## Facts

- Clean Water Coalition (CWC) was a joint powers authority created by an interlocal agreement among four Clark County political subdivisions to manage wastewater and water-quality matters.
- CWC accumulated funds for a regional wastewater conveyance project financed through sewer connection and usage fees collected from local households and businesses.
- During a budget crisis, the Nevada Legislature enacted Assembly Bill 6 (AB 6).
- Section 18 of AB 6 required a one-time transfer of approximately $62 million in CWC securities and cash to the State’s general fund for unrestricted governmental use.
- Local fee-paying businesses and entities (including The M Resort and others) objected that money collected for wastewater purposes was being redirected to general state spending.

## Issues

1. Whether AB 6, Section 18 functioned as a tax rather than a permissible reallocation of funds.
2. Whether Section 18 was an unconstitutional local or special law “assessing and collecting taxes for State, county, and township purposes” under Article 4, Section 20 of the Nevada Constitution.
3. Whether targeting a single political subdivision for a revenue-raising transfer to the State’s general fund violates the constitutional prohibition on local and special taxation laws.

## Decision

- The Nevada Supreme Court (en banc) reversed the district court’s summary judgment for the State.
- The court held Section 18 unconstitutional and unenforceable.
- The court concluded Section 18 effectively imposed a tax for state purposes and did so through a local and special law because it burdened only CWC.

## Legal Principles

- Article 4, Section 20 of the Nevada Constitution prohibits local or special laws for “assessing and collecting taxes for State, county, and township purposes.”
- Courts look to the substance of a fiscal measure; redirecting locally raised user-fee reserves to the State’s unrestricted general fund use may be treated as a tax.
- A statute that singles out one political subdivision as the only source of a revenue-raising exaction for statewide purposes is a prohibited local and special tax, not a valid general law.

## Conclusion

Section 18 of AB 6 was invalid because it converted locally collected sewer-fee reserves into a state-revenue measure imposed on only one political subdivision, violating Nevada’s constitutional bar on local and special taxation laws.


Clean Water Coal. v. The M Resort, LLC, 255 P.3d 247 (Nev. 2011)