Carson City’s own green monster

If truth is the first casualty of war, then logic is the first victim of state government.

How else can a law that expired at the end of 2005 still be in effect in such a way that legislators must repeal the dead thing and the governor must veto the repeal?

Dr. Frankenstein would be smitten with the beast of Assembly Bill 385 from two years ago. After numerous hearings, amendments and a reincarnation as Assembly Bill 3, it still survived its Dec. 31, 2005, sunset date to cost the state hundreds of millions of dollars in revenue.

It's very much alive indeed.

Back in the days before "An Inconvenient Truth," lawmakers believed they had to make public buildings green -- more energy efficient and reliant on renewable energy sources -- to help spark the construction industry to provide similar features in private buildings.

"We really didn't know if anybody would take advantage of it," said bill sponsor Chris Giunchigliani, who is now a Clark County commissioner. "We were really trying to get people to think differently."

And with just a three-month window to apply for a tax credit, Giunchigliani assumed the two state public works projects that were targeted to meet green standards would be the standard bearers to show the private sector how it's done.

There were fiscal notes suggesting the measure would cost the state $20 million for the green construction. The university system suggested a $4.7 million cost related to construction and Leadership in Energy and Environmental Design certification -- the national standard in environment-friendly construction.

In testimony on the bill, lobbyists and lawmakers worried about whether any projects in the state could meet the "silver" standard under LEED. The bill was amended to encourage meeting the "base" standard under LEED.

Yet, out of the blue, it appears companies went for the gold. Not only were credits awarded more than a year after the law expired, the credits were applied to an entire project, not just the portion that met the green standard.

Now MGM Mirage alone has $80 million in credits and applications in the pipeline could cost the state $900 million in sales and property tax revenue over the long term.

A forensic study of how we got here would require all the talents of "CSI" -- the well-funded television show, not the cash-strapped Las Vegas police team.

But an examination of minutes from the discussion of the original bill in Carson City shows nobody foresaw any impact. Giunchigliani estimated the incentives might cost up to $250,000.

Local governments and school districts were silent. When the bill got to the Senate Commerce and Labor Committee on May 31, 2005, Chairman Randolph Townsend, R-Reno, assured "I am informed by the chair of the Senate Committee on Finance that this bill does not need to be referred to them."

In other words, Majority Leader Bill Raggio, R-Reno, was clearing the bill for passage. It would only have to come back to his committee if it created a financial liability for the state.

Ironically, Raggio abstained from the final vote on AB3 in the 2005 special session. Was he prescient or conflicted? He voted for AB385 at the end of the regular session before time ran out to resolve differences between the Senate and Assembly versions.

The real problem arose post-session when then-Tax Commission Director Chuck Chinook sent a letter to those interested in the green tax break. It said as long as you had sent a letter of intent by the deadline, a project yet to break ground could still qualify.

Then it appears the commission had another change of heart. Last July, a full seven months after the law's expiration, the commission apparently decided to honor any project on the drawing board.

Carole Vilardo of the Nevada Taxpayers Association said she still isn't completely sure what the commission did. The new director, Dino DiCianno, didn't respond to calls.

"It's amazing you have this vetted by an unelected, unaccountable commission," Giunchigliani jabbed. "The Tax Commission doesn't even meet in public half the time."

Townsend may not have understood the potential financial liability, but in a June 1, 2005, committee hearing, he cautioned about some of the policy left unwritten.

"The administration has to understand that the Office of Energy is entrusted with drafting some significant regulations," he said.

One of those regulations came this year as Hatice Gecol, Gov. Jim Gibbons' energy adviser, authorized casinos that permitted smoking to qualify as green buildings.

Talk about environment-friendly. Makes you wonder if The Venetian qualifies just because its canal is cleaner than the real McCoy.

The only thing more insane than a Tax Commission writing its own policy and an energy adviser belittling the actual intended policy is what could happen next.

The Legislature tripped over itself to repeal the 2005 law even though it was already expired. Then the governor vetoed the repeal and issued a questionable executive order urging a better solution by June 4.

How will they stab the beast the third time? A wooden stake, perhaps?

Erin Neff's column runs Sunday, Tuesday and Thursday. She can be reached at (702) 387-2906, or by e-mail at eneff@reviewjournal.com.