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 The Senate and Assembly convened separately to hear testimony and
to debate four bills granting tax abatements and other benefits
negotiated by Sandoval and his economic development staff with the
California-based electric car maker founded by billionaire Elon
Musk.
Sandoval, in authorizing the special session in a state on the mend
from what he termed the worst economic crisis in its history, said
the factory would give Nevada the opportunity to attract new types
of business and provide jobs, innovation and new technology.
The governor and his economic team say the package of measures would
generate $100 billion in economic benefits to the state over 20
years, and stimulate a high-tech business climate.
Senate Majority Leader Mo Denis, a Las Vegas Democrat, said one
bill, dealing solely with tax abatements, will be introduced in the
Senate.
The lower chamber was to consider three bills involving reduced
utility rates, letting Tesla sell its car directly to the public,
and eliminating or reducing tax exemptions for other industries to
help pay for the Tesla deal, which overall is valued at an estimated
$1.3 billion.
Denis said he expects the package of bills to be approved, adding
that lawmakers are in agreement with the Republican governor on job
creation efforts.
"It's been bipartisan enough to get to his point," he said.
Musk said last week that the $5 billion lithium-ion battery factory
that Tesla will build with Panasonic Corp in northern Nevada's
Storey County will be the largest in the world once completed, and
is critical to Tesla's goal of mass- producing its next generation
of electric cars within three years.
The session was expected to continue into Thursday.
Skeptics urged lawmakers to proceed slowly. Bob Fulkerson with
Progressive Leadership Alliance of Nevada said he feared the deal
could open the floodgates for other companies seeking similar tax
breaks.
"While some subsidies may be warranted, the deal on the table
appears far too generous and far too risky," Fulkerson told Assembly
members.
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Other opponents said the state should not be picking "winners and
losers" in economic development. Under Sandoval's proposal, the
company would get sales tax exemptions estimated at $725 million
through June 2034 and save more than $300 million in payroll and
other taxes through 2024, according to figures published by the
governor's office.
Tesla also would receive $75 million in tax credits for up to 6,000
jobs created, and $120 million in tax credits for meeting state
investment thresholds of $3.5 billion. The company has said it
expects to spend $10 billion in Nevada.
For its part, Tesla said it would contribute more than $37 million
over five years to Nevada's education system.
The 5-million-square-foot (464,515-square-meter) plant east of Reno
would mean 3,000 construction jobs and 6,500 jobs once in operation.
Studies released by the governor's economic development office
estimated the project would create an additional 16,000 indirect
jobs and boost the region's gross domestic product by 20 percent.
(Reporting by Sandra Chereb; Editing by Cynthia Johnston, Daniel
Wallis, Ken Wills and Eric Walsh)
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