Nevada Supreme Court hears arguments in challenge to Catalyst Fund

The Nevada Supreme Court on Tuesday heard arguments in the lawsuit challenging the constitutionality of the state’s Catalyst Fund.

The suit argues the fund violates the state constitution, which prohibits giving public money to private businesses. Some 17 businesses have received cash from the fund through the Governor’s Office of Economic Development.

But before the court can get to that issue, the high court must rule on whether Michael Little, a citizen taxpayer, has the standing to make that challenge.

Nevada is one of the states that has, in the past, followed the rules that typically prohibit taxpayers from making such challenges unless they are competitors of the businesses getting the grants.

The district court agreed with the Legislative Counsel Bureau Little didn’t have the standing to challenge the application of the Catalyst Fund and LCB chief litigator Kevin Powers said that was the correct ruling.

Powers asked the high court to follow the federal guidelines and rule Little is too remote from the use of the money to claim injury and therefore has no standing.

Noting the rules are different for municipalities where taxpayers can claim standing to challenge an ordinance, Justices Jim Hardesty and Kris Pickering asked why that wouldn’t apply in this case. Hardesty said the Catalyst Fund cash is funneled through the local governments where the businesses seeking a grant are located.

Powers said because the lawsuit didn’t tie the argument to the municipal standing rules, they can’t now make that argument.

The lawsuit was filed on behalf of Little by the Nevada Policy Research Institute. NPRI counsel Joseph Becker charges because GOED decides which businesses get the money and how much, the state is in fact giving money to private businesses in violation of the Nevada Constitution. Specifically, the case objects to the $400,000 annual grants to SolarCity.

Becker said the Catalyst grant shows the danger to Nevada taxpayers because, since the Public Utilities Commission changed the net metering rules, SolarCity has decided to leave the state rather than do business here.

The court took the case under submission.