Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, says if Nevada is giving out tax breaks, the state should know what it’s getting for them.
She made the comments following a hearing on Assembly Bill 38, which makes a variety of changes to the process of awarding tax abatements.
Kirkpatrick said there have been serious questions about some of those abatements granted by local officials and the Governor’s Office of Economic Development.
“Like the Apple project, maybe once it’s built people will feel more comfortable about it, but to folks in Southern Nevada that was a big give,” she said referring to the $89 million total tax breaks granted Apple by Reno, Washoe County and the state.
Kirkpatrick said the problem is the state has never had standards for handing out tax abatements.
“They don’t need lifetime abatements,” she said. “We want to make sure we don’t give away the farm. There has to be a return on investment.”
Kirkpatrick said AB38 and AB333 attempt to put standards in place to report what the state receives in return for the abatements, for example, jobs generated.
AB333 also requires a periodic analysis by economic development and energy officials of the costs and benefits of an approved abatement.
AB38 changes requirements for spending on property and equipment by companies seeking tax breaks and mandates they retain the property for at least the five-year duration of the deferred taxes. It changes the number of employees required to get an abatement and makes a number of other changes to the current process.
She pointed to a North Las Vegas solar company that received abatements but later went bankrupt.
“It’s all about transparency,” she said.