Las Vegas Sun

March 28, 2024

Bill would eliminate insurance subsidy to offset Tesla tax breaks

Tesla Special Session Sept. 11, 2014

Cathleen Allison / AP

From left, Nevada Assembly members Jason Frierson, D-Las Vegas, Ira Hansen, R-Sparks, David Bobzien, D-Reno, and Maggie Carlton, D-Las Vegas, talk on the Assembly floor during the second day of a special session at the Nevada Legislature, Thursday, Sept. 11, 2014, in Carson City, Nev. Lawmakers are considering an unprecedented package of up to $1.3 billion in incentives to bring Tesla Motors’ $5 billion battery factory to the state.

Tesla Special Session Sept. 11, 2014

Steve Hill, with the Governor's Office of Economic Development, second from right, answers questions on the Senate floor during the second day of a special session at the Nevada Legislature, Thursday, Sept. 11, 2014,  in Carson City, Nev.  Lawmakers are  considering an unprecedented package of up to $1.3 billion in incentives to bring Tesla Motors' $5 billion battery factory to the state. Launch slideshow »

CARSON CITY — The Assembly today passed the first bill of a special session of the Legislature on a 39-0 vote to eventually eliminate a tax benefit for insurance companies based in Nevada.

The money saved would go to the state’s general fund to offset some $1.3 billion tax incentives proposed for Tesla, which is planning to build a massive battery manufacturing plant in Northern Nevada.

Assembly Bill 3 now goes to the Senate, which is debating omnibus tax credit and abatement legislation for Tesla.

The Assembly also passed Assembly Bill 1 to allow Tesla to pay a reduced rate on its electric bills. The vote was 39-0.

Under present law, insurance companies that have their home office in Nevada get a yearly subsidy that amounted to $27 million last year. There were 12 companies that qualified.

Assembly Bill 3 would reduce that amount to $5 million a year, and the subsidy would be wiped out in 2021.

The tax break for the Nevada-based insurance companies was enacted 43 years ago and was aimed at drawing the headquarters of these businesses to Nevada. But it has since turned into a subsidy, said Steve Hill, administrator of the Governor’s Office of Economic Development.

Assembly Biull 1, the second bill passed by the Assembly, would allow Tesla to enjoy lower power rates at its proposed plant in Storey County.

The incentive is already in the law but was due to expire in four years. Lawmakers voted to extend it to eight years.

The bill allows Tesla to save 30 percent on its power bills for two years, 20 percent for the next four years and 10 percent for the final two years.

It also now goes to the Senate for consideration.

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