Legal Battle Won by Exploration Companies

Legal Battle Won by Exploration Companies

6/15/ 2011

 

A key legal battle was won last week by exploration companies acting as the research-and-development arm of the mining industry in Nevada.

Judge James E. Wilson Jr. of the Carson City District Court ruled that fees levied by the State Legislature on mining claims are unconstitutional.

The ruling, which came only a day before the charges are supposed to take effect, stated that the fees are tantamount to a tax. The constitution of the state of Nevada permits taxes to be imposed only against the mining companies’ net income. It also prohibits the imposition of taxes on the property holdings of the industry.

A spokesman for the State Attorney General’s office, Edie Cartwright, said last week that state attorneys are evaluating the decision and still have to decide on whether they will appeal the ruling.

Adopted by the state Legislature in 2010 to close the state budget gap of $887 million, the fees would have ranged from $80.50 per claim for entities that have less than 200 claims to $205.50 per claim for those who own 1,300 or more claims.

In the brief filed by Reno attorney Thomas Erwin as a friend of the court in the Carson City case, he wrote, “The Legislature cannot discard the Constitution due to hard times.” He represents Claremont Nevada, an Elko-based exploration outfit, which is owned by the Buster Hunsaker family.

A separate legal challenge was filed by the exploration company last summer in Elko County.

The Carson City case was filed by Arthur R. Leger, a veteran exploration geologist in Nevada, along with mining exploration companies like the Desert Pacific Exploration Inc., BL Exploration LLC, Redstar Gold USA Inc., Western Exploration Inc., and MGC Resources Inc.

WRITTEN BY:

blakeh@wellsdrew.com