Legislature opposes AG on tax panel meeting

Wednesday, Aug. 31, 2005 | 10:37 a.m.

CARSON CITY -- Lawyers for the Legislature say the Nevada Tax Commission is allowed by law to conduct closed meetings on taxpayer cases -- an opinion that is contrary to one from the office of Attorney General Brian Sandoval.

A legal opinion issued Tuesday by the Legislative Counsel Bureau said the Nevada Commission "may deliberate and vote in the closed hearing" if the taxpayer requests confidentiality.

Sandoval's office filed suit against the tax commission in July claiming it violated the state open meeting law when it deliberated and reached a decision in a closed meeting to give the $40 million refund on the sales and use tax to Southern California Edison.

The attorney general says the commission can closed the hearing at the request of the taxpayer but after taking testimony it must deliberate and vote in public.

But the commission faces criminal penalties if any of the confidential information of the taxpayer is disclosed.

The legal opinion signed by Eileen O'Grady, a senior principal deputy legislative counsel, was addressed to Sen. Randolph Townsend, R-Reno, who said the tax commission was "in a terrible bind."

Townsend asked for the opinion.

He said the tax commission conducted this type of business for close to 20 years in a closed session if requested by the taxpayer. He said the real question was why the attorney general's office changed the policy. "I don't think the attorney general has the authority to make the policy unless authorized by the Legislature," said Townsend.

Townsend said the attorney general should have gave the tax commission notice up front that it was going to change the policy and then allow the commission to adopt its procedures going forward.

Sandoval said he has not seen the opinion from the Legislature. "Hopefully I will get it today."

But the attorney general said the policy in the law is to have meetings open to the public. He said a judge ultimately will make the decision. "I am looking forward to presenting our case to the court," he said referring to the suit that has been assigned to District Judge Mike Griffin in Carson City.

No hearing date has been set on the case, which is expected to end up in the Nevada Supreme Court.

The suit by the attorney general's office asks that the $40 million tax refund to Southern California Edison be voided and the tax commission be required to deliberate and vote in public.

Earlier this year, Senior Deputy Attorney General Keith Marcher issued a legal opinion that the tax commission must deliberate and make its decisions in open meetings.

Townsend said he doesn't understand why the attorney general's office didn't come to the Legislature that was in session this year to discuss the subject.

O'Grady, in her opinion, said the law does not specifically address whether the tax commission may deliberate and take action during a closed hearing. So it is appropriate to look at the legislative history for guidance, she said.

The 1983 Legislature addressed the issue of an apparent conflict between the open meeting law and the law that makes it a misdemeanor for a member of the Tax Commission to disclose information obtained from retailers on the sales and use tax.

O'Grady said the executive director of the state Tax Department testified before Senate and Assembly committees in 1983 that it is the "intent of the tax commission to open these meetings, which are presently closed, subject to a specific request for closure from the taxpayer."

O'Grady said that although the law does not contain an explicit exemption from the open meeting law for the tax commission, the history in the 1983 Legislature "clearly indicates that the purpose of the bill was to address a conflict between the open meeting law and the criminal penalties imposed."

The law says, "Except as otherwise provided in this section, any appeal to the Nevada Tax Commission must be heard during a session of the Commission which is open to the public. A hearing on such an appeal may be closed to the public if the taxpayer requests that it be closed."

O'Grady said the law "is a complete exemption from the open meeting law and pursuant to that exemption, the Nevada Tax Commission may deliberate and vote in a closed hearing requested pursuant to that provision."