Ask us anything about Nevada’s Tesla proposal

By Conor Shine

Published Wednesday, Sept. 10, 2014 | 2:45 p.m.

Updated Thursday, Sept. 11, 2014 | 12:13 p.m.

Nevada lawmakers today are debating a $1.3 billion package of tax incentives to recruit Tesla's new battery factory to an industrial center near Reno.

For a deal of this size (it's 15 times bigger than any previous Nevada subsidy), it's moved fast. Gov. Brian Sandoval publicly announced the terms on Thursday. Six days later, the Legislature is hearing the bills and will vote soon.

What questions do you have about the Tesla deal? Share your questions in the comments here, Twitter with #AsktheSun or on our Facebook page. We'll collect the best questions and our answers here in this post later.

Your questions and our answers from Sept. 10

Q. If Tesla's business model is not embraced and they file bankruptcy, who owns the property and the debt? -- Jamie Cortez via Facebook

The property and debt would likely be divvied up among Tesla’s creditors should the company’s Nevada venture fail. The state isn’t loaning Tesla any money, so it wouldn’t be one the list of creditors. If Tesla fails, the state could attempt to “clawback” some of the tax incentives it has already paid out.

Q. Are all small businesses able to get the same tax breaks as Tesla? Or is this one of those rare instances where the 14th amendment of equal protection under the law just doesn't apply? -- Jason Smith via Facebook

A. The state is reportedly working on legislation that would set the minimum investment needed to qualify for the tax breaks at $3.5 billion.The bills do not specifically name Tesla.

Q. So is it true that because of this our film production grants will be taken away or reduced? -- Jill Villanueva via Facebook

A. Yes. If legislators approve the deal without any changes, $70 million earmarked for film tax credits would instead be given to Tesla. That would leave $10 million leftover for filmmakers, as described in the state summary of the deal.

Your questions and our answers from Sept. 11

Q. Considering how many hundreds of millions of dollars, maybe billions, that the Tesla deal is going to bring to the Silver State, why does $70 million of the film tax credit have to go to Tesla? Why does one industry have to sacrifice for another industry when the Legislature and the Governor both endorsed the film industry tax incentive last year? Any answer to these two questions? -- Nick Danger via LasVegasSun.com

A. In an effort to scrounge up every dollar possible for Tesla, the $80 million sitting in the film tax credit program proved too irresistible for state leaders to pass up. The money had already been allocated, so shifting it to Tesla doesn’t affect the state’s bottom line. The film tax credit is also a relatively new program -- it began in January -- meaning it doesn’t have the track record or political support to win out over Tesla. Gov. Brian Sandoval proposed cutting the film tax credit from $80 million to $10 million. Senate Democrats from Southern Nevada tried to restore some of those cuts but they couldn't convince the governor to change his mind. Film industry advocates are now hopeful some or all of the funding will be restored during the 2015 Legislature.

Q. I want to know what programs are going to take cuts to pay for it. 100 to 1 education is top of the list. -- John Edmond via Facebook

A. Whether programs will be cut, and what might be targeted, remains to be seen. No state money is being given to Tesla up front, so state and local budgets won’t be impacted immediately. That could change over time, as Tesla uses government services -- like police, fire and sewers -- without paying the taxes needed to fund them. State leaders hope that taxes from Tesla employees buying houses, cars, groceries and other good will help make up some of the difference. They also expect that Tesla will attract suppliers and employees who will pay taxes. But if government budgets are stretched too thin, the $1.3 billion Tesla won’t have to pay could mean cuts to government services or programs, whether its education, health or public safety.

Q. So this place is gonna be built near Reno. What is the positive affect for Las Vegas other than added gaming and hotel revenue? I'm happy this is happening but we need to make Vegas more family friendly. 6,500 high paying jobs would help here. Why so far away from our city? - Shawn Gibson via Facebook

A. There don’t seem to be many direct positive benefits for Las Vegas in the Tesla deal. UNLV is supposed to get $1 million to research battery technology, but that’s about it as far as direct benefits. Southern Nevada could benefit if Tesla leads to a broader economic resurgence in the Reno area. The state general fund relies heavily on Southern Nevada gaming and tourism tax revenues. That money is spent throughout the state, and Southern Nevada leaders worry Las Vegas puts in more than it gets back out. A strong technology and manufacturing industry up north could boost tax collections and lessen the reliance on Southern Nevada dollars to fund statewide programs.

Q. How will the byproducts and toxic waste be handled? -- Joe Krathwohl via Facebook

A. The environmental impacts of the Tesla gigafactory haven’t been brought up during the incentives debate at the Legislature. It also hasn’t been mentioned in any preliminary documents or reports submitted as part of the Tesla deal. Typically plans for handling industrial waste are usually included as part the zoning and permitting process. Expect Tesla to address these issues as it gets closer to starting construction.