Bill to draw racing teams OK’d

Wednesday, May 9, 2001 | 10:14 a.m.

CARSON CITY -- A potential tax break that could save a professional auto racing team from $200,000 to $400,000 a year on engines and chassis purchases was unanimously approved by the Senate Taxation Committee Tuesday.

Backers of Assembly Bill 657, including five-time National Hot Rod Association champion Kenny Bernstein, said the tax exemption and the warm weather would lure teams to locate in Las Vegas, bringing high-paying jobs, promoting tourism and providing opportunities for those studying auto mechanics.

Joseph Heitzler, president of Championship Auto Racing Teams (CART), said in a letter to the committee he would "seriously consider" moving his series' headquarters from Troy, Mich., to Las Vegas if the tax exemption was passed. CART has 132 employees with average wages of $80,000 per worker.

Bernstein has two teams -- one in California and one in Indiana -- and he suggested he would move the Indiana team to Las Vegas. The average salary of his team members is $70,000, he said.

The bill would reduce the sales tax rate that goes to local governments and school districts, which ranges from 4.5 percent to 5 percent, depending on the county. To reduce the state's portion of the sales tax, which is 2 percent, voters would have to approve it in the November 2002 election.

Joe Brown, a Las Vegas lawyer representing the publicly traded Speedway Motorsports, Inc., said the tax exemption could mean a "major influx of racing teams" to Nevada from Indiana, Arizona and California.

John Force, a 10-time NHRA Winston Drag Racing champion and owner of a three-car NHRA team who testified earlier before the committee, said he would consider moving his racing operation to Nevada if the tax exemption was passed.

"I'm based in California but, financially, it's killing us," Force told the Sun. "Would I consider going there? Yes, I would. I like Las Vegas -- everybody likes Las Vegas. I like a number of places but I'm going to go where I can save maybe a half a million dollars."

Chris Powell, general manager of Las Vegas Motor Speedway, said he is negotiating to bring a CART race to Southern Nevada and estimated it could draw 100,000 people to the area. At the NASCAR Winston Cup race at LVMS in March, there were 125,000 spectators that had a $124 million impact on the economy, he said.

Powell added that there are 15 CART races in the United States and 7 overseas every year and that the races are televised all over the world.

Sen. Joe Neal, D-North Las Vegas, was the only skeptical member of the committee.

"Show me the money," Neal told supporters of the bill. He wanted to know how much this would mean to the state.

Neal said he usually opposes tax exemptions because it takes away money from school children. But since this is going on the ballot, he will leave it up to the voters to decide.

But Sen. Randolph Townsend, R-Reno, a former racecar driver, said these racing teams are huge corporations and will bring benefits to the state.

Dean Paul Pate of the Community College of Southern Nevada at the Cheyenne Campus, said there are 600 students presently enrolled in the automotive programs. The advent of these racing teams to Nevada would be a "fantastic opportunity for the students."

It would be a "dream job" for students to be part of a race team, Pate said, and it would mean that these teams would donate equipment to the school.

Supporters included Lt. Gov. Lorraine Hunt, chairwoman of both the state Tourism Commission and the Economic Development Commission. It would mean more diversification for Nevada's economy, she said. Bob Shriver, director of the state Economic Development Commission, said the advent of CART and professional race teams would mean new money circulating in Las Vegas and "create spin-off opportunities."

The bill now goes to the floor of the Senate for final legislative action. That could come late this week or early next week.