Conservative group sues Nevada over $10 million Catalyst Fund

CARSON CITY — A conservative think tank filed a lawsuit Wednesday to stop the governor’s economic development office from divvying up a $10 million Catalyst Fund to private companies opening businesses in the state.

Joseph Becker, a lawyer representing the Nevada Policy Research Institute, said the state constitution specifically states that Nevada “shall not donate or loan money” to any companies or corporations except those formed for educational or charitable purposes.

The Catalyst Fund was one of Gov. Brian Sandoval’s key initiatives during the 2011 Legislature to bring business to the state.

The first money for the fund wasn’t appropriated until the 2013 legislative session. Rather than direct grants, the state for years has offered tax breaks to private business, including $89 million in tax incentives for Apple to build a “cloud center” in Reno. Legislators in 2013 approved giving $20 million in tax incentives to companies that make movies in the state.

Becker said the state cannot “pick winners or losers” by subsidizing its favored companies and that three times voters in Nevada have turned down ballot questions to allow the state to give money to private companies.

He filed the lawsuit in District Court in Carson City on behalf of Michael Little, son of former Assemblywoman Pat Little, D-North Las Vegas.

Little said he is trying to raise capital for an energy company and said he cannot compete on an even ground when the state has awarded $1.2 million to SolarCity, a similar company. Little, however, acknowledged he never requested an economic development grant.

Becker is the chief legal officer lawyer for NPRI’s Center for Justice and Constitutional Litigation. The Las Vegas-based institute advocates for conservative, free-market stances on issues.

In a news conference, Becker said the economic development office and its director, Steve Hill, have been trying to get around the constitution by picking companies to award grants and then sending the money to public subdivisions such as Las Vegas, which in turn gives the money to the winning company.

That is a sneaky way to get around the constitution, he said, noting it should be considered unconstitutional.

Requests for comments were not immediately returned by the governor’s office and economic development office.

Becker said he doesn’t think SolarCity has received any money, but all companies awarded grants likely will get the money in the next couple of months. He added that the economic development office repeatedly has denied NPRI access to information about the grants.