Critics urge removal of Nevada mining protections

CARSON CITY, Nev. (AP) -- Valentine's Day in Nevada's capital provided a love-gone-wrong theme Thursday for demonstrators who urged lawmakers to "divorce" the mining industry by abolishing constitutional protections afforded since statehood.

"If we don't do it this time it will never happen," said Bob Fulkerson, executive director of Progressive Leadership Alliance of Nevada, organizer of Thursday's demonstration. "Their sweetheart tax deals will be enshrined forever."

About 50 people protested outside the Legislature Building to urge approval of SJR15. The proposed constitutional amendment would abolish the limits on net proceeds taxes paid on minerals and allow the Legislature to consider tax rate changes.

Organizers had goody bags with candy hearts that read "Support SJR15." They planned to meet individually with legislators during the day to solicit their backing.

Mines pay a net proceeds tax on minerals, an amount calculated after extraction and other business costs are deducted. Nevada is the largest gold producer in the U.S., and with gold prices around $1,600 per ounce, critics argue that the industry gets off tax cheap while reaping huge profits from Nevada's limited natural resources.

Mining representatives counter that the industry also pays other taxes that other businesses pay, and that the constitutional provision sets a higher tax rate for mining than other property taxes in a county.

First approved by the 2011 Legislature, the measure must be approved again to send it to voters in 2014.

"No other business has special protections," said Guy Rocha, a Nevada historian and retired state archivist. He said his principle argument in supporting SJR15 is to allow voters to decide whether to give legislators authority to debate the net proceeds tax every session, as might be dictated by the state of the economy.

Tim Crowley, president of the Nevada Mining Association, said the mining industry has had a "solid relationship" with the state since 1989, when voters increased the tax rate to 5 percent. In 2011, Crowley said the levy yielded $250 million.

The association notes that the 1989 amendment to the constitution exempted mines and mine claims from the Legislature's mandate to create a uniform and equal system of taxation, resulting in a higher level of taxation for the industry.

Passage of SJR15, the association said, "would restore the obligation to treat mining like all other business."