Nye County sues state over distribution of federal money

Tuesday, July 27, 1999 | 2:05 a.m.

Nye County has filed two lawsuits accusing state officials of illegally diverting $66 million in federal funds to other Nevada counties.

According to the lawsuits, the money has come from the leasing of federal lands in Nevada for the development and sale of minerals, oil, gas and geothermal resources.

"Nye County is substantially impacted socially and economically by the operations of the federal lessees generating the royalties paid to the United States," the complaints allege.

According to the lawsuits, Nevada has received more than $165 million from the leasing of federal lands since 1975, and an estimated 40 percent - or $66 million - of that money was generated within Nye County.

However, the documents allege, "the overwhelming bulk of monies received by Nevada" are distributed to school districts in Clark and Washoe counties.

Nye County, which claims to get less than 2 percent of the money, is represented by Las Vegas attorney Jerald Wilkerson. Wilkerson filed both complaints July 12. He said the dispute has been brewing for several years.

"There had been efforts in the last two legislative sessions to reach a compromise," the attorney said. He said Nye County officials decided to take legal action after both attempts failed.

One lawsuit, filed in U.S. District Court in Las Vegas, seeks a ruling that Nevada's method of distributing the funds violates federal law. It also seeks an injunction that would stop Nevada from distributing future funds until the litigation is resolved.

The other lawsuit, filed in Nye County District Court, asks for an award of $66 million in damages.

Both lawsuits name state Treasurer Brian Krolicki and Nevada Controller Kathy Augustine as defendants. The defendants have referred the cases to the state attorney general's office.

Senior Deputy Attorney General Randy Munn declined to comment on the allegations in the lawsuits. He said the defendants have until July 30 to respond in writing to Nye County's motion for a preliminary injunction.