*1 630

CONCLUSION above, claims that appellants’ we conclude reasons stated For the are barred procedurally the case and the law of by precluded are we Accordingly, 34. Chapter of NRS to the provisions pursuant relief on denying appellants’ orders court’s affirm the district petitions.80 COMPANY, Appellant, v. THE GOLD MERIDIAN

THE OF DEPARTMENT OF NEVADA ex rel. STATE COMMISSION; TAXATION; COUNTY TAX NEVADA Respondents. MINERAL, NYE; COUNTY OF OF No. December for Village, Appellant. Incline Bancroft,

Paul D. Hicks, Sandoval, General, Deputy J. and Joshua Attorney Brian General, City, Respondents Department for Carson Attorney Tax Commission. Taxation and Nevada Emm, Yohey,Deputy and Paul G. Attorney, District Cheri K. County. Mineral County, Respondent Mineral Attorney, District Beckett, L. Knight and Peter Attorney, District Robert S. Zlotek, Nye County, for Attorneys, District Deputy Marla Nye County. Respondent Justice, participate in the de did not Myron E. Leavitt, 80 TheHonorable of this matter.

cision *2 Before the Court En Banc.1

OPINION Court, Gibbons, J.: By affirming

This court of the district judgment an from appeal is deficiency determination. Taxation tax Department a Nevada Meridian originally granted appellant Nevada Tax Commission depreciation an accelerated to use application Gold Company’s closing its that it was assertion based on schedule depreciation the accelerated later revoked The Commission mine. through cyanide gold to produce Meridian continued grant because assessed date. The Commission after the closure heap termi- $860,628.57 Meridian failed to in because taxes Meridian court that the district argues Meridian mining operations. nate its the tax de- to uphold decision affirming the Commission’s erred issue, meaning of analyze the this we must To resolve ficiency. 362.160, mining requires which under NAC “mining operation” addi- to pay schedules depreciation using operators mining operations. their if do not cease they tional taxes “mining op- meaning phrase that the plain We conclude Thus, from earth. metals extracting precious eration” includes Court, Blake, District Judge the Third Judicial E. Archie 1 TheHonorable Myron E. by place The Honorable designated the Governor to sit was Const, Leavitt, art. 4. Justice. § cyanide heap leaching mining and the operation, district court did err in affirming not that requirement Meridian pay additional taxes.

FACTS Meridian a mining company operated Paradise Peak Mine. On March applied Meridian for accelerated de- 362.160, of its assets under preciation NAC 362.100 to which mining operators allow to accelerate their assets’ if depreciation occasions, On operations cease. several Meridian repre- sented to the Commission that it would close the mine in mid- 1993. Based on Meridian’s representations, Commission granted Meridian accelerated of all its leasehold im- and fixed provements equipment three-year over a period from 1990 to 1993.

In Meridian laid off most of its mine employees and shut However, down mill. from mid-1993 until Meridian pro- 45,000 47,000 duced or gold ounces of through leach pads at Discovering site. that Meridian continued to extract gold after mid-1993, close, when Meridian that the mine reported would *3 taxes, Commission imposed additional penalties, and interest on $1,257,993.75.2 Meridian. The total assessed tax was Meridian appealed the Commission’s decision through the tax After agency. considering the evidence and conducting hearing, a the hearing officer decided in the Commission’s favor and upheld the tax imposition. The eventually Commission waived the interest and Then penalties. Meridian unsuccessfully the appealed hearing officer’s decision and ultimately filed a petition judicial for review.

The district court remanded the case to the Commission to de- termine the definition of “mine closure” under NAC 362.160. The Commission as responded follows:

Mine closure for of the purposes accelerated depreciation contemplated NAC 362.160 the cessation of operations of mine. Cessation of operations no contemplates further production of reduction, minerals through operation, beneficiation or any other treatment by used the mine .... The operator production reporting any amount of gold (minerals) after the stated date of mine closure is in- consistent with the cessation of of a operation mine. The Commission also stated that the definition was to apply only to Meridian and any not to other taxpayer. district court adopted Commission’s definition upheld deficiency tax. 2 Thebase tax $860,628.57 was with a of $58,849.31 and interest of penalty $338,515.87.

633

DISCUSSION is that the Commission’s argument appeal main on was arbi- schedule to revoke the accelerated decision decision, we review an administrative trary and When capricious. “ in order to agency evidence to presented we must ‘review the arbitrary or capri- decision was agency’s determine whether ’’3 An agency’s an of the discretion.’ cious and was thus abuse not supported when the decision is abuse of discretion occurs that which “Substantial evidence is substantial evidence.4 by a adequate support as to might accept ‘a reasonable mind ’’5 conclusion.’ closure Mine 362.160 should be con- that NAC 362.100 to argues

Meridian contain no definition for they Meridian’s favor because strued in Meridian, “mine it understood According closure.” to “mine of re- purposes cyanide heap not to include closure” ceiving depreciation. or “mine “mining operations” definition of specific No “ ‘The construction 362.100 to 362.160. exists in NAC

closure” ”6 We de novo review.’ subject of law to question a statute be their generally given a will that “words in statute have stated act, spirit violates reading unless such meaning, plain face, beyond not may go courts is clear on and when statute have intent.”7 We legislative consider language to the statute’s ab- language to avoid statutory must construe further held that “we statutory construction Rules of unreasonable results.”8 surd or regulations.9 to administrative apply NAC 362.160 states 1134, Tretiak, 1137-38 Nev. 3 Secretary v. 117 State 717, 721, P.2d Authority, (2001) Airport Clements v. (quoting (1995)). P.2d Dep’t, 110 Nev. Vegas Metro. Police 4 Tighe v. Las *4 .

1032, (1994) 1034 Hotels, 606, 608, State, 729 Security 102 Nev. Emp. v. Hilton (quoting 5 Id. 497, (1986)). 498 P.2d I, 67 P.3d Vegas Nev. 119 v. Amedeo Commercial 6 California 753, 749, , County Upchurch, v. 114 (2003) Clark (quoting 328 330 of 754, (1998)). P.2d 757 961 519, State, 860, 873-74, (2001). P.3d 528 34 7 Pellegrini v. at 528. 8 Id.at (Conn. App. Ct. n.7 Rocque, A.2d 190 v. 802 Pond Co. 9 Miller’s D.O.T., 714 N.E.2d Advertising v. Indiana

2002); Co. U.S. Outdoor 1999). (Ind. App. Ct. a mining operator who has been allowed to depreciate as- [i]f sets the accelerated using method fails to cease operations on the date specified of closure in the notice required by NAC 362.100 at any or time reopens mining operation, he . . shall. to the within 30 [p]ay department days after demand the difference between the net proceeds taxes using straight-line method of over a 20-year period and the amount paid using accelerated method any in which year the accelerated method was used. added.) (Emphases We determine the question to be: what is the plain meaning of or “operations” “mining operation”? “the

Mining process is or business of working mines.”10This definition suggests that if the action performed is mines, or process working business of it must be a of part mining. Another definition of mining is process or business of ex- “[t]he tracting metals, from the earth or precious valuable either in definition, their native state or in their ores.”11Under the extract- ing gold earth mining. from is The American Law Mining also considers heap leaching to be mining because it explains the under the process heading “Basic Mining Technology.”12 We must understand what heap leaching is to determine whether it is within the regulation’s plain meaning. Cyanide extracting method of precious metals from previously ex- tracted ore. process moving involves large quantities of ore onto a huge pad cyanide where placed over the ore removes the case, precious metals over a of time. In period the instant approx- imately .03 within gold ounces of were each ton of ore. After al- years ore, most two and moving about three billion pounds of 45,000 47,000 Meridian extracted or ounces of gold. This is the only in which process Meridian engaged from 1993 to 1995. mining

Traditional drilling involves into the earth and extracting precious metals. It differs from heap leaching significant two First, ways. traditional mining digging includes into the ground and either stripping ground of metals or tunneling deep within the earth. Heap leaching entails moving previously extracted ore. Second, traditional mining requires drilling machines and explo- sives, whereas heap leaching utilizes chemicals to remove the pre- cious metals from the ore. Although still a mining process, heap leaching does not involve digging, tunneling, or explosives.

We conclude that heap leaching operation contem- under plated definition, NAC 362.160. Absent a specific the plain meaning “mining operation” must include heap leaching be- Collegiate

10 Webster’sNinth Dictionary New Dictionaiy (5th 1979). 11 Black’sLaw ed. (The 12 1American Mining Law Rocky § Mountain 1.07[6] Mineral Law ed., 2003).

Foundation 2d ed. *5 (2) and (1) mining technology pre- cause is a basic Additionally, earth. it would be ab- cious metal is extracted from “mining as a be- heap leaching operation” surd not to consider Therefore, the mining. else but anything cause it cannot be re- affirmed the Commission’s decision to properly district court voke accelerated schedule for continued depreciation date after the of closure.13 mining operations specified Arbitrary capricious and

Meridian contends that the Commission’s decision to revoke its was depreciation of Meridian’s approval application determining We have stated that arbitrary and capricious. “[w]hen generally give an administrative courts validity regulation, of that the agency’s deference’ to an of a statute ‘great interpretation However, we “will not hesi- charged enforcing.”14 with agency regulation invalid when the violates the regulation tate to declare a constitution, existing statutory with or exceeds provisions conflicts authority agency arbitrary or is otherwise statutory capricious.”15 362.160(2), regulations, the Commission’s provides

NAC of the date of operations who fails to cease on operator that a mine the net taxes proceeds shall the “difference between pay closure over a 20-year period method of using straight-line depreciation year method for using any and the amount the accelerated paid ’ language, method was used.’ Under this which the accelerated schedule from an accel- may change depreciation Commission the mining opera- a schedule when twenty-year erated schedule to standard, regulations a impose cease As operations. tor fails to mining industry.16 schedule on the entire twenty-year depreciation mining to only operators Accelerated is available depreciation NAC 362.100 to 362.160. Those with the provisions comply that a must many operator regulations provide requirements Some of of its assets. meet to for accelerated qualify Commission, with the filing include a petition these requirements thirty-six the mine will close within notice that giving public 362.160 contained no that NAC 362.100 to 13 Thedistrict court determined for a remanded the case to the Commission of “mine closure” and definition 24, 2001, On December hearing proper definition of “mine closure.” on the erred in We hold that the district court defined mine closure. the Commission unambiguous; hearing “mining operation” is remanding since the case for however, “mine clo the Commission defined harmless because the error was consistently “mining operation.” with sure” Farm, 14 State, v. State Div. Insurance 15 Id.

16 NAC362.040.

months, publishing the notice in the annual company’s report, Commission, providing copies those notices to the filing a copy of a with plan the Commission for use of the productive land after the mining has stopped, ceasing mining operations on the *6 date of closure in the specified filed notice.

Companies that do not with NAC 362.100 comply to 362.160 remain on the standard twenty-year depreciation schedule. Meridian for accelerated applied depreciation, but failed to comply with regulations. the Specifically, Meridian failed to cease mining on the operations specified date of closure.17 The Commission then the imposed standard twenty-year depreciation schedule on so, Meridian. In doing the Commission followed regular prac- tice. Placing Meridian on the same depreciation schedule as the rest of the mining industry was not an arbitrary or capricious act. Administrative rulemaking argues

Meridian that the Commission’s twenty-year depreciation schedule arbitrary is and is not authorized by its statutory mandate. Meridian contends that NRS 362.120(3)(g) specifically the requires Commission to consider the life probable of a mine’s equipment when calculating depreciation. NRS 362.120(3)(g) states:

The net proceeds are ascertained and determined by subtract- ing from the gross yield . . . [depreciation of the original capitalized cost of the machinery, equipment, apparatus, works, plants facilities (e). mentioned in paragraph annual depreciation charge consists of amortization of the original cost in a manner prescribed by regulation of the Nevada tax commission. The probable life of the property represented by the original cost must be considered in com- the puting depreciation charge.

The statute the authorizes Commission to prescribe the manner of depreciation by regulation and also states that the probable life of must be property considered in computing depreciation. The Commission promulgated the twenty-year depreciation schedule that currently use and the provisions for accelerated depreciation.

We “will not readily an disturb administrative construction that is within the language of the statute.”18“Great deference will be afforded to an administrative body’s interpretation when it is within moreover, the statutory language; the Legislature’s acquiescence in 17 NAC362.160. Saveway, 18 Stateex rel. Tax Comm’n v. interpreta- indicates that the interpretation

an reasonable agency’s intent.”19 legislative tion is consistent with to the Commission’s construction Giving deference appropriate depre- we conclude that the Commission’s 362.120(3)(g), of NRS requirement are consistent with the statute’s regulations ciation calcu- life when property’s probable the Commission consider First, different assigned the Commission has lating depreciation. to different depreciation periods types property equipment.20 Second, may adjust that the Commission regulations provide if the mining company petitions the allowable depreciation period that the property’s expected the Commission and demonstrates regula- in the general depreciation life is other than that provided the prop- It that the Commission does consider appears tion.21 thus schedules. setting life in erty’s expected Moreover, in- in the Commission’s Legislature acquiesed has regulation remains unaltered.22The because statute terpretation regulation in effect since 1991.23The Meridian contests has been schedule on the entire twenty-year depreciation imposing since 1980.24 industry has been effect

CONCLUSION under NAC 362.100 to mining operation Heap by revoking did not abuse its discretion 362.160. The Commission when Meridian violated We have reviewed all of Meridian’s of NAC 362.160. provisions merit. they and we conclude that are without arguments, other court. judgment we affirm the district Accordingly, J., J., JJ., Blake, D. Agosti, Becker, and and C. Rose concur. J., concurring:

Shearing, of Taxation is correct in de- Department I that the Nevada agree Meridian Gold owed additional taxes termining Company that the de- rather than the accelerated straight-line depreciation based on However, disagree phrase I originally approved. preciation clearly cyanide includes unambiguous “mining operation” acknowledges, traditionally, mining majority As the heap leaching. extracting metals. ground precious into the digging involves 19 Id. NAC 362.040(1)-(5). 362.040(8).

21 NAC

22 Saveway, at 668 P.2d at 294.

23 NAC362.160. 362.040.

24 NAC Cyanide does not heap leaching digging involve the ground into and extracting precious metals. The material being treated is al- ready above the earth. Meridian closed the mine itself and con- cluded that its mining operation was completed.

However, considering the fact that the being material leached for precious originally metals was extracted from the mine and was an metals, integral part process gaining the precious Nevada Department of Taxation reasonably interpreted leaching process to be of a “mining operation.” As the ma- indicates, jority this court will give deference to an administrative body’s interpretation when it is within the statutory language.1 Therefore, the judgment of the district court should be affirmed.

Maupin, J., concurring: The Commission granted Meridian the right to accelerate de- preciation of Paradise Peak Mine leasehold improvements and fixed equipment for state tax purposes based upon projected mine clo- sure date treatment, In mid-1993. its application for this tax Meridian repeatedly stressed that exhaustion of ore bodies neces- However, sitated the 1993 closure. between 1993 and Meridian continued gold production from extracted previously ore through cyanide view, heap leaching In process. my that process constituted “mining date; operations” after the projected closure accordingly, Meridian was not entitled to accelerated depreciation mid-1993, based upon closure and the Commission as- properly sessed an additional tax based upon straight-line depreciation.1 ASSOCIATES, HARRIS Corporation, Appellant, Nevada v. CLARK DISTRICT, COUNTY SCHOOL A Political Respondent. Nevada, Subdivision of the State of

No. 38140 *8 30, December 81 P.3d 532 1 State Saveway, ex rel. Tax Comm’n v. 1 SeeNAC 362.160.