On a party line vote, the Legislative Commission voted Monday to appeal the ruling disqualifying legislative lawyers from representing Democrats in the lawsuit over the constitutionality of two tax bills.
Carson District Judge Todd Russell in November disqualified LCB from representing the majority Democrats in the Senate but allowed the legal division to stay in the case to represent the interests of the Legislature as a whole.
Republicans headed by Minority Leader James Settelmeyer, R-Gardnerville, argued and Russell agreed that LCB can’t represent one group of lawmakers against another group of lawmakers because the legal division represents the entire Legislature.
“It appears to this court there is a need for LCB to maintain neutrality with respect to all members of the Legislature,” Russell said in the November hearing.
He told both sides the individual lawmakers should either be dismissed from the lawsuit or they need to get private counsel
His ruling, if it stands, would require Majority Leader Nicole Cannizzaro of Las Vegas, Lt. Gov. Kate Marshall and Senate Secretary Claire Clift to get their own lawyers while LCB would represent only the interests of the Legislature as a whole.
Chief litigation counsel Kevin Powers told the commission Monday the ruling must be appealed because it would apply not just to litigation but all legal services. He said the ruling raises “serious questions” whether LCB legal would even be able to provide bill drafting if one group of lawmakers opposes the requested bill.
Powers said the appeal is needed to protect the integrity of LCB legal. He asked for a vote to direct LCB to take all actions necessary to overturn the disqualification.
The lawsuit argues that those tax bills were passed by a simple majority, not the two-thirds they say Nevada’s constitution requires. Republicans voted against the appeal despite being told voting against appeal could be a conflict of interest.
Republican commission members Settelmeyer and Joe Hardy of Boulder City said they don’t see a no vote as being a conflict.
They also objected to the fact that the Democrats have LCB legal help while they are paying their own legal costs.
Julia Ratti, D-Sparks, said her concern was that, “we don’t tear down the whole fabric of the nonpartisan LCB legal structure.”
Russell put the tax case itself on hold until this issue is resolved. The next hearing in the case is Jan. 21.
The eight Republican members of the Senate along with several boards and associations sued after the majority Democrats passed bills extending the sunsets that were scheduled to lower the Modified Business Tax rate and a DMV technology fee by a vote of 13-8. That is one vote shy of the two-thirds majority they argue has always been applied to sunset extensions as well as new or directly increased taxes.
They did so citing an LCB opinion that two-thirds isn’t required in this case because it wasn’t raising taxes, just extending existing taxes.
While the technology fee is tiny, the MBT extension was estimated to generate more than $100 million for K-12 education. Supporters of the vote argued that not passing the MBT extension would unconstitutionality unbalance the state budget.
Ironically, there is enough extra money in the state treasury to cover the $100 million if the Republicans win the lawsuit.