What makes Nevada’s special session for Tesla so special?

By Kyle Roerink

Tuesday, Sept. 9, 2014 | 2 a.m.

State lawmakers will convene Wednesday in Carson City to vet the promises Gov. Brian Sandoval made to win Tesla's $5 billion battery plant.

Nevada beat out four states to win the electric car maker's business by offering Tesla up to $1.3 billion in tax incentives, one of the largest such deals in U.S. history.

But so far, all the negotiations have been behind closed doors.

The legislative process this week will shine some light on how Nevada won the deal and explain how the state plans to afford it while keeping up with demand for public services.

No one expects the Legislature to vote down the deal. But here's what you can watch for in Nevada's 28th special session in the state's 150-year history.

What makes this session special

The high-dollar figure of the Tesla deal requires Sandoval to seek the Legislature’s OK. Now the proposed package of tax abatements and credits needs to take shape in legislation.

Lawmakers had yet to see the draft bills as of Monday. But the draft bills are likely to allow Tesla to bypass dealers and sell direct to consumers and set benchmarks for Tesla to meet before receiving tax breaks.

The cost of the special session is estimated at $60,000 for the first day and $25,000 for each additional day.

The session isn’t likely to go beyond Thursday. But the timetable is still unknown.

“It’s a crapshoot,” said Ray Bacon, lobbyist for the Nevada Manufacturers Association.

Quiet in the lobby

The libertarian Nevada Policy Research Institute and the liberal Progressive Leadership Alliance of Nevada raised questions about the deal. But representatives for the state's car dealers aren’t making a stink, even though Tesla would get special treatment as a car manufacturer that can sell directly to consumers.

The Nevada Franchised Auto Dealers Association is “100 percent behind” the project, said John Sande, the group's lobbyist.

The Alliance of Automobile Manufacturing is reviewing the Tesla package, said Alfredo Alonso, a lobbyist for the alliance.

Bacon said the Nevada Manufacturers Association was in favor of the deal. Bacon will spend the special session explaining how Tesla will meet building codes and how Nevada will help train workers for the plant.

“I will be answering a lot of strange questions,” he said.

Bacon acknowledges he doesn’t have all the answers. “There’s never been anything else like this,” he said.

Election freeze

Early September is a precious time for candidates seeking to raise money and knock on doors.

Each statewide office, 11 Senate races and all 42 Assembly seats are up for grabs in the Nov. 4 election.

But state law says incumbents must put their campaigns on pause. Lawmakers are not allowed to fundraise from the time Sandoval orders the Legislature to convene until 15 days after the special session ends. Sandoval also must take a break.

That could pose problems for a few lawmakers caught in tough election fights.

Republican Assemblywoman Michele Fiore asked for money by email in light of the 15-day campaign freeze.

“I need your help. Because of this special session, we will not be able to raise a penny for our campaign for two weeks…” Fiore wrote in the email.

Democrat Assemblywoman Lucy Flores and Republican Sen. Mark Hutchison are squaring off for lieutenant governor in a high-profile, big-money matchup.

Hutchison and Sandoval had fundraisers scheduled for next week in Washington, D.C. But they’ve had to recast the events as “meet and greets.”

Las Vegas Republican Sen. Barbara Cegavske is in a close fight against Treasurer Kate Marshall for secretary of state. Forced to reschedule campaign plans, Cegavske headed to the north on Friday for some fundraising before the special session. Cegavske, who served in the Legislature for 18 years, was happy to rework her plans.

“We are making history,” she said.

Key questions

The Tesla news prompted celebrations, but not everyone is smiling.

The deal has reopened the north-south debate over taxes and state spending. Tesla will create 6,500 jobs at its factory and an additional 15,500 jobs elsewhere.

But for Sen. Kelvin Atkinson’s district in North Las Vegas, those numbers mean very little. His constituents, who have struggled with high unemployment, have called asking if they would see any jobs from Tesla.

His answer: “Not one person I represent will be getting those 6,500 jobs,” he said.

For skeptical lawmakers, it's not clear how much of the Tesla deal can still be negotiated.

“It’s a take-it or leave-it situation,” said Sen. Tick Segerblom, a Las Vegas Democrat.

Sandoval proposed eliminating property, sales and other taxes for the next two decades. Tesla is also eligible for tax credits for jobs and other investments.

Those incentives have some leaders wondering if the Tesla deal will set a precedent.

“Is the Legislature prepared to make this kind of deal for other businesses who want to come to Nevada?” said Andy Matthews, president of the Nevada Policy Research Institute.

Tesla’s presence also will create new demand for public services.

The new growth will draw demand for new roads, teachers and public safety officials. Tesla vowed to invest $37.5 million directly into K-12 education to offset the new demand on schools.

Some lawmakers think that won't be enough.

Segerblom will vote for the deal but said without raising taxes “Washoe County is going to suffer.”