The Nevada Supreme Court was urged Tuesday by the state attorney general's office to overturn a judge's decision that dismissed a lawsuit against the Nevada Tax Commission for a closed-door vote giving a big tax refund to a utility.
Deputy Attorney General Keith Marcher, challenging the Carson City District Court ruling that favored the tax panel's vote to give Southern California Edison a $40 million tax refund, said panel members by law were supposed to deliberate and vote in public.
Lawyers Thomas "Spike" Wilson, representing the commission, and Norm Azevedo, representing Southern California Edison, countered that the law also provides for exceptions - and for many years other state attorneys didn't caution the commission against closed sessions.
While there was no immediate ruling from the high court, several justices questioned how tax commissioners could deliberate in public without disclosing information provided to them on a confidential basis in a tax dispute.
Marcher replied that "every nuance of the case" that was discussed in a closed hearing doesn't have to be repeated during open deliberations.
But Wilson countered that he didn't see how thorough deliberations would be possible.
The Tax Commission ruling - which would give some Nevadans a break on utility bills - exempted Southern California Edison from $40 million in sales taxes that otherwise would have been due on coal it burned between 2001 and 2003 in a now-closed southern Nevada power plant.
The law governing Tax Commission proceedings was changed by the
2007 Legislature as a result of the refund controversy.
Now, the commission can close a hearing to review proprietary or
confidential information - but a taxpayer no longer can simply demand a closed proceeding.
Wilson said the 2007 legislation supported the Tax Commission's position in the refund dispute - although that argument has been disputed by key lawmakers, including Assembly Speaker Barbara
Buckley, D-Las Vegas, who said the lawmakers weren't supporting
The Tax Commission currently is working on regulations to implement the new law, AB433, but the Nevada Press Association said last week that a proposed rule provides too much leeway in deciding to close hearings.
Under the legislation, a taxpayer can request a closed hearing and the commission then evaluates whether some information being submitted should be protected.
The proposed rules define proprietary information as a taxpayer's bank records, financial statements, customer lists, vendor lists and trade secrets.
But they also allow closed sessions for discussion of "other information which, if disclosed, would put a taxpayer's business at a competitive disadvantage."
Barry Smith, executive director of the NPA, said that language isn't in the law and greatly expands on the law's wording.