Friday, July 8, 2005 | 11:11 a.m.
CARSON CITY -- The state Attorney General's Office filed lawsuits against the Nevada Tax Commission on Thursday, accusing the commission of violating the open meeting law.
"This is an open government state," Senior Deputy Attorney General Neil Rombardo, who filed the lawsuits, said.
The commission could have avoided the lawsuits if it had followed his advice Thursday, Rombardo said.
The Attorney General's office had advised the commission to rescind the decision it had made behind closed doors in May which gave a tax rebate of more than $40 million to Southern California Edison Co. But at Thursday's meeting, the commission refused to follow that advice.
If the commissioners had wanted to re-consider granting the rebate, they could have done so -- in an open public meeting, Rombardo said. The lawsuit he filed over the Southern California Edison rebate asks Carson City District Judge Mike Griffin to find the tax commission violated the open meeting law; to invalidate the $40 million refund and to issue an injunction to prevent the commission from holding future closed-door sessions.
Rombardo also filed a second lawsuit against the tax commission saying it violated the open meeting law in April in the case of Leisure Homes Corp. of Washoe County in which deliberations and the decision took place behind closed doors.
There were no criminal penalties sought.
During its a three-hour meeting Thursday, the commission considered retracting its vote on Southern California Edison's rebate, but then decided to let it stand while it attempts to file its own suit seeking a declaratory judgment on two state laws that seem to be in conflict.
Commissioners said there is a law that allows the commission to hold closed-door meetings to hear appeals from taxpayers who want to keep their financial information secret. That conflicts with with Nevada's open meeting law, however, they complained.
Commissioners said they have been permitted to hold closed meetings, with the concurrence of the attorney general's office for at least 10 years.
But Rombardo said a 1979 legal opinion from the attorney general's office told the commission to hold its meetings in public. He said there has been no change since then. He said he has conducted research and never found a later opinion from the attorney general's office that changed the mandatory open meeting requirement.
Commissioner Thomas Sheets of Las Vegas said Thursday he and his fellow commissioners are frustrated that they have been following the advice of the attorney general's office and now are being sued by the same office.
"It calls into question all the advice we have been getting in the past couple of years," Sheets said.
Commissioner George Telesis, also of Las Vegas, said the attorney general's office "clearly has a conflict of interest. You can't peddle it any other way.
"The same person who is suing me is defending me," he said. "It makes no sense."
The commission voted to ask state Attorney General Brian Sandoval for permission, with state money, to hire its independent counsel to file its own lawsuit to get a court interpretation of the open meeting law and the other law that they say permits the tax commission to hold closed-door sessions in taxpayer cases.
The commission was also critical of Rombardo for not showing up at the more than three-hour meeting Thursday to discuss how the issue might be resolved.
Rombardo said the attorney general's office had previously extended the " straightforward offer" that would have allowed the commission to avoid the suit, and he had informed the tax commission he would not be present.
During its meeting, the commission did decide not to hold any more closed door sessions until it gets a ruling from the court. It selected Reno lawyer Thomas "Spike" Wilson, a former state senator, to represent the commission if the attorney general's office agrees to foot the bill.
Kelesis said Wilson understands the problem the commission is facing.
Commission Chairwoman Barbara Smith Campbell of Reno urged that the issue be resolved without getting into a bitter fight with the attorney general's office. She said she believed the commission has been following the correct law that enabled it to close meetings to keep confidential the information of the taxpayers.
She said a final written decision has not been made on the Southern California Edison case. It made its initial decision in May at a closed-door session that Southern California Edison Co., was entitled to a refund of more than $40 million it paid on sales and use tax between 2001 and 2003.
The tax had been imposed on coal that was mined in Arizona and shipped to Nevada where Southern California Edison operates the Mojave Generation Plant near Laughlin.
There is an apparent conflict between the net proceeds of mines tax in the Nevada Constitution and the state's sales and use tax. The case has been before the commission for two years and numerous hearings have been held.
Norman Azevedo, attorney for Southern California Edison, urged the commission not to vacate its refund decision. Azevedo, a former senior deputy attorney general for Nevada who advised the tax commission when he worked for the state, said the commission followed the proper procedures in arriving at its decision.
Azevedo asked the commission to go into closed session Thursday so he could present more information. But the commission refused. Commissioners said that Azevedo had written a proposed decision for the commission and there would not be any more testimony or evidence taken in the case.
He complained there have already been breaches of confidentiality in this case and he complained the company was "caught in the middle" of a dispute between the attorney general's office and the tax commission.
Azevedo also said the attorney general's office has taken the position in a case in the Nevada Supreme Court that the information of the taxpayer is confidential. He referred to a case in which International Game Technology is being sued by an employee who claims the company underpaid its taxes by $30 million to $40 million.
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