That’s due in part to a 13-page legal opinion from the Legislative Counsel Bureau that says the state is perfectly free to take away the generous, so-called green building tax breaks it enacted a scant two years ago, which could see the state lose millions in tax revenue.

Now, the common notion of fairness dictates that if the state is going to pass a tax plan (which it did in its oh-so-brief special session in 2005, in the form of Assembly Bill 3) and businesses are going to rely upon that tax plan and take certain actions and incur certain costs to comply, then the state shouldn’t go and change the rules, especially before the program is really even up and running.

But "fair," dear readers, is where the pigs are, or so says a Legislative Counsel Bureau legal opinion requested by Assembly Speaker Barbara Buckley. (We’re paraphrasing of course.)

See, the Legislature apparently didn’t realize when it passed AB 3 that the green building tax breaks would be so wildly popular, and that so many developers would take advantage of the program. (AB 3 allows a property tax break for 10 years and up to 50 percent and a sales tax break on materials purchased for green buildings. In some cases, the tax breaks amount to millions; and since sales and property tax go to support, say, public schools, all of a sudden there was a big problem.)

Now the Legislature has a nifty fix all ready in the form of Assembly Bill 621, and an amendment that was unveiled on Wednesday. It would exempt taxes for schools from the tax break, and reduce the property tax exemption from 25 percent for a “silver” environmental certification to 2 percent; 30 percent for a “gold” level to 5 percent; and 35 percent for a “platinum” level to 8 percent. (The certifications are issued by the Leadership in Energy and Environmental Design, or LEED.)

That’s clearly a dramatic reduction, and it caught the eye of several business leaders, who objected (more on that in a second). But first, let’s check the legal opinion that says it’s all OK. According to the document, prepared by Senate Legal Counsel Kevin Powers, AB 3 didn’t create an agreement or contract with anybody, it just created tax policy. Therefore, the businesses that moved forward to try to comply with the provisions of the law couldn’t rely on them in perpetuity, since they had to know they could be repealed at any time.

“Rather, the general laws only established a state’s tax policy, which always remained subject to revision and repeal by a subsequent state legislature. Consequently, the [U.S. Supreme] Court held that a subsequent state legislature had the power to amend or repeal the tax abatements and exemptions at time, regardless of whether any person had already incurred expense to comply with the requirements of the tax abatements and exemptions,” the opinion says.

Quoting a U.S. Supreme Court decision as proof, the opinion adds: “Its [the law’s] continuance is a matter of public policy only; and those who rely on it must base their reliance on the free and voluntary good faith of the legislature.”

The free and voluntary good faith of the Legislature? When money is on the table? We’re afraid the well-known legal doctrine articulated in the seminal case of Fickle Finger of Fate v. U.R. SOL, Inc. is implicated here, which finding famously declared, “the milk of human kindness has dried up at the tit.”

But check this out, if you will: Back in 1872, the Michigan Legislature established a law that totally exempted all property used to bore for salt, and agreed to pay a bounty of 10 cents per bushel of salt manufactured from salt brine bored out of wells in the state. Some poor saps formed an entire company — the East Saginaw Salt Manufacturing Co. — and produced at least 5,000 bushels of salt. But just two years later (coincidentally, the same time frame we’re talking about here) the Michigan Legislature amended the law to limit the tax exemption to just five years, and put a $5,000 cap on the bushel bounties. The Salt Co. sued, but the U.S. Supreme Court eventually rejected the argument, saying the company acted based on a general law — not a specific promise to the company — and thus the law was always subject to repeal.

Brutal and unfair? Most definitely. This company was created in response to a law, and got totally screwed just two years thereafter. In Nevada, existing companies were simply taking advantage of a new law for new construction.

But legal? According to the U.S. Supreme Court, perfectly so.

So can companies sue the state under a legal doctrine called “estoppel,” which basically says that if a person relies on what another person tells him — and gets screwed in the process (we’re paraphrasing, of course) — the first person is “estopped” from exacting negative consequences against the first?

No way, says Powers’ opinion.

“Indeed, if the doctrine of estoppel could be applied against the state under such ordinary circumstances, it would be nearly impossible for the state to enforce new or revised laws against existing industries,” the opinion says. “Accordingly, it is a well-established rule that application of the doctrine of estoppel is always subordinate to the sovereign power of the Legislature to amend or repeal laws to protect the public interest.”

And one more: “We believe it would be patently unjustifiable and unreasonable for a person to reply on the continued existence of tax abatements or exemptions enacted by general laws given the centuries-old principle that such general laws are always subject to amendment or repeal by a subsequent legislature,” the opinion says. “Simply put, it would be naïve and ill-adivsed for a person to assume that existing tax laws will not change. Thus, if any person committed money, time and resources to apply for and qualify for the existing tax abatements and exemptions enacted by sections six and seven of AB 3, the person was ‘bound to take notice of the fact that the legislature was at liberty to repeal the act at any time.’"

In other words, it’s naïve and ill-advised for people to rely on the state not to totally screw them over after they’ve made good-faith efforts to comply with a new law, admittedly in order to save money on their new building projects? It’s naïve and ill-advised for people to trust the state not to change the rules of the game in the middle of that game, thus costing them money that they (likely) otherwise would not have spent? It’s naïve and ill-advised to think that the “good faith of the Legislature” is either “good” or “faithful”?

That’s precisely what the opinion says. And it could have dangerous consequences for the future.

What person is going to choose to try to comply with a new law that may have noble purpose (in this case, using less energy and contributing less to global climate change) if they suspect that the promises and programs and policies of today are going to change entirely tomorrow? If there is no stability in the law, the answer is: Only a naïve and ill-advised, person. To coin a phrase.

Doubt us? At a hearing on the amendment to AB 621 Wednesday, Boyd Gaming representatives said the amendment precludes them from participating in the program. Boyd’s Echelon Place President Kevin Sullivan said his company applied for the program in good faith, but the Legislature (assuming the amendment is approved) will have taken a credit worth $100 and effectively made it worth less than a dollar.

Attorney Terry Graves, representing the World Jewelry Center, planned for downtown Las Vegas, said that area’s only chance of restoration is jeopardized by the abatement. (Granted, he had to defend himself against another provision in AB 621 that says you can’t get green building tax rebates if you’re getting other tax incentives, which World Market Center is, thanks to its location in the city’s redevelopment area. The project has been accused of “double-dipping,” which as you all know is a total party foul with both chips and taxes.)

MGM Mirage lobbyist Tim Crowley very politely said that his company is opposed to the amendment, a low-key presentation that belied the fact that MGM Mirage probably has the most to lose, since it’s $7 billion Project CityCenter has applied for the tax breaks under the existing scheme.

Yes, yes, we know: Never feel sorry for a man who owns a plane. These are big businesses, and they have enough money that we shouldn’t be too worried that it’s their ox being gored. But it’s the principle at stake that is more important: If you can’t rely on the law as passed by the government when you’re about to do something, how badly could you be screwed?

Say, for example, that you got a tax rebate from Nevada of $1,000 per year for five years if you buy a Toyota Prius, a hybrid Honda Civic or the like. And then, after one year, the Legislature changes its mind and says, forget it. It’s costing us too much money. We’re capping the rebate at one year. You bought the car anticipating a $5,000 break, which you suddenly don’t have. How pissed would you be, especially if you got a letter from the state saying, well, you should have known we can change the rules at any time? Sorry about that.

Essentially, that’s what’s being said in some of these hearings. And whether or not that’s the final word is something everybody’s waiting to find out.