Gibbons Defends Executive Order Amid Finger-Pointing

By: Brendan Riley AP
By: Brendan Riley AP

Debate and finger-pointing continued Wednesday as Nevada lawmakers worked on a new "green" building tax break plan and traded arguments with Gov. Jim Gibbons over his order suspending their 2005 tax abatement law.

The new plan, to replace one vetoed Monday by the governor, was
expected to be introduced Thursday and discussed Friday in a joint
Senate-Assembly hearing.

As work on the new bill continued, the lawmakers' legal counsel issued an opinion that Gibbons' executive order temporarily suspending tax breaks for all but four energy-efficient building projects was "not valid and enforceable" because the governor went beyond his constitutional authority.

Gibbons countered that his order was "lawful, reasonable, appropriate and necessary," and didn't amount to an executive-branch end run around the 2005 law.

With lawmakers moving rapidly on the replacement measure, the
opinion challenging his executive order "should have no effect"
because the new proposal will fix the "unintended consequences"
caused by the 2005 law, Gibbons added.

If the 2005 law remains in place, the tax breaks will amount to hundreds of millions of dollars. The revenue loss has a direct impact on local governments and schools - and if Nevada schools fall short of a certain amount of taxes, the state must make up the difference.

That requirement worsens a revenue shortfall in the state's operating budget, complicating the legislators' efforts to adequately fund agency operations and complete a nearly $7 billion spending plan for the state for the coming two fiscal years.

Senate Commerce and Labor Chairman Randolph Townsend, R-Reno,
one of the legislators working on the new tax break plan, said Wednesday he wanted to make the record "extremely clear" that lawmakers shouldn't be blamed for confusion over the 2005 law.

Townsend also said the controversy over the tax breaks can have
"devastating" consequences because businesses look for consistency in government policies in deciding whether to start new projects.

"One thing you can do to undermine economic development and growth in this state is to be inconsistent in your regulatory policies," he said.

Senate Minority Leader Dina Titus, D-Las Vegas, also working on the replacement plan, criticized the state Tax Commission for not properly adopting rules to implement the 2005 law. "It is a mess. It is a disaster," she added.

Thomas Sheets, chairman of the Tax Commission, has said the panel carried out the intent of the 2005 law. Dino DiCianno, executive director of the state Taxation Department, has said there was nothing in the law clearly stating how the commission was to act.

Titus also urged lawmakers to strongly challenge Gibbons' executive order, which she said "goes far beyond" a governor's constitutional powers.

Gibbons, in vetoing SB567, a tax-break suspension measure approved May 3 by lawmakers, said Monday that efforts to modify the 2005 tax breaks should include public hearings "where taxpayer concerns can be discussed and debate and the long-term fiscal impact of any tax exemptions or abatements can be carefully analyzed."

"To date, those hearings have not occurred," Gibbons said, referring to the rushed move by lawmakers to give final approval to SB567.

The governor said legislative hearings are needed to establish a record "before we yank the rug out and just assume that we have no
liability here." He added that his action was "a very prudent course."

Gibbons said he based his decision in part on his own research, on discussions with outside lawyers and on a letter from Attorney General Catherine Cortez Masto, which he got in response to a
request for a legal opinion.

The legal analysis by the attorney general was needed because the tax break repeal approved by lawmakers amounted to "a rush by the Legislature to correct a rush by the Legislature in a special session in 2005," Gibbons had said.

Gibbons also had expressed concern that SB567 might lead to lawsuits against the state filed by individuals, corporations or contractors who relied upon the tax break law in starting green construction projects.

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


KOLO-TV 4850 Ampere Drive Reno, NV 89502
Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 7542552 - kolotv.com/a?a=7542552
Gray Television, Inc.