Desert Rock tax break bill dies

By Kristen Davenport
For the Independent

SANTA FE — A bill that would give a tax break to the company planning to build a power plant at Desert Rock on the Navajo Nation is almost certainly going nowhere.

"It's not going anywhere," said Rep. Ray Begaye, D-Shiprock. "This is dead."

For the third time, a House committee late Wednesday tabled the proposal which would have given a tax break worth $85 million to Sithe Global Power. Supporters of the bill say that the dual taxation on Sithe's planned power plant is unfair both to the Navajo tribe and to the power company, and a tax break would show a basic respect for Navajo sovereignty.

But the House Energy and Natural Resources Committee tabled the issue, and the committee chairman said he won't allow the question on the agenda again.

A similar bill in the Senate might have a better chance there, Begaye said, but wouldn't make it through the House without some amendments the Senate would never accept.

"This has got zero chance of getting through this session," Begaye said.

Sen. Lynda Lovejoy, D-Crownpoint, says the issue was confusing to lawmakers even those from Navajo land. Lawmakers have been subjected to loud lobbying from all sides from activists who want no power plant at all for environmental reasons, to corporate lobbyists who think Sithe Global Power deserves a tax break.

"Everyone is coming from different directions on it," Lovejoy said.

For instance, some lawmakers such as Begaye had said they would support the tax break if it included stringent and clear environmental regulations attached to it. Lovejoy said she had hoped not only for strict emissions controls based on California laws but she also wanted to take the 85 percent tax break down to 70 percent, putting the rest of the money into a fund to help build utility infrastructure on the reservation for families without electricity or running water.

"But it seems like it's a dead issue on the House side," she said.

Both the Navajo Nation Council and Navajo President Joe Shirley have strongly supported the Desert Rock plant, however. And Rep. Patty Lundstrom, D-Gallup, said she thinks the House's refusal to respect the tribe's wishes shows some disrespect.

"My feeling is that if the Navajo Nation approved it, I think we need to respect their sovereignty and move ahead with it," she said. "I think it's a slap in the face, ignoring these kinds of requests from the tribe."

But Begaye said the tribe shot itself in the foot, in a way, by sending poor representation to the Roundhouse. Begaye said Navajo Vice President Ben Shelly offended some lawmakers when he went to Santa Fe to lobby for the bill.

"The Navajo government approached this in the wrong way," said Begaye, adding that he will meet with Navajo President Joe Shirley today to talk about the Desert Rock and other issues.

Begaye said he would insist on stringent environmental and emissions requirements before supporting any tax break. But others say the legislature should have respected the tribe's wishes.

"My understanding is, the plant is going to be built anyway," Lundstrom said. "It's going to move forward. So why should this business be punished by having to pay the dual taxation (tribal and state)? If it's going to happen anyway, they should get the tax credit."

Lundstrom said she would have voted for the tax break if it had appeared in her committees, but members of the Energy and Natural Resources Committee said that if the plant is going to be built regardless, why should the state give the tax break rather than collect the money and put it to good use?

Sithe Global Power, records show, gave almost $6,000 to New Mexico lawmakers' campaigns in 2005 and 2006. None of those contributions went to Navajo lawmakers. Lundstrom received $200 in 2005, and two Cibola County lawmakers George Hanosh and Joe Fidel received similar amounts from Sithe that same year.