LOOKING IN ON: CARSON CITY

Tuesday, Dec. 12, 2006 | 7:12 a.m.

CARSON CITY - A $40 million annual tax refund to Southern California Edison has been drawing 6 percent annual interest while a legal fight between the attorney general's office and the Tax Commission plays out.

In May 2005 the Nevada Tax Commission decided in a closed meeting to refund the sales and use tax to the company.

But the refund has been put on hold pending a decision by the Nevada Supreme Court on a suit filed by the state attorney general's office seeking to invalidate the closed-door meeting.

Dino DiCianno, director of the Nevada Tax Department, said the annual interest due on the refund began accruing three years ago when Southern California Edison paid the tax and sought a refund. With the 6 percent interest equaling $2.4 million a year, the state would owe the company more than $7 million - to date - if the court validates the tax panel meeting where the decision was made.

The suit is intended to clarify whether the tax commission may conduct meetings and make decisions in private.

The attorney general's suit argues that while confidential tax information may be reviewed in private, a 1983 law requires decisions by the Tax Commission to be made in public. It asks the court to overturn the decision of District Judge Mike Griffin of Carson City .

The dispute arose from Southern California Edison's contention that it did not have to pay sales and use tax on coal mined in Arizona and shipped to Nevada to operate the Mohave Generating Station from 2001 to 2003.

Employers Insurance Co., the largest firm in Nevada to write workers' compensation policies, has been given the green light to convert to a publicly traded company - a shift that will mean a big windfall for its policyholders.

In a 50-page written order, State Insurance Commissioner Alice Molasky-Arman said the conversion from a private mutual insurance company is fair to the estimated 6,600 employers and local governments that buy policies.

She ordered an election within 45 days to gain approval from policyholders.

Ann Nelson, vice president of corporate and public affairs for Employers Insurance, said the change will result in $626 million being returned to small businesses in Nevada.

The plan calls for 20 percent of the surplus to be divided equally among policyholders. Forty-five percent would be distributed to policyholders based on tenure and the remaining 35 percent would be the companies' premiums from 2001 until this year.

For 86 years workers' compensation insurance policies were written by the state-operated Nevada Industrial Commission and its successor, the State Industrial Insurance System.

But after an audit showed the system faced $2.2 billion in potential liabilities, it was converted to a private company in 2000. When the system was operated by the government, its premiums were the fifth highest in the nation, Nelson said. Nevada's premiums now rank 30th , she added.