Nevada Assemblywoman Peggy Pierce’s bill (A.B. 428) was heard before the Assembly Taxation Committee yesterday morning, in hopes that at least a portion of Nevada’s budget shortfall might be filled by new revenues created in the provisions of this bill. The bill is designed to reduce tax deductions that mining has enjoyed for decades.
The Nevada Constitution is said to have been written by the mining industry, with major protections for themselves included. Essentially, the mining industry is only taxed on their net proceeds in an amount no greater than 5%. While there is currently a proposal before the legislature to amend the Nevada Constitution to remove the cap, such a provision, if passed, would have to be revisited by the legislature in two years, and passed by voters on the ballot, yielding results no sooner than 2014.
Some Assembly Democrats are hoping that AB 428 might be a more immediate fix for the budget problems. Proponents testified on behalf of the bill before the committee this morning.
Hugh Jackson, of Las Vegas Gleaner fame, outlined the enormous record profits being made by the mining industry, thanks in large part to gold. He points out that the net income of mining is greater than Nevada’s entire state budget. They distributed $1.1 billion in dividends last year, and are sitting on $8 billion in cash.
He explained that Barrick and Newmont (NV's 2 largest mining companies) aren’t likely to leave Nevada because their dividends of $1.1 billion are reduced to $1 billion (a difference reflected by the impact of this bill)
“Market Forces drive where mining operates, when it expands, and how many people it employs. Nevada is probably the most important region in the world for mining. This bill, if passed, will still leave Nevada’s mining taxes lower than nearly anywhere else in the world. It is hard to imagine this having any effect on the industry.”