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Done deal: Sandoval signs record $1.3B tax break package for Tesla

Sandoval

Kyle Roerink

Nevada Gov. Brian Sandoval is shown with state officials and legislators after signing the landmark Tesla legislation during a Capitol ceremony about 10:15 p.m., Thursday, Sept. 11, 2014.

Updated Thursday, Sept. 11, 2014 | 10:25 p.m.

Tesla Special Session Day 2

Nevada Senators Joe Hardy, R-Boulder City, and Barbara Cegavske, R-Las Vegas, react to their final vote during the second day of a special session at the Nevada Legislature, in Carson City, Nev., on Thursday, Sept. 11, 2014. Lawmakers are considering a complex deal to bring Tesla Motors to Nevada. (AP Photo/Cathleen Allison) Launch slideshow »

Seven days and six hours after he proposed giving the biggest tax break in Nevada history to Tesla Motors, Gov. Brian Sandoval signed the deal into law late today.

The $1.3 billion deal will open the door for Tesla to build its lithium-ion battery factory in an industrial park east of Reno. The plant, which will be one of the world's largest buildings at 5.5 million square feet, is forecasted to employ 6,500 people and spark a new generation of companies to offset the decline of gaming in Northern Nevada.

"We made history today," Sandoval said late tonight at a bill signing ceremony in his Capitol office. "We have changed the trajectory of Nevada forever."

To make the deal happen, the Republican governor and his staff steered four bills through the Democrat-controlled Legislature over two days of a special session, the 28th in Nevada's 150-year history.

The governor faced pushback from Clark County Democrats who wanted more support for public schools and a film tax credit to lure productions to Las Vegas. Conservative, liberal and watchdog groups also spoke out against the deal as too generous and too risky. But none of those questions slowed the momentum pushing the Tesla bills to the governor's desk.

When it came to the most important legislation, Senate Bill 1, the votes were unanimous. The Senate approved it 21-0 and the Assembly 39-0.

The final of four bills passed the Assembly and ended the session a little after 9 p.m. Sandoval signed the bills during a Capitol ceremony about 10:15 p.m., capping a bidding war with four other states that lasted nearly a year.

“We can do great things when we work together," said Speaker Marilyn Kirkpatrick, a North Las Vegas Democrat.

The Senate made only two minor changes to Sandoval's proposals.

Senators clarified that Tesla must offer its employees health insurance. It also boosted the oversight of Tesla if the state waives the requirement that the company hire 50 percent of its workforce from Nevada.

Tesla's tax break is 15 times bigger than any previous deal in Nevada history. It provides a 100 percent abatement of the sales tax on equipment for 20 years; a 100 percent on the real and personal property for 10 years; and tax credits totaling $195 million.

AFTERNOON UPDATES

The Senate passed Senate Bill 1, the major bill in the Tesla tax incentive package, just before 6 p.m. today. The vote was 21-0 and the bill will now be sent to the Assembly for its vote.

The Senate also passed two Assembly bills after both had cleared the Assembly earlier in the day. The Senate vote was 21-0 on each bill. Assembly Bill 1 would provide cheaper electricity rates for Tesla. Assembly Bill 3 would cut a tax credit for insurance companies and redirect the credits to Tesla. The bills need Senate approval before heading to Sandoval's desk for a signature. See a full annotation of the bills.

MORNING UPDATES

The Senate started debating Senate Bill 1, which covers the heart of the Tesla deal, about 9:30 a.m. Watch the Senate debate live and check out the Senate exhibits. Conor Shine annotated Senate Bill 1 this morning. Anjeanette Damon of the Reno Gazette-Journal broke down the bill's details late last night.

The Assembly voted 39-0 to pass two bills around 11:30 a.m. this morning.

Protests over film tax credit cuts dying down: On Wednesday, Senate Democrats protested Sandoval's proposal to cut the state's film tax credit from $80 million to $70 million Sandoval declined to restore the cuts. IATSE Local 720, the union representing Las Vegas entertainment leaders, rallied against the cuts on Wednesday, too. But the union's lobbyist today backed off, asking the Senate to consider reviving the credit in the 2015 Legislature. Governing magazine today reported that states are starting to walk away from film credits.

After seeing Senate bill, labor leader plans to lobby for higher construction wages, local workers: Danny Thompson, executive director of the Nevada State AFL-CIO, balked because Senate Bill 1 lacks a requirement that Tesla Motors' battery factory pay a higher hourly rate, known as the state-set prevailing wage for public projects. The bill requires that 50 percent of construction workers and the employees be Nevadans. But Thompson also worried that Tesla could bring in out-of-state workers who could easily get a driver’s license to meet the qualifications. Thompson said he’s going to be “the fly in the ointment” in the Senate debate today.

DAY ONE COVERAGE

Read our live day one coverage, check out our first day recap and ask us any questions you have on the deal.

Visit our Tesla home page for complete coverage. Reporters Kyle Roerink and Cy Ryan and the Reno Gazette-Journal contributed to this report.

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