Tax Commission Weighs in on Green Building Tax Breaks

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The Nevada Tax Commission weighed in publicly for the first time Monday on a budget controversy involving "green" building tax abatements, with its chairman saying that the panel simply carried out the intent of a 2005 law.

"The language in the statute is what you have to go on to try and determine intent. We followed what we thought was the law and the spirit and the letter of what they gave us," Thomas Sheets said following a commission meeting in which he made the same comments.

The measure was pushed in 2005 by former Assemblywoman and now
Clark County Commissioner Chris Giunchigliani, and the concept was
discussed in numerous hearings before several legislative committees.

Advocates included representatives of MGM Mirage, who testified about its planned "green" development at City Center in Las Vegas. But Clark County officials said they couldn't determine the fiscal impact without knowing how many buildings would qualify.

Dino DiCianno, executive director of the state Taxation Department, said Monday that no one asked the department for a fiscal review of the 2005 measure.

And when the department loosened its standard for applying the exemptions in June 2006, no one testified in opposition.

"No one came forward in opposition to the policy that the commission rendered in June. So we moved forward," DiCianno said.

State lawmakers have said the commission didn't make any rules for granting the exemptions, while other agencies such as the Economic Development Commission and the state Energy Office did.

"Nowhere in that bill did it require the commission to promulgate regulations," DiCianno said.

A new bill, SB567, passed by both the Senate and Assembly last week suspends any action by any state agency on the tax exemptions. Lawmakers have said it could cost hundreds of millions of dollars in lost revenues to counties and schools.

DiCianno said he does not know how much the exemptions will add
up to, but it could potentially be hundreds of millions of dollars. The five companies approved for an exemption have not completed their projects, so the extra material costs for going green are still not known.

"It is significant, there's no question about that," DiCianno said.

In 2005, the idea was reviewed by the Assembly and Senate government affairs committees, as well as Assembly Ways and Means
and Senate Commerce and Labor committees.

Jon Wellinghoff from MGM told the Senate Commerce and Labor Committee during a May 2005 hearing about the company's plans to
build a large development following green standards.

"We are in the process of considering construction of facilities totaling 27 million square feet, and we are interested in moving forward as quickly as possible," Wellinghoff said.

Other organizations that testified on the bill included the state Public Works Board, Public Utilities Commission of Nevada, city of Las Vegas, Clark County School District, Toiyabe Chapter Sierra Club, Nevada Power Co., Commission on Economic Development, the Southern Nevada Home Builders Association, and American Chemistry Council.

MGM has qualified for $80 million exemption in local sales taxes under the bill.

MGM spokesman Alan Feldman said Friday the City Center project will produce benefits for the state that far outweigh the incentive they qualified for, including 12,000 permanent jobs, and revenue from sales, room, property and gaming taxes.

"We are clearly talking about something that is going to produce over time hundreds of millions of dollars in tax revenues for the state," Feldman said.

(Copyright 2007 by The Associated Press. All Rights Reserved.)