Last month, even SJR 15 seemed to be in deep trouble. After their surprise setback in 2011, the mining industry has been juicing up to shut this down. Then on what was thought to be a mundane Tuesday, Michael Roberson unleashed what's become March Madness in Carson City with his proposed mining tax alternative to IP 1.
Now, all of a sudden, we're seeing a frenzy of talk and action on what was once "The Dirty T Word". Of course, the "tea party" radical right still sees it as a dirty word. And it's escalating what was already an ugly civil war in the Nevada Republican Party over it. Yet now, despite that, there's a growing desire to take some sort of action on tax reform in Carson City.
But funny enough, the initiative that sparked the new tax talk presents a curveball for #NVLeg. Nevada law is clear that the Legislature can approve the Governor's recommended alternative should they not approve the actual initiative. Yet as we've discussed before, Roberson doesn't have Brian Sandoval's support for his mining tax alternative. And now, Legislature leaders don't even want to vote on The Education Initiative. So what happens next?
Amicus Nevada didn't mince words earlier today in giving #NVLeg leaders a stern warning.
Whereas Ralston sees one problem with that part of Article 19, Section 2, (namely, what does “approved by the Governor” mean?), I see other problems: (1) may the Legislature propose an alternate measure after the 40-day consideration period on the petition has expired without expressly rejecting it; (2) must the Governor recommend an alternate before the Legislature may enact one; (3) would the Governor have an absolute (or even a qualified) veto over an alternate; and (4) what constitutes “a different measure on the same subject”?
In my view, if the Legislature does not affirmatively reject the petition within 40 days of its submission, the Legislature loses power to propose an alternate measure. Remember, the Constitution requires that the petition “shall be enacted or rejected by the Legislature . . . within 40 days.” Nev. Const. art. 19, § 2(3). If the Legislature does not enact the petition, the Constitution instructs “If [the petition] is rejected by the Legislature, or if no action is taken thereon within 40 days, the Secretary of State shall submit the [petition]” to the voters at the next general election. Id. (emphasis added). Thus, there is an operational distinction between rejection and rejection by default. In both cases, the petition goes to the voters. But in the case of rejection by default (i.e. the Legislature failing to act within 40 days), the Legislature loses power to propose an alternate. [...]
The last issue I want to briefly (ha!) discuss is whether a mining tax measure could be an alternate to IP 1. Steve Sebelius is of the opinion that yes, a mining tax could be the legislative alternate to the margin tax in IP 1. The Senate Republicans who proposed a mining tax measure as an alternate seem to agree. I don’t think that’s correct, at least not without some creative drafting. Senate Joint Resolution 15 of the 75th Session proposes to repeal the constitutional limitations on mining taxation. That measure, should it pass this legislative session, will go on the ballot in 2014. It cannot be the alternate to IP 1 primarily because they are separate measures, one proposing a change to law, the other a change to the Constitution. Both could be enacted as they are not mutually exclusive options, unlike a true alternate under Article 19, Section 2. The only way I see a new mining tax (or a higher tax rate) being a proper alternate to IP 1 is it must be conditioned on S. J. Res. 15′s ratification by the voters, or it must propose changes to law that do not implicate S. J. Res. 15 or the underlying provisions in the Constitution.
Assuming the Legislature timely rejects IP 1 this session, it will preserve its power to propose an alternate measure. Should the Legislature propose an alternate relating to mining, I’d expect nothing less of a full on legal onslaught to prevent the alternate from appearing on the ballot, whether it be through a gubernatorial assist (with a veto) or through legal challenges, on constitutional and procedural grounds, should the Legislature find itself caught up in a dispute with the executive branch over the scope of the veto power in the case of initiative measures. And with most of these tax issues decided in the 11th hour of a session as part of the endgame, I agree with Ralston: 2013 could be 2003 all over again.
¡Dondé los yikes! Indeed, this is increasingly feeling deja vu. Just as it was in 2003, this 2013 tax fight may head to the courts very soon if Roberson's IP 1 alternative catches enough fire to pass. Yet despite this striking similarity, there may be one major difference now. We'll get to that in a moment.
There are certainly many challenges ahead in Carson City. There are definitely plenty of legal questions. And there are many political hurdles to overcome. But now, finally, "The T Word" has become THE WORD in the Nevada Legislature. Mining industry lobbyists are finally shaking in their boots... Along with other big "bid'ness" lobbyists. And progressive activists have an unprecedented opportunity to change the game in Carson City for good on the entire subject.
Just eight weeks ago, this all looked like the ultimate taboo in the Nevada Legislature. Why rock the boat, especially when "Captain Sandoval" won't accept any of the sort? But now, a unique combination of "budget cut fatigue", uncertainty in federal funding, pent up frustration over certain corporate special interests getting away with paying next to nothing, and the changing political landscape of Nevada has created this historic opening. Regardless of the fate of Roberson's IP 1 alternative, "The T Word" is no longer taboo.
The opening is here. So who will take it? And what will ultimately pass?
It just remains to be seen what can be taxed, what will be taxed, and what the courts will allow the people to decide to be taxed next year.