Tuesday, July 12, 2005 | 10:49 a.m.
CARSON CITY -- Taxpayers will pay a private practice lawyer to defend the Nevada Tax Commission against a Nevada attorney general's office lawsuit alleging the commission violated the open meeting law, Attorney General Brian Sandoval said this morning.
Normally the commission is represented by the attorney general's office, but in this case the office has a conflict of interest, Commission Chairwoman Barbara Smith Campbell said Monday.
At issue is the commission's practice of deliberating and voting behind closed doors on tax rebates that can run in the tens of millions of dollars, as was the case with a more than $40 million refund the commission granted to Southern California Edison in May. Sandoval said this morning that he had given approval for the tax commission to hire former state Sen. Thomas "Spike" Wilson, a Reno attorney, to defend the Tax Commission. Sandoval said he met with Wilson and Wilson's law partner, Jim Guidici, Monday. The attorney general said the pay is still to be worked out.
Sandoval said Wilson said he would charge a "reasonable rate" but the exact fee has not been decided.
Sandoval said the fees the state pays to private practice lawyers depends on their expertise and the complexities of the cases they are hired to handle. For instance, he said, lawyers handling the Yucca Mountain case are paid $600 an hour, but those doing criminal defense work get $200 an hour and the state pays $190 hour to lawyers who work on construction defect cases.
Campbell said she was pleased the two sides were able to discuss the lawsuit.
"We're trying not to be adversarial," she said. The commission has always followed the advice of the attorney general's office in these matters.
Sandoval said the law allows the commission to meet in private to take testimony from taxpayers to keep certain things confidential. But he said the commissioners must meet in public to "deliberate and vote."
He noted this case and another involving Leisure Homes of Reno involve "tens of millions of dollars." He said the public is entitled to see the commission deliberate and vote.
Sandoval said if the position of the taxpayer is meritorious, "then that is fine. He added, "But the public should have the ability to see them deliberate and who votes for what."
There have been reports that deputy attorneys general in the past may have advised the commission it could vote in closed session. Sandoval said he has looked into this and could not find any case where a deputy counseled the commission it could vote in private.
"We never said they can't have closed meetings. We said they can't deliberate and vote" in private.
Campbell and other commissioners at the meeting last week to discuss the issue wondered how they could take testimony in private and then come out in public and discuss the issue without divulging details. And commissioners said it would be a crime if they revealed the confidential information given in closed session.
Campbell expected the case would be handled expeditiously to resolve what she feels is a conflict in the law.
The commission last week voted to seek a declaratory judgment from the district court on the interpretation of the laws. It said it would not hold a closed meeting in the meantime. And it agreed it wanted Wilson to pursue the civil suit.
But the attorney general's office filed suit in district court in Carson City, saying it gave the tax commission a chance to retract its previous closed-door vote and then deliberate and vote in public. The commission refused.
The commission 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 taxes were imposed on the coal 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.
The suit by the attorney general's office seeks to invalidate the $40 million refund and have the court declare the commission in violation of the law. There are no criminal penalties sought.
The attorney general also filed suit against the commission for holding a closed-door meeting involving Leisure Homes of Reno in its dispute with the Reno-Sparks Visitors and Convention Authority. Sandoval said the tax commission held that the authority should not be trying to collect room tax on timeshare units in Washoe County.
In this case, the statute of limitations has run out so the tax ruling cannot be reversed. Both suits seek to stop the commission from meeting in private in the future when deliberating and voting.
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