Sandoval signs law reducing mining industry tax breaks

By Cy Ryan

Thursday, June 16, 2011 | 2:42 p.m.

CARSON CITY – A bill to wipe out some of the tax deductions enjoyed by mining companies and to create a commission to oversee the industry has been signed into law by Gov. Brian Sandoval.

The bill requires the state Taxation Department to report annually to the new commission on the expenses and deductions of each mining firm.

There was criticism during the Legislature by some lawmakers that the industry, enjoying big profits from gold production, wasn't paying its fair share to state government.

It was revealed this past legislative session that the Taxation Department had failed to conduct audits, leading to the departure of department executive director Dino Dicianno.

The companies pay a Nevada proceeds of mine tax. In the future, they won’t be able to claim deductions such as the cost of employee housing, payments to lobbyists, dues to a trade association to promote or advertise, and the cost of mineral exploration.

Travel costs will be allowed only if the expenses were incurred in Nevada.

The bill establishes the seven-member Mining Oversight and Accountability Commission, funded by an appropriation of $17,050 in each of the next two fiscal years.

The governor will make two appointments to the commission. The Assembly speaker and the Senate majority leader each will nominate two commission members. The seventh member will be chosen by the Senate minority leader for a two-year term, then the Assembly minority leader will choose after the term expires.

The commission will check on state agencies responsible for taxing, safety, operation and environmental regulations of mines.

The governor also signed Senate Bill 486, continuing a $10 million appropriation to the Millennium Scholarship program to help university and college students.