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Legislation inching forward on tax abatements, incentives for Faraday Future

CARSON CITY — A package of bills that will bring electric car maker Faraday Future to Apex in Southern Nevada crawled toward approval Friday in the Nevada Legislature, but the special session to get the $1 billion auto plant deal finalized will continue at least one more day.

Lawmakers got off to a slow start Friday, waiting hours for amendments to measures needed to finalize the deal hammered out over the past year between the car company and Nevada state and local government officials.

Finally, in the early evening, the Senate passed Senate Bill 1, granting tax abatements and incentives to Faraday, sending the measure to the Assembly. The vote was 17-1. The main Faraday bill will now get a full hearing in the Assembly on Saturday.

Meanwhile, the Assembly gave its final OK to the workforce development piece of the package, approving Assembly Bill 1 on a 37-4 vote, sending it to the Senate for review.

Still pending are two additional measures relating to water issues with the Apex industrial site in North Las Vegas. Both were to be introduced in the Senate. One deals with issues related to the Southern Nevada Water Authority. The other will address inter-basin water transfers in the Apex region. Faraday is expected to rely on groundwater until a water pipeline can be constructed to the Apex site.

Senate Majority Leader Michael Roberson, R-Henderson said there was the possibility that the measures would be introduced and heard late Friday.

Earlier in the Senate, some lawmakers wanted clarification in Senate Bill 1 on what types of documents are needed to prove a worker is a Nevada resident. The deal with Faraday requires at least 50 percent of its workers be Nevada residents. The discussion led to yet another amendment to the measure, pushing a final vote back into the evening.

The original bill also was amended to put more responsibility on North Las Vegas to cover bonds for infrastructure projects, something city officials oppose and may try to amend when the bill is heard in the Assembly.

SB1 includes bonding authority of up to $200 million, but only $175 million for any one project. Of the $175 million in bonds for the Faraday project, half of the bond obligation will be paid by property owners at the Apex site through a special improvement district.

The other half will come from a tax incentive area. The idea is that as property values rise with new infrastructure, the portion of increased tax assessments will go toward the bonds.

Language was inserted that makes North Las Vegas liable for more of the burden if revenue from taxing districts fall short of payment obligations. The amended version would tap the city’s uncommitted general fund balance before the state would be on the hook. North Las Vegas officials said they want to be able to keep $50 million in the general fund and will seek to amend the bill when it goes to the Assembly.

The workforce development legislation, AB1, passed out of committee with only a few lawmakers in opposition.

One of those was Assemblyman Ira Hansen, R-Sparks, who questioned whether the training funds should be administered through the Governor’s Office of Economic Development. He noted that similar training programs already exist.

Called Workforce Innovations for the New Nevada (WINN) Fund, the bill would allocate $2.5 million to create a program sufficient to provide training for up to 4,000 automobile assembly workers at the facility. It would train up to 800 workers in any given 12-month period.

Hansen also objected to the rushed nature of the special session, saying he has not had the chance to talk about the policies with his constituents.

But Assembly Majority Leader Paul Anderson, R-Las Vegas, called the measure a great foundation for workforce development that will allow the state to bridge the skills gap currently found in Nevada.

The session has not been without some personal drama. Sen. Kelvin Atkinson, D-Las Vegas, had to leave the building to undergo an appendectomy.

In a Tweet just after 6 p.m., Atkinson wrote, “Doc just came in and confirmed, emergency appendectomy surgery tonight or in the morning! Thx for your prayers, keep them going please.”

The session that was expected to last only two days could even drag into Sunday. But lawmakers are expected to support the package to bring Faraday and its estimated 3 million-square-foot plant that would employ about 4,500 workers to the Apex site.

Dag Reckhorn, Faraday’s vice president of global manufacturing, acknowledged in the announcement of the deal in Las Vegas last week that producing a car from a nonexistent factory within two years is a huge challenge, but he added that the company hopes to break ground in the first quarter of 2016, possibly as early as January.

With the arrival of Faraday employees and an estimated 9,000 indirect jobs — suppliers and additional service industry jobs to support the Faraday increase — the region would experience economic growth of $85 billion over 20 years. The taxes the new arrivals would put into the system should be more than enough to justify the tax breaks Faraday would receive in return. In addition to the anticipated 13,500 permanent jobs there would be about 3,000 construction jobs.

The boost would represent a dramatic turnaround for North Las Vegas, which less than a decade ago was on the verge of financial collapse.

Once the plant has matured, state officials are estimating that there will be an additional $230 million in state general fund revenue, $270 million in local government revenue and $260 million in K-12 education revenue over 20 years.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-687-3901. Find her on Twitter: @SandraChereb. Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801.

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