by April Corbin Girnus, Nevada Current
Despite many lawmakers starting off this year’s legislative session with the bad taste of Tesla in their mouths, efforts to rein in the executive branch agency that currently has the power to unilaterally approve hundreds of millions of dollars worth of tax abatements without input from elected officials fell short.
Instead, the scope of the Governor’s Office of Economic Development (GOED) will expand with a new division and saw success in legislation designed to streamline its processes.
Senate Bill 181, which passed the Legislature with bipartisan support and was signed by Gov. Joe Lombardo, changed the threshold of what the GOED’s executive director can approve directly — from $250,000 to $500,000. Proponents of the bill, including state Sen. Julia Pazina (D-Las Vegas) and three Republicans cosponsors, said it would speed up the process, potentially by up to three months, and help businesses relocate or expand more quickly.
Abatement packages totaling more than $500,000 will still have to be approved by the GOED board, which includes the governor, secretary of state and several people appointed from the private sector. Notably, several members have characterized their role as being obligated to approve any company that promises to meet the requirements set in statute.
There remains no limit to the amount of potential tax abatements GOED can approve.
In March, the GOED board approved an estimated $330 million in tax abatements for Tesla to expand its manufacturing campus in Northern Nevada. Legislators had no authority or opportunity to weigh in, despite the package being the third highest public assistance package in state history — behind the $1.2 billion sweetheart deal in 2014 for Tesla and the $750 million deal in 2016 for what would become Allegiant Stadium. The details of the assistance package became public just three days before the meeting for approval, leaving little time for vetting or public discussion.
State Sen. Dina Neal (D-North Las Vegas), who chairs the Senate Revenue Committee, was the most outspoken lawmaker when details emerged of what’s now sometimes referred to as the “Tesla 2” deal. She publicly called for the GOED board to delay the vote, and for tax abatement powers to return to elected officials. Senate Majority Leader Nicole Cannizzaro, through a spokesperson, said she agreed with Neal “that more transparency is needed.”
Mid-session, Neal brought forth Senate Bill 396 — originally introduced as a proposal for raising property taxes to fund education but later gutted and replaced with a proposal to limit the direct abatement powers of GOED to just $500,000 per company.
That proposal was received warmly in the Senate and even garnered support from one Republican — state Sen. Ira Hansen of Sparks, who argued the state is subsidizing large corporations at the expense of small businesses. However, at a subsequent Assembly committee hearing, Neal called her bill “totally unworkable” and described it as a conversation starter. She urged the Assembly committee to work with her to amend the bill to something they deemed appropriate.
No such amendment ever came, and SB 396 quietly died after failing to meet a legislative deadline.
New requirements, opportunities for GOED
Sponsored by state Sen. Edgar Flores (D-Las Vegas), Senate Bill 429 tied tax abatements to paid family and medical leave. The bill would have required companies receiving tax abatements through GOED to offer employees paid leave of at least 50% of their wage to employees who had worked there for at least a year. It would have only applied to companies with more than 50 employees.
Flores described the bill as “pro-family and pro-business” and received bipartisan support in the Senate, with Republicans Carrie Buck, Pete Goicochea, Scott Hammond and Heidi Seevers Gansert voting with Democrats to pass the bill 17-4. In the Assembly, support fell on party lines, with all Republicans opposing.
Lombardo vetoed the bill, arguing in his veto letter that a paid family medical leave requirement would impede the state’s ability to attract businesses. His reasoning mirrored those put forth by GOED and the state’s regional development authorities when the bill was being considered.
The failed legislation was resurrected — in the form of an amendment to a heavily negotiated Oakland Athletics stadium bill passed during a special session held just days after the conclusion of the 2023 regular session. Flores voted for the $360 million public assistance package for the stadium.
Assembly Bill 77, sponsored by Assembly Speaker Steve Yeager, creates within GOED an Office of Entrepreneurship. The new office, which was also approved for two new staff positions, is tasked with strengthening policies and programs to support entrepreneurship within the state.
Assembly Bill 261, sponsored by the Assembly Committee on Natural Resources, requires GOED to includes in its State Plan for Economic Development a statement about “the manner in which this state can maximize the efficient use of the water resources of this state.” The bill also requires the regional development authorities for Clark and Washoe counties to include in their recruiting and marketing efforts “strategies to encourage the conservation of the water resources of this state.”
