Key state legislators differ over the meaning of proposed rules designed to reduce the $900 million in tax breaks that Nevada businesses can get for building environmentally friendly buildings.
Assembly Speaker Barbara Buckley, D-Las Vegas, says businesses
seeking sales and property tax breaks must adhere to the criteria for "green construction" buildings set out in AB621, passed by the 2007 Legislature.
But Senate Commerce and Labor Chairman Randolph Townsend, R-Reno, says some companies got opinion letters supportive of their building projects from the state Tax Commission before the new law
Because of their reliance on a 2005 law governing tax breaks for green construction, they should get tax breaks regardless of what was stated in the 2007 law, Townsend said.
"It doesn't matter what the commission feels, thinks or said in previous opinion letters," Buckley said.
"We get elected to make those decisions. The statute must be followed. The Legislature trumps. We are the official policy-making body, and our statutes must be followed."
But Townsend said he specifically identified which companies qualified for sales tax breaks on the Senate floor just before the bill was approved by his house in June.
"If this is going to be revisited and they have a new standard to meet, you are inviting more litigation," Townsend said.
"We will be tied up the rest of our lives."
Their exchanges occurred during a meeting Thursday of the Legislature's Subcommittee to Review Regulations.
Under state law, the Legislature must review and endorse regulations drawn up by state agencies before they go into law.
The state Tax Commission must prepare regulations that implement the
law approved by the Legislature.
Buckley maintained the opinion letters companies received did not constitute "pre-construction contracts."
Such contracts were part of the criteria needed by a company to qualify for the tax breaks.
During the June 1 floor vote on AB621, Townsend said the legislation eliminated sales tax breaks for all buildings except the CityCenter project being built by MGM-Mirage; Fontainebleau; the Venetian's Lido-Palazzo Resorts projects; the Molasky Corporate Center; the Echelon Place project by Boyd Gaming, and the Panorama Towers project.
All are in Clark County.
Legislators revised the older green construction law after learning it would result in more than $900 million in sales and property tax breaks, reducing funding for local government and public schools.
The new law is expected to cut the tax breaks in half.
State Taxation Director Dino DiCianno told subcommittee members he wanted them to look at the tentative regulations designed to put AB621 into effect to ensure they meet legislative intent.
The Tax Commission meets Oct. 1 to look at the regulations.
Hearing the clashing views from legislators, DiCianno admitted he was "a little confused" on what he should do.
He agreed to meet with Legislative Counsel Brenda Erdoes and try to come up with proposed regulations that meet the intent of the statute.
The issue could be discussed again at the Sept. 18 meeting of the Legislature Commission, a group of legislators who handle business when the Legislature is not in session.
While sales tax breaks remained unresolved, the legislative panel had only minor concerns about a separate rule proposed by the state Energy Office that would require owners of new energy-efficient buildings who want to qualify for "green" property tax breaks to ban smoking.
The rule proposed by Nevada Energy Director Hatice Gecol would prohibit smoking in any "green" building seeking property tax cuts ranging from 25 percent to 35 percent.
A 2005 law allowed tobacco to be used in green buildings, but Gecol has said the 2007 Legislature wrote a nonsmoking provision into the law.
Final adoption of the Energy Office regulation will occur at a hearing expected in early October.