Third mining tax proposal emerges as ‘olive branch’ to industry

By: - August 2, 2020 5:34 am
loader & truck

(Photo: U.S. Mine Safety and Health Administration.)

In an effort to compromise with the mining companies, Nevada lawmakers have introduced a third proposed constitutional amendment to change how the state taxes the only industry enshrined in the Nevada Constitution.

Assembly Joint Resolution 2 raises the existing cap on net proceeds of minerals from 5 percent to 12 percent. That makes it significantly different than the two previously introduced proposals, Assembly Joint Resolution 1 and Senate Joint Resolution 1, which both propose taxing mining companies at 7.75 percent of their gross (as opposed to net) proceeds. Those dual proposals only differ in how they allocate the revenue collected by mining taxes.

The Nevada Assembly passed all three resolutions in a marathon hearing that ran late Saturday into the wee hours of Sunday. SJR1, having already passed the upper chamber, is now greenlit for consideration during the 2021 Legislative Session. The two Assembly resolutions are headed to the Nevada Senate for consideration Sunday, where they are expected to pass.

If that does happen, the 2021 Legislature could pass one of the resolutions, which voters would then decide the fate of during the 2022 general election.

Speaker Jason Frierson called AJR2 an effort to compromise, “an olive branch with the industry” and “a negotiated agreement.”

He made it clear during a hearing Saturday that, as part of that negotiation process, lawmakers agreed on companion legislation for the next regular session to ensure that the 12 percent maximum only applies to companies whose gross proceeds exceed $20 million annually.

That means it would apply to 10 of the 104 companies — all of them gold mines.

According to Legislative Counsel Bureau staff, if you run the mining industry’s 2019 net proceeds through the tax structure detailed in AJR2, the mining industry would have paid $260 million in taxes instead of $113 million.

Meanwhile, AJR1 and SJR1 would bring in an estimated $607 million.

The revenue raised by AJR2 would continue to be split between the counties where the minerals are extracted and the state general fund, as it is currently. However, instead of being split roughly 53 percent to 47 percent in favor of the county, it would essentially keep the county revenue whole and more than triple the amount going toward the state general fund.

Again using the 2019 numbers, LCB staff estimated the counties would have received $60 million of the $260 million generated and the state general fund would have received $200 million.

The Nevada Mining Association and Newmont testified in neutral on the resolution.

Progressive and environmental groups split on their positions. The Progressive Leadership Alliance of Nevada and Nevada Conservation League expressed support. The Center for Biological Diversity expressed opposition. Battle Born Progress testified in neutral.

Both Assembly resolutions cleared that chamber on party lines. SJR1 did not. Democratic Assembly members Maggie Carlton, Richard Carrillo, Dina Neal and Ellen Spiegel voted with Republicans against that proposal.

“More vetting needs to take place,” said Speaker Frierson prior to the chamber’s back-to-back-to-back votes. “It’s called next session. These are three opportunities to have those conversations.”

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

April Corbin Girnus
April Corbin Girnus

April Corbin Girnus is an award-winning journalist with a decade of media experience. A stickler about municipal boundary lines, April enjoys teaching people about unincorporated Clark County. She grew up in Sunrise Manor and currently resides in Paradise with her husband, three children and one mutt.