Costly Nevada Legal Fight Over Taxes Was Unnecessary

It was a senseless and futile gesture, but our Democratic lawmakers and governor were just the ones to do it.

Despite the fact Nevada voters in 1994 and 1996 amended the state Constitution to declare “an affirmative vote of not fewer than two-thirds of the members elected to each House is necessary to pass a bill or joint resolution which creates, generates, or increases any public revenue in any form,” the 21-member state Senate approved the extension of taxes and fees that were supposed to be curbed with a 13-8 vote, one vote short of the constitutionally mandated two-thirds. Gov. Steve Sisolak signed the tax extensions into law.

The eight Republican senators who voted against the tax extensions and three companies that would have to pay the higher taxes have sued in district court in Carson City, asking the court for a temporary restraining order and a permanent injunction against enactment of the laws.

The Democrats charged ahead with tax and fee extensions after their compliant Legislative Counsel Bureau (LCB), the lawmakers’ lawyers, issued an opinion that a two-thirds vote was not necessary since the taxes were not being “raised” but merely allowed to continue at a rate that was scheduled to be reduced, paying no heed to the fact the bills in question “generate” public revenue. Asked nearly the same question in 2011, 2013 and 2015, the LCB said a two-thirds vote was necessary.

When Republicans first threatened to sue, Sisolak confidently stated, “We’ve got legal opinion from LCB that, you know, a simple majority is what’s needed. I’ve been in government for 20 some-odd years, and if you don’t trust your attorneys, you’ve got a problem. So I’m confident that the attorneys gave us a good opinion. We’ll move forward from there.”

After the suit was actually filed, a somewhat less assured Sisolak was quoted by the pressas demurring, “I remain absolutely committed to taking action if necessary following the court’s decision to ensure our schools continue to receive the total amount of funding approved by the Legislature for the … biennium.”

According to the governor’s executive budget at the end of that biennium there is expected to be a rainy day fund balance of $415.2 million, more than enough to cover the $98 million that the extension of the modified business tax rate and the $7 million that the $1 Department of Motor Vehicles technology fee extension are expected to generate.

The modified business tax extension is scheduled to begin being collected on Oct. 1 and the technology fee was set to end on July 1, 2020.

So, what was the point in pushing the constitution-ignoring legislation?

Senate Republican Leader James Settelmeyer said in a statement released to the media after the suit was filed, “We have checks and balances for a reason and eroding the two-thirds requirement is an unprecedented disregard for the constitution and creates a dangerous precedent. While there was ample money to fund education and other vital programs, Sisolak and (Senate Democratic Leader Nicole) Cannizzaro acted recklessly and their behavior created an unnecessary constitutional crisis at the expense of over 23,000 small business in Nevada.”

The lawsuit itself makes abundantly clear the stakes involved here: “This action involves an issue of of significant public and statewide importance as it seeks to uphold and protect the constitutional amendment proposed by citizen ballot initiative adopted and overwhelmingly approved by Nevada voters in 1994 and 1996. As provided in Article 1, Section 2 of the Nevada Constitution, political power is inherent in the people. Government only has power from the consent of the governed, and the residents and citizens of the State of Nevada twice voted strongly in favor of amending the Nevada Constitution to add the two-thirds requirement, and the two-thirds requirement has, at least prior to 2019, been applied consistently to legislative bills extending sunsets by the Nevada Legislature.”

The Republican senators and three companies, of course, are asking for recovery of reasonable attorney fees and costs. So, the taxpayers are likely to get stuck with all the costs from both sides.

The suit further noted that lawmakers “had enough money to fund the State’s budget without the public revenues created, generated or increased as a result of the changes to the payroll tax …”

So the passage with less than two-thirds votes was senseless, and, once the courts correctly rule that a two-thirds vote was constitutionally necessary, it will have been futile.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Nevada Legislature

Source: Costly legal fight over taxes was unnecessary


Valley Electric’s board considers changes to net metering policy

Hundreds of Valley Electric Association Inc.'s members that take advantage of the co-op's net metering program could see a change in the current rates that are paid. Valley's board will consider a tiered system at the co-op's next board meeting.

By Jeffrey Meehan ~ Pahrump Valley Times

June 21, 2019 - 7:00 am

Valley Electric Association Inc.’s board of directors is set to mull over potential changes to the co-op’s current net metering policy.

The new policy, set to be taken up at Valley’s June 26 board meeting, would lower the current rate of 100 percent, or 11.9 cents per kilowatt-hour, to a tiered system where those with solar would get 75-95 percent of the current rate, “depending on when the member-generator interconnected with the VEA grid,” according to a news release from Valley.

That comes out to 9 cents a kilowatt hour under the 75 percent bracket, according to Interim Chief Executive of Valley Electric Association Inc. Dick Peck.

According to the co-op, the new policy would mirror Assembly Bill 405 on net metering, which was signed into law in 2017 by then-Gov. Brian Sandoval. Net metering is where those with rooftop solar get a credit for the excess energy they return to the grid.

Valley is exempt from the law but offers the program to local customers wanting to install solar, according to a news release from the co-op.

The co-op currently offers 100 percent, or 11.9 cents per kilowatt-hour for the excess energy it sends back to the grid.

Tiered system

Under the proposed net metering policy, VEA policy No. 136, members of Valley installing solar will follow a tiered system, which will be “tied to the date that a completed application to install a net-metering system was received,” according to Valley’s news release.

According to Valley, the first solar generator interconnected to the co-op in 2006 and has grown into the hundreds since that time.

Overall, the system is set that the earlier an application was put in, the higher the reimbursement rate.

For Tier One, where members who interconnected with Valley prior to the generation amount exceeded 1.25 megawatts, those members will receive 95 percent of the full retail rate of 11.9 cents per kilowatt hour. The 1.25 megawatt threshold was crossed in 2015, according to Valley’s release.

Tier Two includes those members that brought the generation from 1.25 to 2.5 megawatts, which occurred in 2017. Under that tier, members will be paid 88 percent of the full retail rate.

Tier Three will be paid 81 percent of the full retail rate for excess energy. This group brought the generated amount from “2.5-3.75 megawatts” in 2019.

Members falling under Tier Four will be reimbursed 75 percent of Valley’s full retail rate.

“The majority of VEA’s generation of renewable energy by members comes in the form of solar, but some members generate power with wind turbines,” Valley’s release stated. “Since the total number of applications in house would bring the system size to nearly 6 megawatts, virtually all new applications would be reimbursed at 75% of the retail rate.”

“With these revisions, Valley Electric will be in line with state law, which serves to encourage the development of solar generation,” Peck said in a news release. “The wholesale power rate is approximately 4 cents per kilowatt-hour, but we had been paying our member-generators 11.9 cents for their excess power. We have to always remember that members who do not generate renewable energy are subsidizing those who do.”

According to Peck, the number of member-generators has grown significantly in the past couple years, which is prompting the need for revisions to the co-op’s policy.

In a news release, Peck estimated that Valley paid $230,000 for power under its net metering program in 2018.

Valley currently has over 600 generators that participate in Valley’s net metering program, equating to approximately 3 percent of the membership, according to Valley’s release.

The number of generators did not pass 100 until 2014, according to Valley’s release.

The topic will be taken up at Valley’s next board meeting at the co-op’s administrative offices in Pahrump. The meeting is scheduled to begin at 8:30 a.m. at 800 E. Highway 372.

Source: Valley Electric’s board considers changes to net metering policy


With towns in Northern Nevada growing, the BLM reports more unauthorized uses of federal public land

It’s common to hear about property disputes among neighbors. But what happens when your neighbor is the federal government?

This is a question that occupies an increasing amount of time for Victoria Wilkins, an acting field manager for the Bureau of Land Management’s (BLM) Sierra Front division. From a BLM district office tucked away in Carson City, Wilkins says the agency is seeing more issues in the region — from Reno to Gardnerville — over where the federal domain begins and private land ends.

The BLM is charged with managing vast stretches of public land — about 67 percent of Nevada — for a variety of activities, including grazing, recreation, mining, wild horses and conservation. Although much of the agency’s landholdings are expansive ranges located in faraway valleys, many BLM parcels encircle private land or sit adjacent to it. As towns around the region grow, Wilkins said her office has seen more unauthorized uses of BLM land. The intrusions into the federal domain are often accidental (BLM land is not always marked), but they are still illegal.

“The more people we get concentrated in an area, the more these issues seem to be surfacing,” Wilkins said during an interview at the Carson City District before Memorial Day weekend.

Three weeks earlier, Wilkins said the district office caught someone blading a road into public land. Wilkins said the office gets a report like that at least once a month. There are other types of realty trespass too. She pointed to cases where landowners have accidentally built parts of their homes or sheds on public land, often because of faulty surveying. Or there are cases where private landowners will use a public road for private access without proper right-of-ways. A more recent form of trespass has been the construction of fuel breaks, areas of land where vegetation has been strategically removed to stunt runaway fires.

The BLM district has also seen an inexplicable uptick in abandoned vehicles. Where the local BLM officers used to see five or 10 abandoned vehicles, they have reported 47 this fiscal year.

“We don’t know [why],” Wilkins said. “We’re trying to figure that out.”

Across the Mountain West, more and more residents are purchasing homes near undeveloped land, especially as cities and even rural towns push the rural interface outward toward wildland. The trend has often placed more pressure on land managed by the agency. And in some cases, the ownership divide is unclear without a survey or map. In other cases, newcomers to the area can be unfamiliar with the rules governing public land, which can vary between regions.

Bret Birdsong, a UNLV law professor and a former deputy solicitor for the Department of Interior, said that the issues are especially prevalent in areas where human development abuts wildland.

“Part of the big picture is there are a lot of border lands where BLM land is bordering private land,” Birdsong said. “And just as with private land, it’s not all that unusual for there to be disputes or encroachments that occur because boundaries are not always clearly marked.”

The BLM deals with a variety of trespass issues that are not limited to land ownership. In fact, the concept of trespassing on public land is at the heart of the agency’s ongoing legal dispute with Bunkerville rancher Cliven Bundy. After Bundy stopped paying fees to graze his cattle on public land — the BLM requires ranchers to operate under 10-year grazing permits — a court order found that he was trespassing on the federal domain by illegally running his cattle.

Other cases of trespass include the unlawful removal of minerals, which are managed by the BLM. In April, the U.S. Department of Justice reached a settlement with a Colorado oil and gas company over drilling in a railroad right-of-way without permission from the land agency.

Those cases are different. Those trespasses were willful. The trespasses reported to the BLM’s Carson City District, which includes the growing region around Reno, are often accidental.

Boris Poff, an acting assistant field manager in the BLM’s Las Vegas Field Office, said that more people are reporting trespass because more people are using public land. But Poff, who works in the lands division, said he is not sure that’s correlated to an overall increase in trespass.

“[For] most people we deal with,” he said, “it’s an honest mistake.”

Poff said the agency tries to settle many of the land issues amicably. Still, the BLM’s Southern Nevada division opened up 13 trespass cases over the last year and has 21 ongoing cases.

On May 7, the Carson City District Office sent out a news release reminding residents to check land ownership rules before they build a road, fuel break, fence or other structure. But the news release also cautioned that trespassing could come with consequences, including fines. In some cases, such as when part of a house is built on federal land, the agency can require a property owner to pay the fair market value for the land. When a trespass is willful, the penalty can be twice or three times the market value for the land or the charges for using a public road.

One or two land trespasses might seem benign, but they can add up. Birdsong said there are several issues at stake for the BLM, especially if the trespass occurs in sensitive habitat, like riparian areas. He said the agency also has a responsibility to manage the land for the public. And if the agency does not enforce its rules, it could signal to bad actors that it’s open season.

Wilkins said that she suspects that many trespasses result from a lack of understanding around public land, access and right-of-ways. But it’s becoming such a problem that title companies are aware of the issue, she said. And the office is now considering educating real estate agents.

“[One] thing that we’ve been talking about is doing some educational workshops with real estate agents so that they can help their clients identify potential pitfalls,” Wilkins said. “A lot of people want to live next to public lands, but they don’t always think about the things that can happen on the adjacent public lands — dirt biking, hiking, the horse use, vegetation removal projects, fire.”

Source: With towns in Northern Nevada growing, the BLM reports more unauthorized uses of federal public land


See you in court, governor

by Thomas Mitchell

So, the governor is confident that the extension of the modified business tax rate will withstand a legal challenge, according to both the Las Vegas newspaper and the online Nevada Independent.

“We’ve got legal opinion from LCB (Legislative Counsel Bureau) that, you know, a simple majority is what’s needed,” Gov. State Sisolak was quoted as saying Tuesday. “I’ve been in government for 20 some-odd years, and if you don’t trust your attorneys, you’ve got a problem. So I’m confident that the attorneys gave us a good opinion. We’ll move forward from there.”

Be prepared to move back, governor, by nearly $100 million in your budget for the next two years — the budget that promises 5 percent raises for teachers.

Republicans have promised a legal challenge if the business tax was extended without a two-thirds majority of both houses as prescribed by the Constitution. The tax extension passed the Senate on a party line vote of 13-8, one vote shy of two-thirds.

Voters in 1994 and 1996 amended the Nevada Constitution to state “an affirmative vote of not fewer than two-thirds of the members elected to each House is necessary to pass a bill or joint resolution which creates, generates, or increases any public revenue in any form, including but not limited to taxes, fees, assessments and rates, or changes in the computation bases for taxes, fees, assessments and rates.”

The modified business tax passed in 2015 by a two-thirds vote of lawmakers contained specific language saying the rates would be reduced in 2019 if tax revenues exceeded a certain level, which they have.

But the compliant LCB told the majority Democratic lawmakers and the Democratic governor, “It is the opinion of this office that Nevada’s two-thirds majority requirement does not apply to a bill which extends until a later date or revises or eliminates a future decrease in or future expiration of existing state taxes when that future decrease or expiration is not legally operative and binding yet, because such a bill does not change but maintains the existing computation bases currently in effect for the existing state taxes.”

The bill clearly “generates” revenue that two-thirds of the lawmakers in 2015 said would decrease as of July 1, 2019.

The state Constitution is not something to tamper with. Republicans should take it to court and make the Democrats abide by the rules, even if it means a special session would have to called. In fact, the GOP lawmakers should go directly to the state Supreme Court for an opinion that would binding, unlike the LCB opinion “that future decrease or expiration is not legally operative and binding yet …”

Asked nearly the same question in 2011, 2013 and 2015, the LCB said a two-thirds vote was necessary. So, governor, when do you trust your attorneys?

Gov. Steve Sisolak, right, talks to reporters about legislative session. (R-J pix)

Source: See you in court, governor