Political Eye: Less than expected mining claim fees blamed on collection

The 76th session of the Nevada Legislature starts in 28 days, but many are still trying to unravel a legislative mess from the special session that ended 10 months ago.

A fee legislators slapped on mining claims was supposed to raise more than $25 million to help close a budget gap in the 2009-11 budget. But the projection has been ratcheted down to about $18 million, and there is no clear way to tell if the estimate is even close.

When the Legislature approved the fee, it also created a confusing system of collection that, so far, makes tracking the money nearly impossible.

"This law was not very well thought out and didn't have any input from anybody," said Alan Coyner, administrator of the Division of Minerals.

Not only did the Legislature make it difficult to track the money coming in, it may have driven business out of Nevada, if a 10 percent drop in new claims since the fee started despite record-high prices for gold is any indication.

"When you have a significant fee in landholding costs, people are going to trim back their claim blocks," Coyner said.

The fee was applied to claim holdings on a sliding scale, with no fee on a claimant's first 10 claims, a $70 fee on claims 11 to 199, $85 on claims 200 to 1,299 and $195 on claims 1,300 and up.

County recorders were charged with receiving affidavits by Nov. 1 from claim holders who were expected to truthfully report the number of claims they hold.

But it wasn't made clear if claim holders were supposed to report in counties where they live or where they hold claims or, on leased claims, whether the holder or the person leasing was responsible.

Also, recorders aren't empowered or directed to compile the affidavits or compel payment. And it appears from some of the completed affidavits that many claim holders didn't properly complete the forms.

Making it more confusing, while claim holders were supposed to report holdings by Nov. 1, they had options to pay the entire fee upfront, pay half upfront and the rest by June 1, or pay the entire bill by June 1.

There is no coordinated system to track which option people chose. Recorders are simply passing along money they receive to the state. So far, less than $3 million has been collected, according to Coyner.

"We don't even know if they gave us the right amount of claims. We don't even track that. We just record what they want us to," said Lyon County Recorder Mary Milligan. "I don't know how the state is going to audit this."

As a result of the confusion, it is unclear if the state will ever unwind the mess and collect the expected revenue.

And there is evidence to suggest the fee drove business out of Nevada by discouraging exploration, an important step in the process of new mine development.

The number of claims in Nevada fell from about 200,000 to 180,000, Coyner said.

Less exploration means less spending on everything from restaurants and hotels to tools, trucks and gasoline, particularly in rural communities.

"It is not cheap to go looking for gold or whatever your mineral happens to be," said Mark Reece, past president of the Nevada Landmen's Association.

Nevada also fell from third to 10th on an annual list by the Fraser Institute of the best places in the world to engage in mining, called "the biggest fall in the developed world," by the authors.

Tim Crowley of the Nevada Mining Association said mining businesses were willing to chip in to help the state during the special session. But he is opposed to extending the claims fee beyond a one-time charge.

"I think there were a lot of ramifications of that bill that were not anticipated," Crowley said. "If that were to live on in perpetuity, you would see a drop off in mine claims. It would have an impact on exploration."

'SHOE TREE' LAMENTED

Vandals who chopped down the renowned "shoe tree" along U.S. Highway 50 near Middlegate probably didn't know at the time they were desecrating a favorite roadside stop for Gov. Brian Sandoval and his family.

"I was devastated, just devastated, that some vandals would cut down the shoe tree," Sandoval said Thursday when asked about the incident. "There are several Sandoval shoes in that tree. We were just there three weeks ago. Shame on them."

In an interview published in the January/February edition of Nevada Magazine, Sandoval said the old Cottonwood tree was a stop on the family's annual trip to Ione to get a Christmas tree.

The tree is a longtime roadside attraction where passers-by toss shoes onto the branches, presumably for good luck.

BULLYING IN SCHOOLS

Carson City District Attorney Neil Rombardo is working to develop language for a legislative bill that would strengthen and clarify current law related to bullying in schools.

Romardo wants to update legislation from the 2009 legislative session that defined cyberbullying, the practice of severe harassment of other people using text messages or the Internet, and increasing accountability for school officials and teachers who don't protect victims.

Another goal is to clarify the path for victims to seek civil judgments from school districts and schools that didn't take action to prevent bullying.

Rombardo is working with state Sen. Sheila Leslie, D-Reno, in developing the legislation.

He says current law defines bullying and calls for reporting by schools. But it needs updating with clear, escalating criminal penalties for bullies and meaningful accountability for adults who don't prevent it.

"We want teachers who are going to not only teach but make sure they are in a safe environment," Rombardo said.

NO MASTO-KROLICKI HANDSHAKE

It was a frigid day in Carson City during the inauguration of Gov. Brian Sandoval and swearing-in of constitutional officers, especially when it came time for handshakes.

After the swearing-in, Attorney General Catherine Cortez Masto was shaking hands with other officers and extended an arm toward Lt. Gov. Brian Krolicki, who ignored it.

There is bad blood between the two because Masto, a Democrat, led a failed attempt two years ago to prosecute Krolicki, a Republican, for alleged mismanagement of a college savings trust fund when he was treasurer.

The case was thrown out of court, but not before undermining any hopes Krolicki had of running for the U.S. Senate in 2010 and costing him tens of thousands of dollars in legal fees.

The icy exchange was visible on television, but through a spokeswoman Masto denied she was trying to shake hands with Krolicki. And Krolicki didn't comment on the issue.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.