Faraday special session likely to go until Friday
The Nevada Legislature convened in special session Wednesday evening to consider three bills that will implement the deal bringing electric carmaker Faraday Future to North Las Vegas.
Gov. Brian Sandoval called the 29th special session shortly before 9 p.m. Tuesday, limiting the business to the Faraday deal.
But since the time between the proclamation and the opening of the session was less than 24 hours, the bills to accomplish the $1 billion deal weren’t out of bill drafting when lawmakers opened for business.
Partly because of that, Senate Majority Leader Michael Roberson, R-Las Vegas, said he expected the special session to take until midday Friday. Assembly Speaker John Hambrick, R-Las Vegas, made the same statement to his Southern Nevada members recommending they book flights home Friday evening.
After introducing two bills Wednesday night, lawmakers adjourned for the night and went to their respective caucuses to review the plan in detail.
Roberson said the Senate committee of the whole would convene at 10 a.m. today to hear testimony on the Senate Bill 1, the commerce bill, and act on it. Hambrick said the Assembly would convene in a committee of the whole at 9:30 a.m. today.
The deal presented last week includes some $215 million in tax breaks, incentives and other benefits to Faraday in return for building a $1 billion auto manufacturing plant at Apex, an undeveloped industrial center at the edge of North Las Vegas. In addition, it commits the state to build some $120 million in infrastructure improvements needed to make the site viable. That includes a freeway interchange into the site, gas, water and electric utilities. The total state benefit to the plant comes to $335 million.
It is contained in three bills. The first half of the Senate bill mirrors the legislation implementing the Tesla deal, changing the thresholds to qualify for those tax breaks and incentives so they can be claimed by Faraday. Tesla, for example, had to reach $3.5 billion in investment to get those incentives. Faraday, a smaller project, will only need to spend $1 billion under the new legislation.
It also includes creation of a trust account to hold the tax and incentives funding until Faraday meets certain conditions to qualify for release of the funds.
It is the rest of that bill that took the most time in drafting. It creates special assessment districts and tax increment areas to generate a revenue stream that will support General Obligation bonds to pay for infrastructure projects.
Assembly Bill 1, introduced Wednesday, is the workforce bill that directs GOED to provide customized workforce series to fit Faraday’s needs. It moves STEM (Science Technology Engineering and Math training) funding to an account that can be accessed to provide training for Faraday employees. It also moves transferable tax credits from GOED so Faraday can access them.
The deal will reportedly require a third bill for the Assembly to consider dealing with complex and potentially litigious water issues raised by the need to provide service at Apex. That measure was still, reportedly, the subject of some debate among the parties Wednesday night.
Faraday officials say the completed auto plant will employ some 4,500 workers. Building the plant will provide employment for an estimated 3,000 construction workers.
In addition, state officials estimate an additional 9,000 other jobs will be created by the arrival of the plant.
But the Governor’s Office of Economic development estimates the plant will generate some $760 million in revenue to state, local governments and schools over the net 20 years. And they say that over the course of 20 years — the life of some of those tax breaks and incentives — the plant should have a total economic impact of $85 billion in Southern Nevada.
Assembly Democratic Leader Irene Bustamante Adams said Wednesday that without seeing the fine points of the bills, it was too soon to tell whether the deal would sail through the Legislature.
“What we are excited about is the fact that it’s an opportunity to diversify Nevada’s economy,” she said. “Not only from a national scale, but now putting Nevada as a global competitor.”
The Gardena, California-based company has offered few details about its product, but plans to unveil a concept car ahead of the Consumer Electronics Show in Las Vegas in January. It hopes to bring a vehicle to market as early as 2017.
The venture is backed by Jia Yueting, an online video and gadget entrepreneur and founder and CEO of Beijing-based holding company LeTV.
Republican Assemblywoman Robin Titus, who consistently voted against tax incentives during the legislative session this spring, said she was keeping an open mind about the deal but hasn’t been convinced it’s good for the state.
“I think it’s an insult to all the Nevada companies who’ve been here forever without having any incentives,” Titus said. “We know the people who are paying the bills, paying for the rooftops, paying for the schools are all the small businesses.”
Republican Assemblyman Brent Jones said the incentives for big incoming corporations were “a slap in the face” to companies like his water distribution business, but acknowledged the deal would likely pass.
While the governor gets to set the agenda on the special session, some lawmakers want to call themselves into another session on a different topic when this one ends. State Sen. Ruben Kihuen, a Democratic candidate for Congress, is proposing lawmakers ban guns for people on a federal no-fly list, but two-thirds of legislators in both Republican-controlled houses must agree on calling a session to make it happen.
“I don’t believe there’s any chance that two-thirds of us are going to agree to call ourselves together for a particular matter,” said Republican state Sen. James Settelmeyer. “I think it’s, sadly, pandering.”
The Associated Press contributed to this report.