Gibbons Researches Bill to Erase Green Building Tax Breaks

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Gov. Jim Gibbons said Tuesday he's asking the attorney general for advice in efforts to determine whether his signing of a bill to erase "green" building tax breaks would leave the state open to costly lawsuits.

The Republican governor, who has said he's considering a veto of
SB567, the tax abatement repeal, also said he's also having research done to determine who has qualified so far for the breaks approved by legislators in 2005.

The legal analysis by Attorney General Catherine Cortez Masto is needed because the tax break repeal approved last week by lawmakers amounts to "a rush by the Legislature to correct a rush by the Legislature in a special session in 2005."

Gibbons said he wants to make sure that SB567 "doesn't obligate the state to an expensive piece of litigation down the road," filed by individuals, corporations or contractors who relied upon the tax break law in starting green construction projects.

The research being done on the extent of the tax breaks since 2005 is needed because "the previous administration didn't keep accurate records," said Gibbons, who took over in January as former Gov. Kenny Guinn left office.

Several companies have been approved for tax exemptions. One company, MGM Mirage, qualified for up to $80 million under the 2005
law, according to lawmakers.

Gibbons expected to receive SB567 on Tuesday. A decision on a veto would have to be made by no later than Monday.

SB567 suspends action by any state agency on the tax exemptions.
Lawmakers have said that the tax breaks could cost hundreds of
millions of dollars in lost revenues to counties and schools.

If Nevada schools fall short of a certain amount in property tax revenue, the state must make up the difference from its general fund. That's what lawmakers are most worried about in trying to complete work on a nearly $7 billion budget for the coming two fiscal years.

Gibbons said he had asked legislators to ensure that SB567 included a "grandfather" clause to preserve tax breaks for qualifying projects. But the governor said he was told that a specific definition wasn't included in the bill out of concern that it could add to the potential for lawsuits.

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