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Steve Marcus / FILE
A cable shovel dumps gold ore into a truck in Crescent Valley in September 2001. In Nevada, mining companies get a slew of tax deductions, including for equipment depreciation.
Sunday, Oct. 21, 2012 | 2 a.m.
Sun coverage
Mining came out of the Legislature in 2011 on the ropes. Led by Senate Democrats, the Legislature limited mines’ tax deductions, instituted a new mining oversight committee and took the first step to rip the industry’s tax rate out of the state’s constitution by passing Senate Joint Resolution 15.
But now, elected Democrats and candidates are taking a softer approach to one of the state’s major industries, which also contributes heavily to both Democratic and Republican campaigns.
Sen. Mo Denis asks a question during a meeting of the Senate Finance Committee on the second day of the 2011 legislative session Tuesday, Feb. 8, 2011, in Carson City.
Take, for example, Sen. Mo Denis, who’s in line to be the leader of the caucus next year: “We understand they play an important role in the economy here in Nevada.”
He said the joint resolution, which passed in 2011 and has to pass again in 2013 before going to voters, is not on his radar screen.
“I don’t know where I’m at with that,” said Denis, who voted with all other Democrats and a handful of Republicans to pass the resolution in 2011. “Other issues are more pressing than that type of issue. When it comes to education, the economy, jobs — those will be more of a priority than that.”
Justin Jones, the Democrat running for a contested senate seat in Southwestern Las Vegas, said he has talked to both sides on the issue.
“My visceral reaction is, ‘Why is mining deserving protection in the constitution?’ But if we simply took the provision out of the constitution, mining companies would pay less in taxes,” he said in an interview last month. “That’s not the result that we’re looking for.”
That assertion — that SJR15 would result in them paying less taxes, without an alternative — also is one of the key talking points of the mining industry. (Advocates for the bill call it a catch-22: They can’t pass a different, higher tax on minerals because of the constitution but can’t change the constitution because there’s no alternative in place.)
The legislation on mining had been one of the few bright spots for liberals in 2011. It was a salve on an otherwise frustrating session for the left, which saw the 120 days largely dictated by Republican Gov. Brian Sandoval, despite Democrats controlling both the Assembly and Senate.
The prospect for tax increases once again is dim for the 2013 Legislative session, and it’s not clear what Democrats will have to offer to their base of supporters.
In many respects, the mining issue became front and center because of Senate Majority Leader Steven Horsford, D-North Las Vegas. He has left to seek a seat in Congress, so it’s natural that there would be less enthusiasm for the issue.
But some see the influence of campaign money also playing a role.
Nevada Sen. Sheila Leslie, D-Reno, and retired Nevada state archivist Guy Rocha listen to testimony on Leslie's proposal to strip the mining industry of eminent domain powers Monday, Feb. 14, 2011 at the Legislature in Carson City.
Former Sen. Sheila Leslie, who resigned her Reno seat to challenge Sen. Greg Brower, R-Reno, has been another vocal critic against mining, arguing the industry doesn’t pay its fair share. She, too, has shifted her focus away from singling out mining to a broader criticism that corporations in general don’t pay enough.
“Large campaign contributions often have the effect of creating amnesia on mining,” she said. “It’s not surprising at all to me that during campaign season, no one wants to address the core issues around mining.”
Leslie added it would once again be a tough battle in 2013.
“I’m not optimistic about winning,” she said, adding that she would bring it up again.
As it has in past years, mining has been generous in spreading around campaign money to both Democratic and Republican candidates.
While the companies have given to Brower and not to Leslie, they haven’t given the jaw-dropping sums to political action committees working to swing the Senate Republican like other companies have.
Newmont and Barrick gave a combined $50,000 to Gov. Brian Sandoval’s political action committee, the New Nevada PAC, which is spending money in the state senate races. But that figure was dwarfed by $100,000 contributions to the PAC from MGM Resorts International, Las Vegas Sands and Station Casinos.
Wynn Resorts also gave $475,000 to a national Republican group that is playing in the five competitive seats.
Barrick also gave $75,000 to the Nevada Democratic Party.
“Our campaign contributions have been modest,” said Tim Crowley, president of the Nevada Mining Association. “They have been consistent year over year. It’s a recognition legislators have expenses, they need to communicate with constituents.”
He said the industry has been and remains neutral on the resolution that could lead to the net proceeds on minerals tax rate being removed from the constitution.
The industry has been waging a public relations campaign and speaking to groups about mining. Crowley said his industry is focused on improving the workforce and changing the perception of the industry.
Crowley said the message aimed at lawmakers hasn’t really changed. But while they may have failed to get it across in the final frenzied days of the legislative session, they’ve been able to use the interim to ensure it’s been heard.
“It’s just time,” he said of getting the industry’s message across. “I think that in the last days of the session, it didn’t resonate.”
Pussys.
So, Mo, says:
"Other issues are more pressing than that type of issue. When it comes to education, the economy, jobs -- those will be more of a priority than that."
Perhaps if we brought the mining companies into the twenty-first century w/ a reasonable level of taxes on one of Nevada's main industries it would help with that.
A few facts from lasvegasgleaner.com (link follows):
Nevada Mining Tax Deduction Facts
From 2000 through 2007, the mining industry in Nevada extracted and sold gold worth $25.5 billion, and paid taxes to the state general fund totaling $125.3 million, an effective gross state tax rate of one-half of one percent.
Mine owners are allowed to write off expenses as deductions. Over the last eight years, the Nevada mining industry has deducted 79 percent of the value of gold production, and paid taxes only on the value of the remaining 21 percent.
In any given year from 2000 through 2007, one-third to one-half of all the mines operating in the state produced gold worth hundreds of millions of dollars but reported zero taxable proceeds.
Nevada's two largest gold mines, the Barrick Goldstrike mine and Newmont's Carlin Trend project, have reported zero taxable values during years when the mines have produced gold worth a half billion dollars or more.
While the 5 percent Net Proceeds of Minerals (NPOM) tax rate is written in the Nevada Constitution and would take years to change, the deductions by which the mining industry avoids so much taxation are written in state statutes (NRS 362.120) and can be eliminated through legislation, raising tens and possibly
hundreds of millions of dollars for the state budget as early as the next biennium.
The lasvegasgleaner.com site has some pretty pictures for those who have a hard time with numbers.
http://www.lasvegasgleaner.com/mining.ta...
It doesn't matter if there is an R or a D after someone's name when it comes to selling out to mining in this state. They can all be bought.
Fire all the Bumb in office today, they are not doing what they should to support the needs of the people.
There is too much lost revenue for the future of Navads young, they need the support and so do the elderly in the state.
"From 2000 through 2007, the mining industry in Nevada extracted and sold gold worth $25.5 billion, and paid taxes to the state general fund totaling $125.3 million, an effective gross state tax rate of one-half of one percent."
"It doesn't matter if there is an R or a D after someone's name when it comes to selling out to Mining in this state. They can all be bought."
There it is..
The 2011 Barrick Mining annual report is out. This is a link to the Barrick Annual Report for 2011.
http://www.barrick.com/theme/barrick/fil......
Barrick Mining either owns outright, or is a partner in a joint venture in 7 gold mines in Nevada. To determine my estimate a profits for 2011, I assumed the price of gold at $1500 per ounce, or less. The current price for gold is in excess of $1750 per ounce. The first four mines listed are totally owned by Barrick Mining. In 2011, according to their own figures, Barrick Mining produced almost 97 TONS of gold from their Nevada Mines. That is same weight as 16 full size, original HUMMERS. Barrick Mining has reported record profits and dividends in both 2010 and 2011. Barrick paid a total of $47,300,000 in local and state taxes last year.
The Cortez Hills Mine produced 1.42 Million (44.375 tons) ounces of Gold at a cost of $245 per ounce. If you assume a conservative profit of $1000 per ounce, you get a profit for the Cortez Hill mine of $1,420,000,000.
Bald Mountain Mine produced 93,000 ounces (2.9 tons) at a cost of $558 per ounce. Assuming a profit of $900 per ounce for the Bald Mountain Mine, you get a profit of $83,700,000.
The Gold Strike mine produced 1.09 MILLION ounces (34.0625 Tons) at a cost of $511 per ounce. Again assuming a profit of $900 per ounce for the Gold Strike mine, you get a profit of $981,000,000.
Ruby Hill mine produced 127,000 ounces (3.96875 tons) at a cost of $334 per ounce. Assuming a profit of $1000 per ounce for Ruby Hill, you get a profit of $127,000,000.
Barrick Mining is involved in three joint ventures in Nevada.
Barrick owns 33% of the Marigold mine. Barrick's share of production was 51,000 ounces (1.59675 Tons) at a cost of $761 per ounce. For the Marigold mine, assume a profit of $700 per ounce. The total profit would be $35,700,000.
Barrick owns 50% of the Round Mountain mine. Barrick's share was 178,000 ounces (5.5625 Tons) at a cost of $612 per ounce. Assuming a profit of $800 per ounce for the Round Mountain mine, we get a total profit of $142,400,000.
Barrick owns 75% of the Turquoise Ridge mine which produced 135,000 ounces (4.21875 Tons) at a cost of $569 per ounce. Finally for the Turquoise Ridge mine, assume a profit of $700 per ounce. This would give a profit of $ 94,500,000.
Barrick is actively exploring in the Carlin Trace in Nevada. The Carlin Trace is one of the richest gold deposts in the world. Barrick's annual report shows that 44% of the companies income comes from North America. Don't forget that Barrick is also mining silver along with the gold in Nevada. If you add all of the projected and conservative profits, the total is $2,884,300,000.
According to sources, the Entire mining industry paid approximately $253,300,000 in state taxes on all minerals mined in Nevada. Compare this to the 425 MILLION paid in state taxes by the gaming industry.
Comment removed by moderator. Off Topic
Nevada's Mining Industry enjoys far too many privileges. Best illustrated by continuing major oversight failures by NV State officials. Remember NV state tax commission director Dino DiCianno retired abruptly after announcing his dept. did not audit NV Mining Industry as required. See> http://nevadastatepersonnelwatch.wordpre...
Other failures in Nevada Mining oversight continue with MSHA and NV Mine Safety and Training Section to investigate timely filed formal complaint/violations of Safety, Health, harassment, racial discrimination and manufacturing false records. Who do NV safety oversight regulators protect, not the working shift miner who never has formal complaints investigated?
Water Pollution Control Permits issued to NV mining operation/operators by NV Division of Environmental Protection also is a flawed in favor of polluters/taxes. After a NOTICE OF DECISION -- Bureau of Mining Regulation and Reclamation an appeal must be filed within 10 days. When appeal is timely filed with evidence provided, the Nevada Mining Protectionist games begin. Another form 3 is sent to be filled out even after NV DEP/SEC state in meeting minute's new form 3 is not perfected and still being worked on? Rather than set a date for appeal hearing NV DEP/SEC run to NV Attorney General for an opinion to deny a hearing contrary to Public safety , MSHA , NV MSATS, NVDEP stated goal of protecting the public?
There continues major efforts by MSHA, NV MSATS, NVDEP, backed by present and past NV governors' current NV Attorney General to block all efforts to right the wrongs in Nevada's mining industry"
NDEP/SEC (STATE ENVIROMENTAL COMMISSION) as well as NV Attorney General is NOW on record as protecting major Mining Corp. over health and safety issues, i.e., chemical spills and production errors flowing into a children's playground (Water Pollution Control Permit NEV0070005). This is how blatant and broken Nevada Mining oversight really is/continues. Apparently the safety of Mining Corporations bottom line and taxes paid to the state of Nevada take priority over the health and safety of Nevada's miners and innocent young children playing in a toxic polluted playground". PRupp B125 SP NV 89047
Having personally experienced a NV State Board of Equalization member of the mining community hear and rule against my property tax appeals ... talk about hypocrisy
Public lands and the minerals in them belong to the people. The people allow themselves to be ripped off.
Wonder how the people would feel and react if a mining executive, a bureaucrat, and a state congressman walked into their house and "mined" their electronics and other high-value items. Given their previous apathetic behavior, how unreasonable would it be to expect them to just sit by on the couch and watch until the "visitors", looking out for their interests, came in to take the couch. Most certainly by then, the people would rise up... to help them carry it out.
They give to BOTH lmao. Ok enough show for the sheep for now. Lets get that foreign mining owned hush money to keep up with the other party. Throw them all in one of those hellish Nevada prisons for being so dirty and underhanded and kick out the drug users that are there so they can go home. Don't need to pay $$$ to incarcerate a harmless drug offender when the real damage being done is by the ones in the above story..
Gold and Silver and other mineral rushes have kept our country booming since day one. Our riches have always come from the land as Mother Nature intended. It does not come easy, but it is still there to be had to the benefit of all.
well, I guess now mining will just openly rape the state and not contribute their fair share. At least before the Dems pretended to fight back.
"well, I guess now mining will just openly rape the state and not contribute their fair share"
Mining businesses pay the same taxes that all the other businesses pay in the state plus they pay a special mining tax on top of that.
They are paying more than their fair share.
@sgt Rock. See my post above on the Barrick Annual Report. Then tell me again that mining pays their fair share. The only taxes that other businesses pay is a 1.66% pay roll tax and unemployment insurance. NO BUSINESS IN NEVADA PAYS A TAX ON PROFITS EARNED IN NEVADA!!!!
The argument that "..SJR15 would result in them paying less taxes, without an alternative is completely absurd! This argument was destroyed by Senator Horsford, and a record of it exists in the Minutes when SRJ 15 was given a "Do Pass" recommendation.
"I need to respond to one argument I am hearing that I feel is not at all valid. To suggest somehow that putting S.J.R. 15 to a vote of the public in five years can somehow be a tax decrease on the mining industry is false. It is false. It is spin. It is misrepresentation of the facts.
They want to come here and tell us do not pass S.J.R. 15 because it may result, in five years, in a tax decrease on us. Is that the message? That is what I heard, and I had to come back and refute it. This bill empowers the Legislature and the Governor, if it is approved again in 2013 and approved by the voters thereafter, to set the rate. It allows us to determine what the split is between county and state and it allows us to determine whether we would impose an additional tax other than the net proceeds. Those are three things we have no control over because of a special provision in the Constitution that they lobbied for and imposed in the Constitution dating back to 1987. To now come here and suggest that somehow, if we change that, they will get a tax decrease--I do not buy it, and neither should this Committee, or the people of the State of Nevada."
http://www.leg.state.nv.us/Session/76th2...
As a resident living in the mining community of Elko, I find it appalling that our elected officials, and yours, have completely forgotten the issues, and moreover the detrimental effect this 1987 amendment caping the taxes to 5% net proceeds has had on the State. It raises some concerns especially after this stance has been taken shortly after the latest "Lake Tahoe wine and dine with the Nevada Mining Association!"
Recently, Newmont initiated their FIRST WAVE of layoffs! http://www.mynews4.com/news/local/story/...
For 2010, mining companies only paid $71.7 million through the Net Proceeds of Minerals Tax to the state's General Fund, despite having gross production value of $6.6 billion--an effective tax rate of 1%. A total of six mines, or one-quarter of the 24 mines in the state reported NO - absolutely ZERO - taxable value despite reporting $88.6 million in gross production value. Thus, it could be said that Nevada's mining tax regime is more "deduction" than tax--fool's gold."
http://www2.8newsnow.com/docs/mining_tax...
Here is more support why our representatives should not back off passing SJR 15:
http://www.lasvegasgleaner.com/las_vegas...