Senate approves proposed mining amendment

By a margin of 17-4, the Senate on Monday approved the amendment that would remove mining’s protection from higher taxation from the Nevada Constitution.

This is SJR15’s second trip through the Legislature. The final hurdle before the issue goes to voters in November 2014 is passage by the Assembly.

“It neither increases nor decreases the tax on mining,” said Majority Leader Mo Denis, D-Las Vegas. “It simply gives the Legislature the power to change the way mining is taxed.”

Mining has a provision in the Constitution limiting its tax obligation to the state to no more than $5 per $100 of net proceeds. Opponents argue that limit, combined with numerous deductions, gives the industry an effective tax rate of less than 1 percent.

Sen. Ruben Kihuen, D-Las Vegas, said the measure was approved unanimously by both Republicans and Democrats on the Revenue Committee. He said it would allow the Legislature to determine both the rate of the tax on mines and the distribution of that revenue.

Sen. Pete Goicoechea, R-Eureka, whose district includes most of the major gold mines in Nevada, said he is concerned repealing the $5 tax rate would result in lower revenues to the state and local governments. Fellow Republicans Don Gustavson of Sparks and Barbara Cegavske of Las Vegas expressed concern the repeal would either prevent mining companies from coming to Nevada or persuade them to shut down operations here.

Sen. James Settelmeyer, R-Gardnerville, said repeal wasn’t the way to go, that if the state wanted more revenue from mining, it could look at reducing those exemptions.

When the vote came, they were the only opponents, with other Republican senators having signed on to the proposed amendment earlier in the session.

Backers of the repeal including the Progressive Leadership Alliance of Nevada have argued mining’s special protection is inappropriate, especially when gold is selling for upward of $1,500 an ounce and the state is strapped for cash to fund education and services for the needy.

To change Nevada’s Constitution, a resolution must be approved twice by the Legislature and then by a vote of the people. If and when the Assembly approves SJR15, it will have just the popular vote to complete the amendment process.