A decade after Tesla megadeal, Storey County recommends state revisit tax break award process

Yahoo

10-03-2025

Storey County Courthouse in Virginia City. (Photo: Sydney Martinez / Travel Nevada)
Storey County officials are urging state lawmakers to mandate that corporations seeking significant tax abatements work with local municipalities to address the impact to public safety services like fire stations and traffic lights.
Senate Bill 69, which the county is sponsoring, would require any companies seeking massive tax abatements enter into agreements to defray the costs of the government-provided services they would require. Currently, no such requirement exists in statute.
Tax abatements for companies in $1 billion category
75% property tax for 10 years
100% local sales/use tax for 15 years
75% modified business tax for 10 years
Tax abatements for companies in $3.5 billion category
100% property tax for 10 years
100% local sales/use tax for 20 years
100% modified business tax for 10 years
The bill would only apply to the state's two largest tax abatement levels — those involving companies pledging more than $1 billion or more than $3.5 billion worth of economic development. These public subsidy packages abate taxes at both the state level (modified business) and the county (property, sales and use) for a decade or longer.
Storey County is home to the Tahoe Reno Industrial Center, commonly referred to as TRIC or TRI-Center. Located approximately 9 miles from Reno, TRIC is home to the only three tax abated projects approved and operating at these levels: Tesla's first gigafactory (approved in 2014), Tesla's second factory (approved in 2023), and a battery recycling facility for Redwood Materials (approved in 2024).
Storey County Manager Austin Osborne, who on Thursday presented the bill to the Senate Committee on Revenue and Economic Development, said that Tesla negotiated 'in good faith.' They voluntarily entered into agreements that included the electric car company assisting in public safety infrastructure needs, including paying for 70% of a 4-mile highway, 85% of a traffic signal, seven sheriffs' trucks, and one quint fire truck. But the state and county shouldn't assume that will always happen.
'If the company doesn't want to negotiate a government services agreement, it could put the county into a bankruptcy situation, or in a very negative fiscal end fund balance situation,' said Osborne.
He added, 'We were lucky. The companies are not mandated to do this government services agreement.'
Storey County Fire Protection District Chief Jeremy Loncar pointed out that large facilities like the factories at TRIC are 'complex, high risk environments.'
'GOED has tied us in and set up meetings with some of the companies so we can at least sit down and talk to them,'Loncar said. 'How generous are they feeling that day? Because there's nothing that actually says you have to help us at all.'
Loncar and Osborne said the fire district and county are barred from levying special improvement district taxes or charging impact fees to support those additional needs.
SB 69 would make any government services agreements between tax abated-companies and local municipalities confidential unless the company willingly approves the disclosure.
The bill would also require the Governor's Office of Economic Development to allow the relevant county, city, and local fire districts to review and weigh in on a tax-abatement application at least 15 days before any public meeting for approval. That would allow those bodies to weigh in on any local impact concerns, said Osborne.
Currently, companies are only required to inform those local bodies they are applying for tax abatements and request a receipt of acknowledgment. Impacted counties are invited to speak during public comment of a GOED board meeting.
Details of tax abatement applications are typically not made public until days before the GOED board meeting where they are voted on. GOED board members have previously said they believe they have no discretion to decline a project if it meets the qualifications set in statute.
Originally, Storey County wanted to add all local representation to the GOED board temporarily when abatement packages are being considered. But Osborne said they plan to remove that provision from their bill.
Osborne emphasized with the Senate committee that Storey County is 'pro-incentive' and considers the state's tax abatement programs 'good for Nevada, despite some challenges.' Storey County, he said, is just now beginning to see the fruits of their investment, as Tesla's 10-year abatements ended last year. The state now expects to receive $12 to $15 million annually.
'(Our bill) doesn't stop economic development,' he said, 'it just puts local jurisdictions at the table.'
The Professional Firefighters of Nevada and the Nevada Association of Counties support the bill.
The Las Vegas Global Economic Alliance and several chambers of commerce are opposed.
LVGEA lobbyist Amber Stidham said the bill forces a statewide 'one size fits all' approach to issues that should be solved at the local level and may create barriers for companies thinking about expanding or relocating into the state.
The City of Fernley, which is located near TRIC but in Lyon County, also opposes the bill. Fernley has been working with GOED and regional economic development offices to boost its own industrial spaces in the area.
'The current process for abatements and attracting businesses has been very successful,' said Fernley lobbyist Mendy Elliott during opposition testimony. 'If it isn't broken, we are trying to understand what Storey County is trying to fix.'
SB 69 as introduced into the Legislature also includes provisions about auditing the equipment inside data centers. Osborne said they plan to amend those sections out of the bill entirely. He told lawmakers that, after conversations with GOED and others about proprietary and potentially sensitive information, they feel they can address existing concerns about these audits administratively instead of through statute.