Nevada business leaders want special session for Tesla incentives

Associated Press

Published Monday, Aug. 11, 2014 | 11:15 a.m.

Updated Monday, Aug. 11, 2014 | 1:20 p.m.

SPARKS — Nevada business leaders want the Legislature to consider holding a special session this year to put together an incentive package to help lure Tesla Motors' $5 billion lithium battery factory to the state, but so far lawmakers aren't sold on the idea.

Nevada has a head start in competition for the "gigafactory" after Tesla officials confirmed they did site work at an industrial park east of Sparks. But the electric-car maker is keeping its options open with plans to break ground in Texas, California, Arizona or New Mexico.

Texas and California especially have more financial resources to offer in the bid to secure the plant and an estimated 6,500 jobs.

But Nevada economic development laws allow several incentive programs, from abatements on personal property, sales and business taxes to sales tax deferrals, according to the Legislative Counsel Bureau.

Any changes or additions would require legislative action, and Nevada's biennial Legislature won't convene again until Feb. 2, 2015. That looks to be past Tesla's timetable.

CEO Elon Musk, speaking to Wall Street analysts July 31, said he expects the winning state to cover "maybe 10 percent" of the factory's cost — the $5 billion figure is the cost through 2020. He said groundwork will be done in one or two other states with a final site selected "in the next few months."

Given that schedule, it would take a special legislative session by the end of the year to make changes targeting the factory, Ray Bacon, executive director and longtime lobbyist for the Nevada Manufacturers Association, told the Reno Gazette-Journal.

And he said it's unclear what the difference is between Nevada's offer and what Musk estimates the winning state's share of the factory cost could be.

"If it's $20 million or $30 million, that's doable. If it's $300 million, a special session for sure," he said.

Gov. Brian Sandoval would have to call the session, and he's not talking.

Nevada already seems to be a strong candidate without sweetening the pot, Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, and Assembly Minority Leader Pat Hickey, R-Reno, said.

"We are constrained by the Constitution to just give money," Kirkpatrick said. "We don't have a checkbook such as Texas has. A special session does us no good."

Nevada already has some great incentives in place, Hickey said.

The state's site about 200 miles from Tesla's Palo Alto, California, headquarters is near the Union Pacific railroad and significant lithium deposits, in a right-to-work state with no income tax and abundant solar and geothermal power resources.

"Nevada can't compete with California or Texas in terms of financial incentives, but we're attractive on merits, or why else would Tesla have broken ground and considered Nevada a top contender?" Hickey said.