Utility: Nevada can’t sue to avoid payment

Wednesday, Aug. 31, 2005 | 11:03 a.m.

CARSON CITY -- Southern California Edison says the Nevada attorney general's office is prohibited by law from filing suit to void a $40 million tax refund that the Nevada Tax Commission gave to the company.

The attorney general's office filed suit in July, alleging the Tax Commission violated the open meeting law when it deliberated and reached a decision in a closed meeting to give the $40 million refund on sales and use tax to Edison for payments the company made from 2001 to 2003 on equipment.

Norman Azevedo, the utility company's attorney, said the problem for Nevada is that lawyers for the attorney general's office sat in the Tax Commission's four closed-door meetings regarding the Southern California Edison case and never objected to handling the matter behind closed doors.

In a motion filed Aug. 25, Azevedo wrote that "the involvement of the attorney general's office in the closed Edison hearings, makes clear that this lawsuit is simply a backhanded way to appeal the commission's decision."

If the attorney general's office had objections to the closed sessions, it should have made them when the sessions were starting, Azevedo said.

The Attorney General's office says it never advised the commission it could meet in private, but further complicating things is the fact that the attorney general's office represented the state Taxation Department and the Tax Commission in the closed meetings.

The commission ruled in favor of the company and against the Tax Department, which also was represented by the attorney general's office.

The reasoning behind the Tax Commission's decision is not known because deliberations were done in private.

Edison is asking District Judge Mike Griffin for permission to intervene in the suit since it is not a defendant. It says it wants to protect its property interest.

The attorney general's office seeks to invalidate the $40 million refund and to require the Tax Commission to deliberate and vote in open session whether to approve the refund. It initially suggested the Tax Commission rescind its vote, go into public session and discuss the case and vote.

But the commission declined. When the attorney general's office filed suit, the commission was allowed to hire Reno lawyer Thomas "Spike" Wilson to defend it. Wilson has not yet filed his answer to the complaint.

"It was only when the attorney general finally lost the Edison appeal that he (the attorney general) said the manner in which the commission handled the matter was improper," Azevedo said.

"This is nothing more than an attempt by the attorney general's office to gain a second bite of the apple," he said.

The conflict stems from policy dating back to 1983 in which the Tax Commission closes hearings at the request of taxpayers' whose cases are being heard.

Until now the attorney general's office has never filed a complaint about the practice, Azevedo said.

Senior Deputy Attorney General Keith Marcher issued a legal opinion this year saying that the Tax Commission must deliberate and make its decisions in open meeting.

He said the commission can discuss "relevant information" about the case, but the confidential information should be kept confidential. No hearing date has been set on the case.

The attorney general's office also filed a second suit involving Leisure Homes of Reno that protested paying the room tax on timeshare units in Washoe County. The statutes of limitation has run on that case so the attorney general's office did not seek to invalidate the refund, only to have the commission cited for a violation of the open meeting law and a court order to prohibit the commission from doing it again.