Efforts to qualify a 2022 ballot question amending the state’s constitutional tax cap on mining could be effectively halted through a lawsuit that could be decided just weeks before the start of the 2021 Legislature.
Carson City District Court Judge James Wilson said on Thursday that he’ll take the request to halt the proposed constitutional amendment under advisement, after attorneys representing the Legislature, secretary of state, mining companies and a handful of small rural counties spent nearly three and a half hours locked in oral arguments.
Wilson gave no indication as to how he might rule, but asked attorneys to submit any requested changes to draft proposed orders by Tuesday at noon — a hint that a ruling could come next week.
The original case was filed by Lander County in early September and challenges the trio of proposed constitutional amendments raising the state’s 5 percent cap on the net proceeds of mineral taxes set in the state Constitution. Several additional rural counties with significant mining industries — Elko, Lander, Pershing and White Pine — joined on to the lawsuit, and the case was consolidated with a similar claim brought by Nevada Gold Mines (the joint mining venture between Barrick and Newmont).
Although the proposed constitutional amendments would affect the mining tax rate, arguments on Thursday focused almost exclusively on the legislative process — whether state lawmakers violated constitutional rules and requirements during the 2020 special session when the proposed constitutional changes were passed.
The request from the rural counties and mining conglomerate would throw a wrench in plans to increase the rate of mining taxes, essentially re-setting the five-year clock normally required for proposed constitutional amendments, which need to pass out of subsequent legislative sessions before heading to a statewide vote for final approval. If the 2021 Legislature passes any of the three resolutions, they’ll proceed to the 2022 midterm election.
Lawmakers during the 2020 special session considered and ultimately passed several proposals that would increase taxation rates for the mining industry — a longtime goal of progressives, who say the industry has had a “sweetheart” deal baked into the Constitution since the state was founded in 1864.
Todd Bice, an attorney representing Nevada Gold Mines, said during the hearing that the resolutions were improperly passed because issues related to mining taxation were not explicitly noted in Gov. Steve Sisolak’s call for a policy-focused special legislative session.
Instead, lawmakers relied on a legal opinion authored by the nonpartisan Legislative Counsel Bureau stating that the constitutional language around special sessions only limits lawmakers on “bills,” and otherwise allows them to draft, vote and adopt resolutions, including those intended to amend the Constitution.
Although the specific wording of the constitutional provisions regarding special sessions was modified through a 2012 ballot question, Bice said that lawmakers were engaged in a “naked power grab” by over-broadly interpreting their powers during a special session beyond what the Constitution allows.
“They've now resorted to a super technical argument about what the word bill means, and so now the word bill has suddenly become to mean only legislation, not joint resolutions and so therefore we can do anything that's not technically a bill during a special session,” he said during the hearing. “That is simply not serious. Respectfully, the Legislature knows better.”
But Solicitor General Craig Newby, representing the secretary of state's office, said that the lawsuit should be dismissed because it was more focused on the “prospect of a future problem” rather than an actual, existing controversy.
“Nothing happens until the Legislature chooses to adopt any or all of these potential amendments. There's nothing here that’s ripe.”
Legislative Counsel Bureau General Counsel Kevin Powers said both plaintiffs lacked standing — counties are limited in what kinds of litigation they can file against the state, and the mining conglomerate was similarly limited because the resolutions have not yet gone into effect — meaning outside of potential future harm, the only adverse effect on the business would be potentially more political or lobbying costs, not an increase in their tax burden.
“We are essentially at legislative halftime, waiting for the proposed amendments to be considered by the (2021) Legislature,” he said. “We are smack dab at an intermediate middle stage of the process.”
But Bice — who also argued that the legislative attorneys had mishandled a constitutional deadline requiring proposed amendments be published for three months prior to the next general election — said his clients were in fact injured because they needed to extend “political capital” during the upcoming legislative session to defeat the resolutions.
He also said it would be “backward” if the Legislature was limited to what kinds of bills lawmakers could take up during a special session but had otherwise unfettered ability to pass resolutions or proposed constitutional changes, a process that normally requires more deliberation.
“Special sessions are supposed to arise from extraordinary occasions,” he said. “Something that is unforeseen, that needs immediate attention, that can't wait until the next legislative session. Constitutional amendments, on the other hand...are the opposite. They are supposed to be handled in a very methodical fashion.”