Tax panel meetings debated

CARSON CITY -- A bill that would clarify when the Tax Commission could go into closed session to hear an appeal by a taxpayer was supported by state officials and a press representative in a hearing before the Senate Taxation Committee on Thursday.

Senate Bill 448 does not yet include the provision, but speakers agreed that legislators need to put a process in the measure that would guide the Tax Commission in deciding whether a closed session is necessary to protect proprietary and confidential taxpayer information.

As the law stands, a taxpayer can request a closed session, and the Tax Commission must agree, regardless of what information is presented in private. Deliberations and votes also are conducted in private.

Reno attorney Thomas Wilson, representing the Tax Commission, said a new process to determine whether a case had information requiring a closed session would help ensure that meetings were not closed without good cause.

The idea of requiring such a review was endorsed by the Nevada Press Association and ACLU of Nevada officials and other speakers in a hearing before the committee.

Sen. Randolph Townsend, R-Reno, said the Tax Commission has to tread carefully.

If it closes a meeting without just cause, it could be found in violation of the state's open meeting law. But failing to protect proprietary taxpayer information is a criminal misdemeanor, he said.

The bill would provide clear direction in this area for taxpayers, the commission, the media and others, Townsend said.

Barry Smith, executive director of the Nevada Press Association, agreed that the Tax Commission must maintain a balancing act.

But the bill needs to be changed to give the Tax Commission a process of making a determination about whether to go into closed session, and "there needs to be some reason for that," he said.

A competing bill in the Assembly would require the Tax Commission to meet in closed session only to consider legitimately confidential information. Assembly Bill 433 would require that any deliberation and vote on such tax appeals to be conducted in public.

The bill was heard in March by the Assembly Taxation Committee, which took no immediate action on the measure. The Senate Taxation Committee did not immediately act on Senate Bill 448 either.

The question of whether the Tax Commission must follow the open meeting law is before the Nevada Supreme Court.

The state attorney general's office filed an action against the commission because of a private vote in May 2005 to grant a sales tax refund to Southern California Edison for the operation of its Mohave Generating Station near Laughlin.

The state share of the refund is estimated at $36 million, but the amount is growing because of interest.

Clark County would see a multimillion dollar loss of sales tax revenues if the refund is upheld. The county is trying to challenge the refund in Clark County District Court.

In the open meeting law dispute over the refund, a Carson City District Court judge last year ruled in favor of the Tax Commission, saying a state confidentiality law governing proprietary information was an exemption to the state's open meeting law.

The two legislative measures are an effort to clarify how the Tax Commission should proceed in taxpayer appeals.