The mining tax cometh

Big tax day in Carson City: A few hours after Speaker Marilyn Kirkpatrick released her new admissions tax, Senate Minority Leader Michael Roberson has released his Education Priority Act. (Or should I say I have a copy of it....)

That's the one with the tax on mining. But embedded in the draft is also a short-lived increase on financial institutions to get the education rainy day fund going.



The measure clearly outlines what a disaster the margins tax supposedly would be and poses this as an alternative, justifying it first:

Because Initiative Petition No. 1 would harm Nevada’s economic future and would not immediately and effectively improve Nevada’s public education system, the Legislature rejected the merits of the Initiative Petition by not enacting it within 40 days after the commencement of the 77th Session pursuant to Section 2 of Article 19 of the Nevada Constitution.

Ah, it rejected it, you see....

And then enacting something else:

4. The Legislature hereby further finds and declares that: 

 (a) At the general election on November 4, 2014, the voters are entitled to and deserve the 
opportunity to express their will and choose between different measures on the same subject of 
funding public education contained in Initiative Petition No. 1; and 
 (b) Because the Education Priority Act is a different measure on the same subject of funding 
public education contained in Initiative Petition No. 1, it is intended to provide the voters with 
that choice
The mandate in the bill draft:
That such increased revenue must be deposited and apportioned as follows: 
 (1) Two-thirds to the State Distributive School Account to be used only to support K-12 
programs to reduce class sizes or assist pupils with attaining proficiency in the English language. 
 (2) One-third to the Trust Fund to Stabilize the Funding of Education created by section 
33 of this act in the State General Fund to be used only when the Legislature determines that the 
money deposited in the State Distributive School Account from the new excise tax is insufficient --
to fund those K-12 programs and the Legislature appropriates money from the Trust Fund to 
provide supplemental funding for those programs. 
 (f) To provide an immediate source of revenue to build up reserves in the Trust Fund to 
Stabilize the Funding of Education, the Education Priority Act: 
 (1) Temporarily increases, for a period of 1 year, the payroll tax imposed on certain 
financial institutions pursuant to NRS 363A.130 from 2 percent to 2.5 percent; and 
 (2) Requires the increased revenue to be deposited in the Trust Fund and used only as 
provided by this act.

► It's contingent on the passage of SJR 15:

Without these constitutional limitations, the Legislature would be restored to its full unrestricted power to tax all aspects of mineral extraction.

And here's how the measure attempts to get around the property tax cap that would remain in the Constitution and that mining says would reduce its tax burden:

Under the Nevada Constitution, the Legislature may exempt personal property from the property tax. (Nev. Const. Art. 10, § 1(6)) Section 4 of this bill exempts from the property tax: (1) the gross yield and net proceeds from mineral extraction if the person who extracted the minerals is subject to the excise tax upon mineral extraction, but only when the gross yield and net proceeds are in the possession of that person; and (2) the royalties received from mineral extraction if the person who received the royalties is subject to the excise tax upon royalties.

AndSections 7-23 of this bill revise the existing tax upon minerals and royalties and designate it as an excise tax upon mineral extraction and royalties. (Chapter 362 of NRS) An excise tax is a tax imposed for the privilege of carrying on a business or engaging in an activity, and an excise tax is not an ad valorem or property tax because an excise tax is based on the privilege of using property, rather than the value and ownership of the property.

My favorite part: 

Finally, section 43 of this bill: (1) requires the Secretary of State to submit this bill to the voters as the Legislature’s competing ballot measure to Initiative Petition No. 1; and (2) bars any preelection court challenges seeking to prevent submission of this bill to the voters at the general election on November 4, 2014.

Bars any pre-election court challenges! Love that.

Let the legal and political games begin.