Green tax program expansion rejected

Nevada lawmakers focused on "green" building tax incentives Monday, rejecting new rules sought by the state Commission on Economic Development to expand the incentives and getting a new bill that would shrink tax revenue losses caused by the program.

Also, legislators disclosed a letter from the state Taxation Department to the governor's legal advisers that shows the agency acted to finalize several applications for the tax breaks in April, after lawmakers already were questioning them.

The letter shows the agency moved to finalize applications for sales tax breaks by MGM Mirage and Fontainebleau on April 16, and by the Las Vegas Sands Resort on April 23. Assemblywoman Debbie Smith, D-Sparks, said lawmakers started inquiring about the tax breaks in late February and early March.

The letter shows what critics describe as disarray involving the tax breaks. Some companies got tax deferral certificates while others got "opinion letters" stating they're eligible. Only two, MGM Mirage and the Molasky Corporate Center, applied for the tax break during the window allowed by a 2005 law, October through December 2005.

One company asked for an opinion as late as May 2, the day the Senate passed a bill to suspend the tax breaks. Others never applied, but were referred to the department by the state Energy Office.

AB621, a new bill that gets rid of the sales tax exemptions and reduces property tax breaks, was introduced in the Assembly on Monday. It is still unclear what approvals companies need to be considered eligible for the previous tax breaks and lawmakers are not sure whether the new bill will be retroactive.

Lawmakers started looking into the financial effects of the old law after being told by state Budget Director Andrew Clinger that the incentives could cause a big budget revenue hole.

Clinger's boss, Gov. Jim Gibbons, then vetoed a bill to suspend the tax breaks, upsetting legislators who said the initial concern about the incentives came from the Gibbons administration, Assemblywoman Marilyn Kirkpatrick, D-Las Vegas, said.

At a Legislative Commission meeting on Monday, Assembly Speaker Barbara Buckley, D-Las Vegas, asked the Economic Development Commission's executive director, Tim Rubald, why he was presenting the new regulations to expand the incentives.

"Why would you move to expand abatements when you know that this Legislature is concerned about that and considering corrective action with regard to the program? In short, what on earth were you thinking?"

Rubald said a legislator, who he didn't identify, asked him to move on the regulations.

"I was not going to do this at all. I was requested by a legislator and strongly urged to move on these quickly and therefore I responded to that request," Rubald said.

The regulations would have expanded the tax breaks to include "core and shell" construction, where a developer would get tax breaks for the building, but those who rent it are not required to follow the green building standards, such as prohibitions against indoor smoking.

Asked whether he got Rubald to develop the regulations, Sen. Randolph Townsend, R-Reno, said he didn't remember.

Towsend said he attended most of the meetings that dealt with regulations on the tax breaks and said if the state had been in different economic circumstances, he would have moved to pass the rules on core and shell construction.

"I remember talking to him about all the regulations. I remember talking to him about core and shell at some point. Do I remember when or do I know if anybody else told him? I don't have a clue," Townsend said.

"I have never put pressure on any regulator or any state agency since I've been here," Townsend said.