First bills to bring Tesla to Nevada sail through

Staff Writer
Columbus CEO

CARSON CITY, Nev. (AP) — The first two bills designed to seal a deal to bring Tesla Motors' $5 billion battery factory to Nevada sailed through the Assembly unanimously Thursday as one lawmaker called the project the biggest thing to hit the state since the Hoover Dam.

Lawmakers were optimistic the entire package worth up to $1.3 billion in tax credits and other incentives would clear both of the chambers controlled by Democrats and land on Republican Gov. Brian Sandoval's desk late Thursday or Friday.

After just two minutes of debate, the Assembly voted 39-0 and sent to the Senate a bill that would help finance Tesla's tax breaks by ending a $25 million annual subsidy — $125 million over five years — to insurance companies that locate their home offices in Nevada.

On another 39-0 vote about eight minutes later, they approved discounted electricity rates for the electric-car maker's "gigafactory," which is expected to help create more than 20,000 jobs and inject up to $100 billion into the state's economy over the next 20 years.

Assemblyman Ira Hansen, R-Sparks, was one of only two lawmakers to take to the floor during the brief debate on the two bills, calling it a "monumental and historic" opportunity to bring the factory to an industrial park east of Sparks.

"This is arguably the biggest thing that has happened in Nevada since at least the Hoover Dam," Hansen said about the colossal dam built on the Colorado River southeast of Las Vegas in the 1930s during the Great Depression.

Under the agreement, Tesla would have to spend $3.5 billion in the state within 10 years. It also mandates half the jobs go to Nevada residents, at both the factory expected to employ 6,000-plus and among the 3,000 projected construction jobs.

It wasn't clear if lawmakers would consider an amendment pushed by labor unions to require Tesla adhere to the same prevailing wage requirements that apply to public works projects — typically union wages — as established by the state labor commissioner on a county-by-county basis.

"With the state giving over $1.3 billion in giveaways to Tesla, workers must be protected with prevailing wage," said Danny Thompson, executive secretary of the Nevada AFL-CIO.

In the Senate, several Democrats continued to object to Sandoval's plan to cut all but $10 million from an $80 million program the last Legislature approved providing tax credits to the motion picture industry. That $70 million combined with the $125 million from the home insurance office credit would offset a total of $195 million in Tesla tax credits.

"I think it sets a dangerous precedent when we passed the program in the Legislature and then in just seven months, we just wipe it out," said Sen. Pat Spearman, D-North Las Vegas. "What if another shiny object comes along?"

Steve Hill, director of the Governor's Office of Economic Development, said the transferable tax credits Sandoval wants to shift to Tesla would represent only about 2.7 percent of what the company is projected to return in terms of payroll taxes, compared with 59 percent of the film industry payroll and 32 percent of the insurance industry through the home office credit.

"We felt repurposing those dollars was the most efficient use of those dollars and what they could produce," Hill said, adding that only 1 percent of the roughly 1,200 insurance companies doing business in the state qualify for the credit.

Opponents arguing against the Tesla tax breaks say the biggest corporate giveaway in state history wouldn't benefit typical middle-class Nevadans, but they conceded they were unlikely to block the deal.

"All the lobbyists for various interests say that unless you have a hand in the Tesla deal, it's not good for you," said Bob Fulkerson, state director for the Progressive Leadership Alliance of Nevada. "But everybody then also says that it's a done deal."