to increased mining taxes, as well as clears the runway for future Legislatures to process potential constitutional amendments on a more truncated timeline.  

Todd Bice, an attorney representing Nevada Gold Mines, said in an emailed statement that the company was considering whether to appeal, but that additional legal challenges would likely follow should the Legislature approve any of the proposed mining tax resolutions during the upcoming session.

"Since the court said it lacked jurisdiction, the legal merits cannot be decided unless the upcoming Legislature attempts to pass the proposed constitutional amendments," Bice said in an emailed statement. "If that happens, Nevada Gold Mines will renew its challenge, including in a new case and the matter will ultimately have to be addressed by the Nevada Supreme Court. "

Lawmakers over the summer advanced three proposed amendments to mining tax language in the Nevada Constitution, mostly along party lines with Republicans opposed. Typically, such initiatives are taken up by lawmakers in regular sessions that are two years apart, before possibly advancing to a statewide vote.

The timing of the measures means that they will come up for their second review in the forthcoming legislative session, possibly allowing them to move to a statewide vote years earlier than they otherwise would.

As it stands, Nevada applies a maximum 5 percent tax on the net proceeds of minerals. Progressives have chafed against the rate, saying the industry has had a “sweetheart deal” in the Constitution since Nevada gained statehood in 1864.

Two of the proposals (AJR1 and SJR1) would remove the 5 percent cap and implement a 7.75 percent rate on gross mining proceeds. The new tax funds would be earmarked for education or health care (AJR1) or payments to “eligible persons domiciled in this State” (SJR1).

The third proposal, AJR2, is more conservative, amending the net proceeds tax rate up to a maximum of 12 percent. A minimum taxation rate would be tied to the property tax rate of the jurisdiction where the mining operation is located. 

The original case against the proposals was filed by Lander County in early September. Several additional rural counties with sizeable mining industries — Elko, Lander, Pershing and White Pine — joined on to the lawsuit, and the case was merged with a similar lawsuit brought by Nevada Gold Mines (the joint venture between Barrick and Newmont mining companies).

Todd Bice, an attorney representing Nevada Gold Mines, said during a recent court hearing that the resolutions should not have been taken up because they were not explicitly included in Gov. Steve Sisolak’s proclamation calling for a special session focused on a particular set of policies. 

Lawmakers’ rationale for taking them up anyway included a legal opinion from the nonpartisan Legislative Counsel Bureau that says restrictions on topics of a special session apply to “bills,” but would not preclude “resolutions,” which are the vehicle for amending the Nevada Constitution.

In the order, Wilson wrote that a Constitutional change made in 2012 giving the Legislature the power to call itself into a special session without a proclamation from the governor gave the body an inherent right to conduct normal legislative business during special sessions save for explicit directions in the Constitution.

Updated at 9:08 p.m. to include a statement from Nevada Gold Mines.