Massive clean energy bill expanding transmission, electric car charging stations gets first hearing; resorts opposed

Heralded as a transformative step to move Nevada toward greatly reduced carbon emissions through massive expansions in transmission and electric vehicle infrastructure, state lawmakers heard the first details of the legislative session’s biggest energy policy bill with just two weeks to go before the end of session.

Sponsored by Sen. Chris Brooks (D-Las Vegas), SB448 would expand the state’s transmission infrastructure in line with NV Energy’s multibillion-dollar Greenlink Nevada initiative, along with requiring a $100 million investment in electric vehicle charging stations, expanding rooftop solar to multi-tenant and commercial buildings and proposing a host of other measures aimed at lowering carbon emissions and building up renewable energy infrastructure.

During the bill’s first multi-hour hearing on Monday in the Senate Growth and Infrastructure Committee, lawmakers and clean energy advocates were not shy about pouring praise on the legislation — ranging from NV Energy CEO Doug Cannon saying the bill “positions Nevada as energy leader in the western United States for decades to come” to Governor’s Office of Economic Development Director Michael Brown saying “448 will be one of those bill numbers that lives beyond legislative sessions.”

Support was not unanimous — several progressive and environmental groups warned that a large infrastructure project could harm fragile ecosystems, and the politically powerful Nevada Resort Association (which represents many casino resorts that have left regular utility service but remain as transmission-only customers) testified in opposition, wanting the state’s Public Utilities Commission to have more authority over the transmission build-out.

Brooks, who sponsored legislation raising the state’s Renewable Portfolio Standard in 2019 and 2017, said those bills and past efforts were helpful first steps but that this legislation represented an attempt to “take a more holistic approach at carbon reduction planning for the electricity sector.”

“Imagine a world where in Nevada, we are making most of our own electricity with renewable resources, we're putting them in our vehicles, and we're driving our vehicles,” he said. “That closes the loop and keeps billions of dollars in our economy, and also makes it far more affordable for the individual who's driving the electric vehicle.”

SB448 has two main prongs — transmission and electric vehicle charging infrastructure.

The transmission portions would help finish NV Energy’s proposed “Greenlink” transmission plan, which received initial, partial approval from the state Public Utilities Commission in March. The project would build two major transmission lines aimed at forming a “transmission triangle,” expanding and linking the current 235-mile, 500 megawatt “One Nevada Transmission Line” that links Northern and Southern Nevada. 

Brooks said expanded transmission capacity would not only build up grid resiliency beyond the current One Nevada line — pointing at the 2021 Texas electricity crisis as a warning — but would also allow Nevada to more cheaply import renewable energy produced in other states and help diversify the current fuel mix.

“If we just connect the dots with a few transmission lines, we could realize that economic opportunity of being the hub of the western grid, and we could realize the benefits that come with all of that energy that we can export and all that energy that we move through our state,” Brooks said. “The benefits are billions of dollars of economic activity in our state and billions of dollars of private investment in our state and renewable energy projects.”

The other major portion of the bill would require NV Energy to propose and submit a $100 million spending plan for electric vehicle charging station infrastructure over the next two years, with a strong focus on historically underserved areas, outdoor recreation, transit agencies and fleet upgrades for state, local and federal governments.

Much of the three-hour hearing focused on the transmission aspects — a wide variety of groups testified in support including IBEW; businesses including Google, Ikea, Patagonia and Uber; Battle Born Progress and clean energy development groups including the Natural Resources Defense Council, Southwest Energy Efficiency Project, Nevada Conservation League and others.

Brown, who heads the state’s economic development arm, said corporations in and considering moving to Nevada were increasingly focused on renewable energy and meeting environmental goals, giving the state a potential leg up on business development if it further committed to renewable resources.

“For the first time, we sat with a manufacturer from the Midwest a few weeks ago, and they looked at us and the first question they had for us is they wanted to talk about renewable energy,” he said. “They wanted to know how we were producing it, how it was transmitted, what the prices were. That's a game changer. We've not had that before.”

Cannon, who helped present the bill, said completion of the Greenlink project would help create a “path forward for us to economically achieve the state's net zero carbon goals,” while opening up new areas for solar and renewable energy development currently cut off from transmission lines.

“We can produce energy in a lot of places in Nevada, but that doesn't do us any good if we can't get that energy from where it's produced to where it needs to be utilized,” Cannon said. “Transmission becomes the backbone that is necessary to fully utilize that energy.”

But that proposed infrastructure expansion attracted opposition from spokesmen for environmental groups including Basin and Range Watch and the Center for Biological Diversity who said they had strong concerns that the legislation allowed NV Energy to rush forward without enough time for environmental review or potential impacts.

“Instead of instructing state agencies to complete a clear-eyed, comprehensive review of where renewable energy might be appropriate in this state, SB448 would throw open the doors to our most wild and pristine landscapes and rely on the tender mercies of the market and fossil fuel companies like NV Energy to decide the fate of Nevada’s wildlands,” Center for Biological Diversity State Director Patrick Donnelly said.

Sen. Dallas Harris (D-Las Vegas), a former administrative attorney at the PUC, asked what would happen if the promised economic benefits don’t materialize — and how much risk was being shouldered by ratepayers.

Cannon responded that the Greenlink plan was “not a risk-free proposition,” but said the utility was prepared to move forward with the $2.5 billion infrastructure project immediately, noting that customers would not have to start paying for the project for several years and that any proposal by the utility would go through a contested hearing process before the PUC and ultimately have to be approved by the commission.

“There is no guarantee in this legislation that we will recover the dollars of this investment,” he said. “There's not. We have to proceed reasonably, and then we'll trust in the process on the back end that we have the opportunity to recover our investment and earn a reasonable return. It's kind of the regulatory compact that exists between the utility as a private entity and the state.”

But the proposed process in the bill attracted opposition from the Nevada Resort Association —  lobbyist Laura Granier said the group was in “technical opposition” because of the complexity of a bill introduced with only two weeks left in the legislative session. She said the association had proposed “clarifying changes” to the bill that would not affect the timeline but would ensure that the PUC “retains authority and regulatory discretion to protect customers from increased rates and making projects more expensive than they need to be.”

“The Commission needs the tools to keep an eye on that,” she said. “We're not saying that they shouldn't earn their return on investment, they should, but through the (Integrated Resource Planning) process they do get to recover costs.”

Both Brooks and Cannon said the bill would not have a sizable impact on utility customers — Brooks pointed to a slide showing the adoption of renewable energy increasing while average electric prices in the state had gone down. Cannon added that opening up transmission markets would help the state access lower-cost power from other areas, and that ratepayers wouldn’t see the cost of the expanded infrastructure until five or six years down the road.

NV Energy, in a filing submitted to the PUC as part of the initial Greenlink filing last month, estimated that customers in nearly all rate classes would see higher base power prices to help pay off the expansion of power lines. Cannon and others said in a previous forum on the bill that those estimates do not include potential benefits from increased transmission access.

Beyond transmission and electric vehicle charging, the bill also creates a Regional Transmission Coordination Task Force, a group of public and private industry officials tasked with helping the governor and Legislature determine the steps needed to join a western states regional transmission organization — an entity that coordinates, controls and monitors a multi-state electric grid. The legislation requires Nevada to join a regional transmission organization (RTO) by 2030, with options for the PUC to delay or waive the requirement.

The bill would also double an energy efficiency initiative for low-income customers from five to 10 percent of the utility’s overall energy efficiency plan, expand a state Renewable Energy Tax Abatement program to cover energy storage projects, reopen a discounted energy rate program that expired at the end of 2017 and require NV Energy to begin including a low carbon dioxide emission reduction plan in its triennial integrated resource plan.

State occupational boards resist push for greater executive branch oversight

A legislative attempt to establish a state Division of Occupational Licensing brought together practitioners of oriental medicine, athletic trainers and cosmetologists on Thursday — all of whom oppose greater executive branch oversight.

The push to create the division builds off of a critical state audit from 2019 that called for greater oversight of the boards, and the effort comes after both Gov. Steve Sisolak and former Gov. Brian Sandoval previously raised issues with the independence and noncompliance of the occupational licensing boards.

The bill, SB335, would abolish five different occupational licensing boards — the Board of Homeopathic Medical Examiners, State Board of Oriental Medicine, State Board of Athletic Trainers, State Board of Massage Therapists and Board of Dental Examiners of Nevada — and bring those groups under the regulatory authority of a new division within the Department of Business and Industry. Combined, the five boards control more than 11,000 licenses across the state.

The bill would also allow for the appointment of advisory boards to assist in oversight of the occupations licensed by the division, including dentists, homeopathic medical examiners and athletic trainers. At least one member of the advisory board would have to hold a license in that profession, though the bill does not require any advisory boards to be appointed.

Opponents of the bill raised concerns that it would interfere with the practice of alternative medicine in the state, as the majority of those who testified in opposition during the hearing of the bill were members of the Oriental medicine board or advocates of homeopathic medicine. Oriental and homeopathic medicine can involve treatments such as acupuncture and herbal medicine.

“Abolishing the board and subsuming alternative medicine to allopathic medicine runs the risk of diluting the independence and legitimate effectiveness of this profession,” Lisa Grant, secretary-treasurer of the Oriental medicine board, said during the hearing.

Others in opposition expressed concerns that the new division would create unnecessary government oversight beyond the work of the Sunset Subcommittee, which reviews each state board and commission during the legislative interim and recommends which should be retired. And some bill opponents simply voiced general dismay.

“The board of athletic training recently progressed through the Sunset Subcommittee with a positive review,” Tedd Girouard, chair of the athletic trainers board, said during the hearing. “We are concerned that our board has been unjustly and unfairly, I guess, put into this situation to be abolished, and really don't understand what the metrics were that put us… in this bucket.”

Despite an overwhelming negative response to the bill — of 289 opinions filed on the bill so far, 284 are in opposition — the movement to overhaul the state’s occupational board system has been several years in the making. 

In 2017, Sen. Keith Pickard (R-Henderson) sponsored a bill that he said during the Thursday hearing was aimed at addressing some of the “procedural and structural problems” of the occupational licensing boards. And a 2018 audit found that more than half of the boards were ignoring a 2010 directive on salary caps for state employees.

During the hearing, the bill’s sponsor, Sen. Joe Hardy (R-Boulder City), who also serves as a physician licensed by the state medical board, said the measure was aimed at ensuring that medical boards and practitioners within the state are adhering to the standards of care and are showing integrity.

The bill was primarily supported by members of the Nevada Dental Association, a branch of the American Dental Association that advocates for oral health care. In recent years, the state’s dental board, which licenses the dentists in the association, has dealt with resignations amid criticism from the governor, on top of issues with board operations and conflicts of interest that were revealed through a state audit. 

“As many members of this committee are aware, the Nevada dental licensing board has had a history fraught with controversy and abuses,” Eddie Ableser, a lobbyist for the association, said during the hearing. “And the Nevada Dental Association stands with the efforts to change and reform boards across the state.”

Michael Brown, executive director of the Governor’s Office of Economic Development, explained that he and Terry Reynolds, director of the state’s business department, learned a lot from Utah’s occupational licensing division that informed the decision-making on introducing a similar division in Nevada.

Brown said that Utah has been able to reduce licensing barriers through the division, making it easier for professionals from other states to receive a license in a reasonable amount of time.

Previous attempts to overhaul the occupational boards have noted the potential high cost for establishing new oversight measures, such as the Division of Occupational Licensing, but no agency has yet submitted a fiscal note with an estimated price tag for the bill.

The measure does, however, call for 5 percent of fees received by various boards in the state — including the Board of Medical Examiners, State Board of Nursing and other health care licensing boards — to be deposited into an Occupational Licensing Account that would be used to fund the activities of the division.

Members of several boards that would not be abolished by the bill, including the Chiropractic Physicians' Board of Nevada and the Board of Osteopathic Medicine, testified in neutral during the hearing, calling for more conversations between the stakeholders and the sponsor of the bill.

“[The department’s] mission is the promotion of business and industry, which we are concerned might actually cause a lessening of consumer protection for Nevada's patients,” said Dan Musgrove, a lobbyist for the chiropractic board.

Thursday’s meeting marked the first hearing for the bill. The committee did not hold a vote on the measure.

Correction: This story has been updated at 3:35 p.m. on Friday, April 2 to reflect that the Board of Homeopathic Medical Examiners did not testify in opposition to the bill and did testify in neutral.

Sisolak's office answers questions about relationship with company that lobbied administration to push Innovation Zones legislation

Earlier this month, Jeff Berns, the CEO of Blockchains LLC, a tech company that is pushing an ambitious legislative proposal to create a new type of local government outside Reno, said he pitched Gov. Steve Sisolak on the idea after developing a “friendship” with the Democratic governor. 

But since the interview in early March, the governor’s office stonewalled or provided non-answers to The Nevada Independent about Sisolak’s relationship with Berns and meetings with the company, which hired his wife’s economic consulting firm, Hobbs, Ong & Associates. 

Not until this week, nearly three weeks after The Nevada Independent began asking questions, did the governor’s office address the relationships that intersect with Blockchains’ proposal, a massive project that is being cast as an important part of the state’s post-pandemic economic strategy. 

In addition to meeting with the governor last year, the company donated $10,000 to Sisolak’s 2018 campaign and $50,000 to a political action committee affiliated with Sisolak in 2019. 

Sisolak spokesperson Meghin Delaney said in an email Wednesday that “campaign contributions have no bearing on decisions the governor makes. Since taking office, the governor's decision-making is focused on what is best for the state and for its residents, regardless of where the ideas come from.”

When asked about Berns’ characterization of a “friendship” with Sisolak, Delaney wrote in an email on Monday, nearly three weeks after The Nevada Independent first asked: “Jeff and the governor share common goals for the State including responsible and impactful economic diversification, workforce expansion and development, and protection of natural resources.” 

The governor’s office did not provide more information about the relationship or answer a question about how many times Berns and Sisolak met last year. 

But Delaney said on Wednesday that “one of the governor's top priorities is to recover our economy and develop our workforce, and his door will always be open to any private sector leader or CEO who is looking to expand their business, relocate to the state, and most importantly, create jobs for Nevadans.” 

Delaney added that “it is common practice in Nevada and every other state in the country for private sector leaders to bring proposals to state and local governments.”

She stressed that the governor and First Lady Kathy Sisolak, who is a director at Hobbs, Ong & Associates, do not discuss state issues that the firm might be involved with. The firm worked on an economic impact report for the project, along with Applied Analysis, another consulting firm, and did so “independent from the governor’s office,” Delaney said in a statement on Monday.

The first lady, in an email Tuesday, said the firm “has a policy of segregating work assignments to ensure that I am not engaged in any work performed for the State of Nevada.”

With Blockchains, Sisolak added, the firm’s work was conducted without her involvement. She said that she never discussed the proposal with the governor, and the firm did not brief the state. 

Blockchains owns about 67,000 acres of land in and around the Tahoe Reno Industrial Center, home to the Tesla Gigafactory and other large-scale operations, east of Reno. The company, with Sisolak’s backing, is seeking legislation that would allow it to break away from an existing county government and create a new type of local government, known as an “Innovation Zone.” The company said such a move was necessary to develop a “smart city” of about 36,000 residents.

In the early part of 2020, as the COVID-19 pandemic hit, Berns said that Sisolak approached him about serving on a committee working to acquire personal protective equipment. Berns said he declined and recalled telling the governor that he would begin developing a concept that might bring more revenue to the state. That concept turned into the proposal for Innovation Zones. 

Berns said that he presented the concept to the governor around Labor Day. In January, Sisolak included a line in his State of the State speech touting the proposal and Blockchains LLC.

“Following the passage of my Innovation Zone legislation,” Sisolak said, “Blockchains LLC has committed to make an unprecedented investment in our state to create a smart city in northern Nevada that would fully run on blockchain technology — making Nevada the epicenter of this emerging industry and creating the high-paying jobs and revenue that go with it.”

The governor’s office has not provided a timeline of the events that led to that proposal.

On Monday, Delaney said the proposal was “the product of months of extensive analysis of the economic impact of a smart city developed using blockchain technology, review of different types of political subdivisions around the country and globally to find an optimal model for its development, and evaluation of the benefits and challenges surrounding its creation.”

Jeremy Aguero, a principal analyst with Applied Analysis, the firm that assessed the economic impact of Blockchains’ proposal, said he attended multiple meetings last year with state officials. The governor, he said, was not present during the early meetings. Throughout the process last year, the proposal was fleshed out and refined as questions about Innovation Zones arose. 

When the state unveiled the proposal to the public at a roundtable in February, Sisolak was joined by Michael Brown, who leads the Governor’s Office of Economic Development, and Aguero. Since then, the administration has provided little information about the proposal.

On MSNBC Sunday evening, Sisolak was asked about the proposal. 

Sisolak said that “it’s something that we definitely need to have the discussion and the debate about. You need to look at new bold and creative ideas when it comes to diversifying the economy.”

Other companies, Sisolak added, are also looking at the idea. The governor’s office did not reply to a question about what companies the governor was referring to. The proposal would apply to companies with large landholdings that are developing innovative technologies. 

To apply for an Innovation Zone, a company would have to own more than 50,000 acres of land, make an initial $250 million investment and commit to investing at least $1 billion over ten years, according to draft legislation and a website promoting the concept. An applicant looking to form an Innovation Zone must also identify a way to generate new revenue for the state.

During the MSNBC interview, Sisolak also addressed concerns about the water supply for  Blockchains’ proposed smart city. 

“We will absolutely have the water there otherwise they couldn’t go ahead with the project,” Sisolak said, noting that the company had “made arrangements” to bring water to the area. 

As The Nevada Independent reported, Blockchains acquired water rights about 100 miles north of the area where it owns land. Before importing the water, the company would be required to go through a rigorous application and permitting process with state water officials and federal land managers.

Sisolak urges Nevadans to keep ‘open mind’ about plan for autonomous Innovation Zone run on cryptocurrency

Gov. Steve Sisolak urged critics not to write off a proposal pushed by Blockchains LLC to create an autonomous “Innovation Zone” in a large undeveloped tract of Nevada, saying the hard-hit state needs to embrace a unique and bold idea instead of waiting on economic recovery.

Sisolak hosted a virtual roundtable discussion on Friday to offer more details on the Innovation Zones, which are backed by Nevada-based Blockchains LLC and were listed as a cornerstone of the governor’s plans for Nevada’s economic rebound. The company envisions developing a 36,000-person Painted Rock Smart City that is run on a Stablecoin cryptocurrency and supports the company’s efforts toward wider adoption of blockchain technology.

But critics have panned the draft proposal — which has not been introduced yet as formal legislation — to have the Zone slowly secede from the surrounding county. They also question how it will secure enough water without harming the environment or touching off a nasty spate of litigation.

“I'm not afraid of the hard questions. And I'm not afraid to listen to those who believe the concept as proposed is flawed,” Sisolak said. “I just ask that all involved understand that the end goal is a massive economic development investment in Nevada, and a chance ... to set down a marker that Nevada is the blockchain technology center of the world.”

To pursue an Innovation Zone, a company needs to make an immediate investment of $250 million in land and infrastructure, commit to investing at least $1 billion over a 10-year period to develop a smart city, and own at least 50,000 uninhabited acres in Nevada. Presenters called it the highest bar for any economic development program in state history; Blockchains notably owns a 67,000-acre parcel of land in Storey County.

Michael Brown of the Governor’s Office of Economic Development said the project could bring the state 123,000 direct, indirect and induced jobs over the course of a 75-year development. That development phase would have an economic impact of $16.4 billion, according to slides shared during the presentation.

“This is a game changer for Nevada,” Brown said. “Opportunity is knocking here with a multi-generational employment opportunity.”

Economic analyst Jeremy Aguero argued that the model was different than in the past, when the state offered tax incentives to attract the Raiders stadium, carmaker Faraday Future and the Tesla Gigafactory. Innovation Zone leaders would be required to go to the Legislature and have a new, industry-specific tax imposed upon the technology being developed in the Zone, he said.

“The concept here isn’t one of abatements or incentives or anything along those lines,” Aguero said. “As a matter of fact, it's quite exactly the opposite.”

Presenters tried to head off concerns that the Smart City would be a “company town,” saying that the Zone would be governed by a three-member board of supervisors appointed by the governor and independent of the applicant. Those supervisors would be subject to the state’s ethics laws and the Open Meeting Law.

Asked why the proposal called for creating an entirely new political subdivision, Aguero pointed out that the proposed Smart City would be significantly larger than the 4,000-person county it’s currently in, and would require such a heavy administrative lift that starting over makes sense.

“We're not talking about retrofitting a community with some type of innovative technology we're talking about building a city from the ground all the way up,” Aguero said. “You're talking about orders of magnitude different in terms of that technology.”

To concerns that there may not be enough water to supply the development, Sisolak noted there is always a concern about water in any new development. As a city being built from nothing, it would incorporate cutting-edge technology to achieve a carbon-neutral footprint, he said, and “is everything that the environment absolutely needs.” 

“They're responsible for providing water to the Innovation Zone. They'll have to buy the water rights, come up with the water rights in order to do that,” he said of Blockchains. “Environmentally, this is the most sound concept you can possibly have.”

Activists scoffed, with one saying the idea was an "outrageous corporate giveaway" that would set the stage for a water war.

“Blockchains LLC's plan is to build a 100 mile pipeline to the Black Rock Desert to drain remote aquifers important to indigenous people, endangered species and Nevada's outdoor recreation economy," said Patrick Donnelly, Nevada state director with the Center for Biological Diversity. "Governor Sisolak wants to give the keys to our state to tech bros, while enabling a water grab which would destroy the environment."

Above all, Sisolak touted the project as a way to provide affordable housing, diversify the tourism-heavy state economy and provide jobs “that our young people that are in college and in university are looking forward to.” He urged people to keep an open mind.

“We have a long history of embracing innovative creators and bold ideas that others dismiss too quickly,” Sisolak said. “Together, we can turn this big idea into reality that can change Nevada's economic future forever.” 

Inside the economic blueprint helping drive Sisolak’s legislative agenda

In last month’s State of the State speech, Gov. Steve Sisolak laid out his legislative wish-list that — in contrast to his 2019 progessive policy agenda — focused more on economic development and recovery from the COVID-19 pandemic.

Ideas listed by the governor in the speech — funding a state infrastructure bank, creating “Innovation Zones” and a focus on job training and small business development — weren’t surprising, given the state’s precarious economic situation and a likely desire by Sisolak to avoid having his name attached to any controversial policy shifts ahead of his upcoming re-election in 2022.

The starting point for much of the governor’s legislative agenda comes from another source: the long-awaited update to the state’s economic development blueprint, created by the Governor’s Office of Economic Development (GOED) in conjunction with a couple of think tanks — SRI International and Brookings Mountain West -- and a consulting firm -- RCG Economics.

The report was released in December 2020, and was published on GOED’s website in January. In an interview, GOED Deputy Director Bob Potts called the report a “foundational piece” to how the governor and his administration are approaching economic development during the legislative session.

“These were options that were made available to leadership,” he said. “And the ones that showed up in the State of the State are the ones that piqued the governor's interests, and actually fit his agenda and where he wants to go with things. So it's very complimentary.”

Creation of the report has been in the works for several years; GOED in 2018 had actually commissioned (at the price of around $200,000) an update to the state’s initial 2012 economic development blueprint report, but sat on the findings and finished product for more than a year during the transition between gubernatorial administrations. 

In October 2019, Sisolak tapped Michael Brown — former head of Barrick Gold USA and then-director of the Department of Business and Industry — to lead the agency, after it had implemented a temporary pause to new tax abatements offered by the state. In December 2019, Brown said the agency would pursue an update to the 2012 blueprint, but the publishing timeline was thrown off by the COVID-19 pandemic last March.

Potts said that the publishing delay was a blessing in disguise; the initial shutdown and lingering economic aftershocks of the COVID-19 pandemic have thrown out the normal playbooks for how states approach economic development, meaning that the office and hired think tanks had to essentially start the reporting process over from scratch.

Still, there could be legislative changes coming that would affect the economic development planning process. A bipartisan group of state lawmakers have signed on to a bill that would require that the state’s economic development plan be updated every three years.

“What’s happened is when our economy has been robust, we haven't updated the strategic plan,” bill sponsor Heidi Gansert (R-Reno) said. “It’s really important whether the economy is robust or not, that we're working on economic development strategically.”

Much of the report focuses on the near-term economic situation. It calls for an immediate “Economic Dunkirk” — an immediate leveraging of state and federal dollars to “rescue” pandemic-affected businesses and workers without opening the state up to an increase in COVID-19 cases (or affecting consumer confidence in the state’s ability to keep infections down).

But the report also looks ahead to a potentially uncomfortable future: the state’s economy in a post-COVID world that may be much different than the state’s pre-pandemic situation.

“The reality is that some of Nevada’s workers will not return to the same job that they had before the COVID-19 pandemic—either because of business closure, lack of customers, or drop in demand for certain industries,” it states. “Small- and medium-sized businesses have been especially hard hit, and their losses will delay a strong recovery.”

In addressing the anticipated changes, the report attempts to do three things: assess what has and hasn’t worked in past economic development efforts; identify which economic sectors or types of businesses the state should attempt to help grow; and suggest immediate as well as longer-term steps for potential initiatives to help those specific industries.

“The capacity of the state and its associated institutions is stretched to the limits by the current crisis,” the report states. “Nevadans have preferred a low-capacity state government, dispersed over three cities. But Nevadans cannot prosper in the future without accepting the need to invest in real management and financial capabilities.”

Many of the related proposals (called “Capabilities to Realize the Vision” in the report) were included in Sisolak’s State of the State address. They include:

  • Fully fund the state infrastructure bank. The report touts this as a major opportunity for transportation development (noting that the state constitution bans toll roads). “Capital will be cheap, labor will be available, and it will be vital to complete the capital projects discussed in the section above if the state’s economy is going to grow in new, more resilient directions,” the report states. Lawmakers created a shell of an Infrastructure Bank in 2017; Sisolak’s budget adds $75 million to the fund.
  • Create a Small Business Advocacy Center. The report says that at least three different agencies are at least partially focused on addressing the needs of “Micro-, Small-, and Medium-Sized Enterprises” (MSME), and suggests that those responsibilities be housed under GOED. Sisolak’s State of the State remarks touted a proposal by Lt. Gov. Kate Marshall's to create a Small Business Advocacy Center, meant to be a “one-stop location to help small businesses take advantage of the resources that exist and help them cut through the red tape.”
  • Restructure Nevada’s higher education system. The report calls for a better alignment for community colleges with the federal government definition (as well as redefining Great Basin College in Elko as a four-year institution), with a focus on “articulation, certification, remediation, stackable credentials and work-place learning.” (Community colleges have pushed back on the classification issue). Sisolak called for a restructuring of the state’s higher education system, including breaking off community colleges into their own governing structure.
  • Provide incentives for remote work. The report says the state should work to attract a “new class of digitally and geographically connected worker” to Nevada, citing a growth in remote work amid the pandemic. Sisolak called for creation of a “Remote Work Resource Center” in his State of the State speech.

Some of the report’s proposals, such as establishing a sovereign wealth fund or growing the state’s community banking network, weren’t mentioned in the governor’s speech. Potts said ideas listed in the report should be considered a menu of policy options for state leaders to take up, as opposed to a list of must-haves.

“There's going to be back and forth on some of this stuff,” Potts said. “Some of it may never see the light of day. And that's fine.”

And not all of Sisolak’s legislative agenda stems from the report. Despite the word “innovation” appearing 30 times in the report, it contains no details on the proposed “Innovation Zone” concept floated by Blockchains LLC that would allow the tech company to essentially establish their own “county-within-a-county.” The only mention of Blockchains, LCC in the report comes in a section about potential expansion of rail lines.

Potts declined to give additional details about the Innovation Zone concept. GOED representatives have largely avoided the topic or said that more details will be forthcoming from the governor’s office.

The office does not plan to bring bill draft requests to the Legislature that would modify the state’s current slate of tax abatement and incentive programs. The office says it has become more “picky” in choosing which industries it tries to attract to the state — Brown said during a recent budget committee meeting that the agency has started requiring corporate responsibility pledges as part of the incentive application.

But the topic of tax incentives, as well as the state’s economic development blueprint, is likely to come up during the 2021 legislative session. Sen. Heidi Gansert (R-Reno) introduced SB117 last week, a measure that would require GOED to update the state economic development plan at least once every three years, and would require regional development authorities (such as EDAWN in Northern Nevada or the Las Vegas Global Economic Alliance in Southern Nevada) to present plans on “recruiting and marketing” efforts to GOED once every two years.

The measure would also create an interim legislative study committee diving into the state’s current abatements, exemptions and other incentives. A similar measure passed the 2019 Legislature but was vetoed by Sisolak — backers of that bill, including Sen. Dina Neal (D-Las Vegas) have co-sponsored Gansert’s bill.

In an interview, Gansert said it was important for the state to more regularly update its economic development plan more often than once a decade, and that doing so would help match investments in workforce development and other longer-term projects with the state’s economic goals.

She said a legislative committee focused on a “bottom up analysis” of the state’s tax abatement package would help ensure that abatements or incentives were only being awarded to companies with high-quality jobs, and not just automatically offered to any business that met the minimum requirements.

“Right now, a lot of the abatements are on autopilot based on statute, and that's something we need to address,” she said. “I do agree that we need to look at jobs that will pay higher wages, jobs that are related to how we're developing a knowledge based economy, and also in health care. So we have to be able to have some discretion around the abatements and incentives so that we can target the best paying jobs for Nevadans.”

Behind the Bar: Big plans, less funding for state grants office, police changes after summer Black Lives Matter protests and Sisolak Promise Tracker update

Behind the Bar is The Nevada Independent’s newsletter devoted to comprehensive and accessible coverage of the 2021 Legislature. 

In this edition: major updates from state grants office initiatives, criminal justice updates, how Vegas police have changed policies after Black Lives Matter protests this summer, a Sisolak Promise Tracker update and some noteworthy numbers from the higher education system.

Check this link to manage your newsletter subscriptions. The newsletter is published on Mondays and Thursdays.

I want to hear from you! Questions, comments, observations, jokes, what you think we should be covering or paying attention to. Email me at rsnyder@thenvindy.com.


Gov. Steve Sisolak is running for re-election.

There hasn’t yet been a big formal launch for the Democratic governor’s re-election campaign (he confirmed re-election plans last year), but signs are starting to creep in — increased activity of a governor-aligned political action committee (Home Means Nevada PAC), going on publicized tours of facilities and buildings and generally touting a relatively apolitical agenda focused on economic development during the 2021 Legislature.

The commingling of Sisolak’s legislative agenda focused on efforts to help the state recover from the COVID-19 pandemic and political concerns with the upcoming re-election campaign are readily apparent in the quick processing of AB106 on Wednesday evening.

In a vacuum, the bill makes sense. It’s an extra $50 million to the Pandemic Emergency Technical Support grant program, which provides grants between $10,000 and $20,000 to small businesses, nonprofits and other applicable groups. 

The program initially received $51 million in federal coronavirus relief funds — AB106 adds another $50 million in state dollars to the program, which will be directed to unfulfilled applications submitted last year (more than 13,500 applications for the program were submitted last October, or about 10 times the initial funding available).

Pushing the bill through now follows up on Sisolak’s request for the same in the State of the State, and gets needed dollars to businesses as soon as possible (lawmakers could run into trouble with the constitutional requirement to fund K-12 education first if they delay program implementation into the upcoming fiscal year).

But to be clear, there is a political undercurrent to much of this. It’s why the bill is coming up during the second week of session, why Sisolak himself gave opening remarks and why a cadre of high-profile business leaders (including the Las Vegas Metro Chamber) all testified in favor of the measure.

It’s a safe bet that this bill will pass with bipartisan support, and probably make it to the governor’s office sometime next week (assuming lawmakers don’t fast-track the measure). I’d also expect Sisolak’s office and the governor himself to trumpet the additional program funding once the bill is signed. It also wouldn’t be surprising to see funding end up in re-election material down the road, either.

The marriage of Sisolak’s legislative agenda with political priorities will be a trend to watch over the remaining 110 days (ugh) of the session — how and if there are any divergences between plans to improve the state’s economy and what legislative “wins” the governor wants to run on in what’s likely to be a tough 2022 campaign.

— Riley Snyder

Legislators on the first day of the 81st session of the Legislature in Carson City on Monday, Feb. 1, 2021. (David Calvert/The Nevada Independent)

Funding axed for long-delayed grants management software project

It’s estimated that Nevada likely loses millions of dollars in potential federal grants every year because of the lack of a statewide grants management system.

But despite a promise by Gov. Steve Sisolak in his 2021 State of the State address to greatly increase the number of federal grants coming into the state, the state grants office is preparing to enter the next budget cycle without funding for a dedicated grants management system — an absence that a former grants advisory council chair said, “(delays) Nevada getting hundreds of millions of dollars a year in additional federal funding.”

During a presentation Tuesday before the Assembly Government Affairs Committee, interim grants office Administrator Erin Hasty said that the office’s long-held but oft-delayed plans to implement a grants management software program were essentially on ice amid the state’s budget crunch and questionable economic status amid the COVID-19 pandemic.

Lawmakers first allocated funding ($200,000 per year) for implementation of a grants system in the 2017 session — part of a state effort to improve its poor placing in the national ranking of states that bring in the largest shares of federal grant dollars. The recommendation came from a federal grants-focused panel formed in 2015, which found states higher on the national federal grant recipient rankings list tended to have some kind of central software to match grant opportunities with potential applicants (state or local agencies, businesses or nonprofits).

But the program never got off the ground. After the state awarded the contract bid, it was sued by an unsuccessful bidder, which claimed that the former head of the office had tipped the scales in favor of a preferred company. A District Court judge ruled against the state in May 2019, meaning the contract was reopened to potential bidding. 

While lawmakers in 2019 again allocated $200,000 per year to the office to fund a contract, the office said that despite filing multiple requests for proposal, no contractors had submitted a bid that would cover everything the office was looking for in such a software system.

“The bottom line is that vendors just could not provide an enterprise system with full functionality for the allotted budget,” the grants office’s website states.

Hasty said Tuesday that the office had instead filed a request for information in February 2020 to get a better sense of what kind of budgetary request they would need going forward to implement such a software system. But that request was pulled in April, given expected “unforeseen budgetary impacts” caused by the pandemic. 

“Unfortunately, we had that study lined up and ready to go, but then also due to COVID and the budget shortfalls we reverted that back as well,” she said.

Instead, the office will for the foreseeable future continue plugging along on its current system, previously described by the agency as the “ad hoc and complex” web of Excel spreadsheets currently in use by the agency to manage and oversee grants. The office’s website says the state will pursue funding for a grants management system once the state is “again on solid economic and budgetary footing.”

Sisolak — whose proposed budget otherwise keeps funding flat for the grants office over the two-year budget cycle — in his State of the State address called for the state to increase its share of federal grants by $100 million over the next two years and by $500 million annually by 2026.

— Riley Snyder

Matching grants pilot project a success, but no additional funding expected

The state grants office had a promising response to a pilot program approved in the 2019 Legislature, where the state allocated $1 million to be used for grants that require a state matching fund — a program aimed at capturing federal dollars otherwise left at the table because the state agency or business couldn’t put forward necessary matching funds.

Hasty said the office received 31 applications and committed $970,000 of the original million dollars within the first three months of the program (starting in January 2020), but stopped accepting applications in April 2020 under the assumption that remaining funds would be reverted back to the state’s general fund.

So far, only one matching grant — $45,129 to the North Las Vegas Fire Department — has been fully executed, with the fire department receiving a $451,292 grant from the U.S. Dept. of Homeland Security. According to the office, the grants went to “replace 16 aging cardiac monitors to meet current standards and community need.”

Two other allocations of matching grants (worth a combined $925,049) were approved by lawmakers but still haven’t been notified if they’ll receive the corresponding federal grant dollars. 

The other two state-approved pending grant applications include:

  • A tribal government-backed grant to bring high-speed internet to farms and rural communities; state match of $855,000, with a federal match of $2.6 million.
  • A nonprofit organization to provide “human and family services,” with a state match of $70,000 and a federal grant of $210,000.

Under current law, the state share of those grants will revert back if the grants aren’t awarded by June 30 (the end of the fiscal year).

Assuming lawmakers don’t introduce a bill funding the program, it’ll close shop at the end of the fiscal year in July. But the grants office said in its report on the program that the brief experiment has potential for future success.

“With the...pilot program’s successful launch and three months of operation, the Grant Office believes it has showed that the pilot program could be a successful, permanent program if fully resourced and staffed,” the office wrote in the report.

— Riley Snyder

Vegas police discuss lessons learned from 318 protests in 2020

Las Vegas police say they updated policies on protests and civil unrest amid criticism over their handling of the Black Lives Matter protests over the summer. 

Chuck Callaway, a lobbyist for the Las Vegas Metropolitan Police Department, told the Assembly Judiciary Committee on Monday that the agency updated its use of force policies and protest protocol in 2020.

Those changes include placing a person in a recovery position when providing medical assistance (which ensures they are able to breathe), prohibiting the use of the lateral vascular neck restraint (LVNR), making crowd dispersal orders clearer and only deploying pepper spray into a crowd if approved by a commander. 

Callaway said in his presentation that many of the arrests from the Black Lives Matter protests were made for not following dispersal orders given after police declared the assembly unlawful for no longer being peaceful. The agency found that people couldn’t hear the order or did not know where to go, so it has adapted with a policy to give dispersal orders at multiple locations around the crowd and to provide an exit route for the crowd to follow. 

Callaway said that the agency had not expected Las Vegas’ protests to turn violent as they did in other cities. But among the peaceful majority, some attendees threw frozen water bottles, bricks and rocks at officers, leading to 45 officer injuries between May 29 and June 3. Remaining protests and gatherings through July 31 did not have any more injuries recorded. 

“There was a mindset that we had been working good with the community and had good community relationships … there are always ways we can improve but I think that we assumed that it wasn't going to happen in Las Vegas,” Callaway said. “But the vast majority of people that attended them were exercising their First Amendment rights and acting peacefully.” 

During 2020, LVMPD handled 318 protests. Eventually, the police agency made a greater effort to create a dialogue with protest organizers ahead of time, which Callaway said resulted in more peaceful marches and fewer incidents by “mitigating any bad apples” that might have later joined in with the protesters.

But sometimes protest leaders didn't want to communicate with the police because of lack of trust, Callaway said. 

“We learned a lot of lessons over the past year in regards to protests and civil unrest, and so we've created a new policy to help us do a better job,” he said.

Lawmakers have even more proposals intended to curb what critics see as overly aggressive policing during protests. Democratic Sen. Dallas Harris, for example, wants to include in the law restrictions on the use of rubber bullets and rules on giving sufficient warning before releasing pepper spray into a crowd.

— Jannelle Calderon

Eliminating racial bias in criminal justice

Southern Nevada prosecutors publicly acknowledged they believe implicit racial bias exists — a declaration that could ease the passage of bills to curb the effects of unconscious stereotypes in the criminal justice system.

Lawmakers this week introduced SB108, sponsored by the Senate Judiciary Committee, which would require “any person employed in the criminal justice system in this State to complete periodic training relating to implicit bias and cultural competency.” It would also require the attorney general to adopt regulations concerning that training.

The bill was also mentioned briefly in Tuesday’s Assembly Judiciary Committee meeting, when John Jones, chief Clark County deputy district attorney, said that his office does believe in the issue of implicit racial bias. Jones also said that his office has already received training on the issue and on understanding implicit bias.

During the meeting, Assemblywoman Shannon Bilbray-Axelrod (D-Las Vegas) brought up a blind charging system that could help mitigate the effects of implicit racial bias.

The system, created by the Stanford Computational Policy Lab, has been used by the San Francisco District Attorney’s office, and it works by way of redacting race-related information from the case narratives that district attorneys read before making charging decisions on incoming felony cases.

Implicit racial bias was also a hot topic in 2019 when the Legislature passed AB478, which requires police officers to complete annual training on topics including racial profiling, mental health and implicit bias recognition. Assembly Speaker Jason Frierson (D-Las Vegas) previously said that a state board overseeing officer training is not fully implementing the law, but the board’s executive director Mike Sherlock said that the board does ensure that individual agencies are complying with the objectives for each training topic.

 — Sean Golonka

By the numbers

Legislators in the Assembly Education Committee heard presentations Tuesday from two top higher education officials: system Chancellor Melody Rose and UNLV Medical School Dean Marc Kahn. Across those two presentations, a handful of numbers stuck out. 

24,000: The number of vaccinations administered by UNLV since the first two coronavirus vaccines were approved and shipped out by the federal government late last year. Kahn said his goal, as the vaccination process continues and a third vaccine candidate nears approval, is for UNLV to remain involved “until each and every eligible person in Southern Nevada is vaccinated for this potentially fatal disease.”

8 percent: The decline in enrollment across Nevada community colleges compared to the prior fall. Likely triggered by the continued widespread use of virtual learning in the wake of the COVID pandemic, Rose touted Nevada’s figures as positively robust compared to some other higher education systems that have been “slammed” by double-digit enrollment losses “upwards of 15 to 30 percent.” Rose said NSHE “very much expect[s] those folks to be back” once learning goes back to business-as-usual (a sentiment echoed by community college presidents in my conversations with them over the last week). 

2022: More precisely, late-summer or early fall 2022, about the time the new UNLV medical education building should be complete. In some stage of development for nearly half a decade, construction on the building finally began last year as part of a public-private partnership spearheaded by a private development corporation. The project will likely receive one last push from the state this session: a reinstatement of $25 million in once-cut state funding meant to cover what hasn’t been funded by private donors. 

56.9 percent: That’s the number of minority students at NSHE institutions (as of fall 2018, the date of the most recent federal data and the data presented to lawmakers). That number has risen steadily over the past decade, so much so that NSHE had become a majority-minority system by 2015. 

51,000: Number of community college students across Nevada, of which 57 percent are female and 58 percent are students of color. It’s nearly half of all NSHE students statewide, and it could also be the total number of affected students should lawmakers follow the governor’s lead on a proposed idea to create a new governance structure for the state’s four community colleges. 

— Jacob Solis

Sisolak Promise Tracker update

We’ve got an update on one (of the nearly 55) promises listed on our Sisolak Promise Tracker page.

During the 2018 campaign, Sisolak wrote in a Reno Gazette-Journal op-ed that if elected, he would “appoint experienced leaders from the private sector" to serve as economic development "ambassadors" for industries such as renewable energy, technology, manufacturing, logistics, mining and rural economic development.

“Deputy directors will be ambassadors to businesses seeking to locate and expand in Nevada, and they will be the primary liaison between my office and private sector companies in emerging industries,” the future governor wrote in the op-ed.

We’ve had that promise listed as “not addressed” since the 2019 Legislature, as there have been no public announcements regarding creation of any private-sector focused “deputy director” positions within the Governor’s Office of Economic Development (GOED). Prior to the publication of our latest update of the promise tracker feature, we reached out to GOED to see if there had been any traction as it relates to that promise.

GOED got back to us a few days after publication of the update, and in a 284-word statement, made the case that the promise had been fulfilled through the hiring of GOED Director Michael Brown — the former head of Barrick Gold USA.

The office also noted that many of its current employees had private-sector experience, and that Brown’s tenure (which began in October 2019) has been largely focused on responding to the COVID-19 pandemic.

“Just four months after Director Brown started, GOED’s role changed radically in response to the pandemic,” the office said in a statement. “That is hardly enough time to have been able to create and add new deputy director positions. Director Brown is committed to the Governor’s vision of bringing in industry experts and ambassadors into GOED when we get to the other side of this budget crisis.”

We’re keeping this promise as “not addressed” for the time being, however. There’s a difference between what Sisolak called for in that op-ed — bringing on dedicated and specified deputy directors to work with private businesses — and hiring a director of an agency with private sector experience.

— Riley Snyder

Senate Minority Leader James A. Settelmeyer, left, and Chief Justice James Hardesty on the fourth day of the 81st session of the Legislature in Carson City on Thursday, Feb. 4, 2021. (David Calvert/The Nevada Independent)

What we’re reading

If you missed it on Sunday, be sure to check out Michelle Rindels’ excellent overview of criminal justice issues before the Legislature, including updates on police reform, death penalty repeal, bail and other major issues.

Daniel Rothberg on why a proposal to create new specialty water courts was DOA on the first day of the session.

Jacob Solis digs into the governor’s State of the State proposal to split community colleges off into their own governing body. Lots of really interesting details, and it sounds like the idea surprised many community college leaders.

Our Freshman Orientation series continues with Assemblywoman Venicia Considine and Sen. Fabian Doñate.

Tesla agreed to donate millions of dollars to education in Nevada as part of its massive tax abatement deal with the state in 2014, but questions are lingering as to who gets to decide where those donations go, the Nevada Current’s April Corbin reports.

Nevada’s prison system wants to exclude inmates from the state’s Sexual Assault Survivors’ Bill of Rights (Nevada Current).

Carson City businesses aren’t seeing the normal rush of legislative traffic (Las Vegas Sun).

Similar reporting on slower-than-normal business near the capitol (CarsonNow.org).

Nevada Mining Association President Tyre Gray is not only the first African-American head of the mining industry association, but the first African-American head of any trade association in Nevada (Fox5).

UPCOMING DEADLINES

Days to take action on Initiative Petitions before they go to the 2022 ballot: 30 (March 12, 2021)

Days Until Legislator Bill Introduction Deadline: 33 (March 15, 2021)

Days Until Sine Die: 110 (May 31, 2021)

Updated at 9:28 a.m. on Thursday, February 11, 2021, to correct the spelling of interim Grants Office administrator Erin Hasty's name.

Sisolak-backed bill adding $50 million for small business grants fast-tracked, passes Assembly

Members of the Assembly in the chamber.

State lawmakers are moving quickly to process a bill that would provide an additional $50 million for a pandemic-related grant program aimed at small businesses and nonprofits, holding a hearing and unanimously voting the measure out of the Assembly on Wednesday.

During the hearing on the bill, AB106, Treasurer Zach Conine said that more than 4,500 small businesses and nonprofits have received funding through the Pandemic Emergency Technical Support Program (PETS), which provides awards of up to $10,000, but the overwhelming response to the program has left some applicants waiting. Gov. Steve Sisolak also spoke during the virtual meeting to advocate for the bill — a proposal he called for during his January State of the State address.

“Response to this program has been incredible, but also clearly demonstrated the need for assistance that exists throughout the state,” Sisolak said at a joint meeting of the Assembly Ways and Means and Senate Finance committees. “We know the need continues. That's why I announced my recommendation to add another $50 million in funds.”

After the hearing, Assembly members suspended normal rules to process the bill faster, approving it on a unanimous vote. It next heads to the state Senate, where it’s also expected to move quickly through the legislative process.

Assemblywoman Robin Titus (R-Wellington) also asked the governor to loosen restrictions on businesses, while emphasizing that there is urgency to pass the bill soon, as it requires all funding to be committed by the end of June. That’s when the state’s fiscal year ends, and any spending after that date is limited because of constitutional requirements that the state fund K-12 education before any other program.

“I am supportive of the $50 million in funding to help our small businesses that have been impacted by our blanket restrictions since last spring. I encourage the governor to loosen restrictions upon them and allow people to make a living,” Titus said.

Small business owners, including Las Vegas-based Empowered Cafe co-owner Cassandra Barslow, said their businesses had been able to stay open through the pandemic because of financial support received from the PETS program.

“The PETS grant just infused this capital for us to be able to keep those doors open and to keep our employees,” Barslow said. “We were about to make tough decisions where we were gonna have to let our employees go and just my husband and I run it, and we didn't want to do that.”

PETS launched on Oct. 19 with $20 million in funding, after an earlier state effort to administer commercial rent assistance awarded less than half of its approved funds. After the approval of more federal funding shortly after the program’s launch, the number of dollars available for small businesses and nonprofits through PETS swelled to $51 million.

In the four days the program was open for applications, the state received more than 13,500 submissions — about 10 times the amount the rent program received.

Conine said that there are no plans to reopen the program to new applicants even with the additional funding because he wants to get the grant money out to those that have been waiting. Conine expects the additional funding will allow grants to be awarded to another 4,500 applicants.

“If we get that additional [$50 million], we'll be able to really chip away at that, and the majority of people who applied in October will get funding,” Conine said in an interview in January.

The bill also requires that all funds be committed by June 30 and requires the Governor’s Office of Economic Development (GOED) to send a report to the Interim Finance Committee by that date that details the expenditures made from the funds. GOED Director Michael Brown, said that report would likely include more detailed information about the geographical spread of program funding across the state, as well as more information about how awardees have spent the funds.

Still, small business owners said that grants through the program were a huge relief.

“I am grateful that I was the recipient of the PETS grant, which really helped us tremendously to keep our doors open and for me to make payroll,” said Trina Giles, owner of Gritz Cafe in Las Vegas. “Your approval of this, of this bill will help many other small businesses like myself.”

Grant program has aided thousands of small businesses, thousands more still waiting on a response

Man pours a beer into a glass a tap.

A pandemic-related grant program aimed at small businesses and nonprofits has already helped thousands of Nevadans, but an overwhelming response to the program’s launch in October has made assisting all of the applicants nearly impossible.

The Pandemic Emergency Technical Support Program (PETS) launched on Oct. 19 after an earlier state effort to administer commercial rent assistance awarded less than half of its approved funds. The PETS program offered broad eligibility, and in the four days the program was open for applications, the state received more than 13,500 submissions — about 10 times the amount the rent program received.

Treasurer Zach Conine said that the application period was one of the busiest in the history of ZoomGrants, an online application management system that Nevada and other jurisdictions have used to administer CARES Act funds.

“We've had so much volume through the PETS program that we were slowing down ZoomGrants in the whole country. So there were grant programs in other states and cities that didn't work because there were so many people trying to sign up for PETS,” said Conine.

Through the middle of January, the treasurer’s office and Governor’s Office of Economic Development had sent out more than $40 million through the program to approximately 4,100 small businesses and nonprofits in awards of up to $10,000.

But with so many applications to process, communication between the state and some small businesses has not always been clear.

Roy Brennan, the owner of a hamburger restaurant in Reno called Beefy’s, said he never received a confirmation email after applying for the PETS grant and received only one response from the state that he was in the queue.

Since the pandemic began, Brennan said he has lost one employee and had to reduce his business hours. And in order to expand his restaurant’s capacity, Brennan spends two hours each morning putting up a tent to allow for outdoor seating. 

“You're just out there, just lost. It's very frustrating to be left in the dark,” said Brennan.

On Wednesday, the treasurer's office provided comment that Brennan's email was incorrectly listed on his original application, but multiple communications had been sent to him over the last several weeks. And after publication of the story, Brennan said he was in communication with the treasurer's office and that his grant application was approved.

The state has already allocated nearly all of the $51 million that was previously available through the program. But with more PETS funding potentially on the way, applicants, who have not yet received funds through the program, may still be awarded the grant.

In his State of the State address Monday, Gov. Steve Sisolak proposed an additional $50 million in the state budget for the program. That money could be available as early as the first few weeks of February because the Legislature can approve that allocation by designating federal funds from the CARES Act before needing to approve the full budget.

“I’m asking the Legislature, as one of their first items of business, to get this done,” Sisolak said about approving the additional funding for the PETS program.

The program’s process

Conine said that the PETS program is the largest small business assistance grant program in state history. And because the treasurer’s office does not normally manage grants, Conine and his team have had to adjust to new processes that come with administering the program.

“This is something that was generated over the span of a couple of weeks, with a team of less than 10. We've been pretty flexible, looking for ways to speed up the process,” said Conine.

After the application period in October, the first step of the process was to put businesses in a ranked order based on a prioritization list set up by Conine’s office and approved by the Legislature. The list was aimed at those most affected by the pandemic and included disadvantaged businesses, nonprofits, bars, pubs, taverns, breweries, distilleries and vineyards.

After applicants were prioritized, the state began to process requests for funding using a variety of checks. Applicants must have an active business license with the state and have no more than 50 employees, and they must demonstrate that they have faced pandemic-related hardship. Businesses also are reviewed to see whether they are still active and have a physical location in Nevada.

If an application is approved, the recipient must submit paperwork, including a signed grant agreement and banking information, and then the state reviews that information and administers the funds.

But some of those steps can slow the process down. Conine said that he and Michael Brown, the executive director of the Governor’s Office of Economic Development, have had to repeatedly call some businesses to try to verify that the business is real. Conine estimates that of the more than 4,000 approved applicants, he and Brown have talked to 700 or 800 directly.

As Conine and his team handle a massive volume of applications with limited resources, they aren’t always able to provide responses to every applicant.

“I think that our goal here is to communicate with businesses that they are in line, that we're going to fund as many businesses as we can. You know, given the volume of emails and the fact that there's only, including myself, three people answering them, we don't look up everybody's status, when they reach out. And that's just to be fair,” said Conine.

Even as some applicants experience struggles in communicating with the state, others have said that applying for the PETS program was easy, including Kelli Kelly, executive director of the Fallon Food Hub.

“I write a lot of grant applications, usually like to the Department of Agriculture or to the USDA. And this was totally unlike anything I've ever written before,” said Kelly. “It was very straightforward. It was, you know, tell us who you are, provide us with your bona fides, you know, validate the fact that you're a Nevada-based business.”

Kelly said the only problem she faced while applying was the grant website crashing, and technical issues were among the most common problems people experienced during the application process.

“With the exception of ZoomGrants and some technology issues, which are more of a function of volume than anything, we think the process has been relatively smooth ... for a thing that's never been done before in the history of the state,” said Conine.

The impact

Jonathan Bradley, who operates a frozen yogurt food truck in Southern Nevada called Spoon-a-Bowl with his wife Ashley, also said the application process was “super easy.” But with limited channels of communication between the treasurer’s office and PETS program applicants, Bradley had to get creative in order to hear back about his grant request.

Bradley said he finally received a response to his application after tweeting at Erik Jimenez, senior policy director for the treasurer’s office.

“I just, kind of tongue in cheek, sent him a message or sent him a tweet saying ‘us next please,’ you know, we desperately needed it at that point,” said Bradley. “And he got right back to me and told me that he was going to look into our profile, and literally within the next 30 minutes, I got a phone call from him — and you know there's few things in life that have given my wife and I more joy than that phone call.”

For Bradley, receiving the grant was a lifeline. As food truck operators, Bradley and his wife had to completely shift their business model when the pandemic hit. Instead of selling their frozen yogurt at events, they had to start delivering their product — and after being denied a grant from the city of Henderson, they were in need of help.

“Looking back on it, had we not gotten that grant, I'm fairly certain that our business would have gone out of business,” said Bradley.

With the grant money, Bradley said he was able to catch up on bills and that he’ll have enough money to survive until his selling season starts up again.

Across the state, other small businesses have experienced flashes of relief because of the money they were awarded through the PETS program.

Cassandra Barslow, co-owner of Empowered Cafe in Las Vegas, said the $10,000 her business received allowed her to hold on a little bit longer.

Barslow trains and employs blind workers, and when the pandemic shut her business down for a few months, she had to let her workers go. Barslow said she was able to reopen in June with the help of a loan from the Paycheck Protection Program, but the PETS grant was another huge boost in allowing her to pay her employees.

“We literally cried cause we just got the PETS grant and we—I honestly thought I was going to have to let my employees go again,” said Barslow.

Wyndee Forrest, who owns CraftHaus Brewery in Las Vegas, also was awarded money from the PETS program. Forrest said she had to change her business model four different times to pivot with all of the challenges posed by the pandemic. She applied to the program hoping for a little help with providing for her team.

“It's not going to save us from going bankrupt. It will help us inch by to maybe cover, you know, a two week payroll timeframe, but any grant is always welcome,” said Forrest.

The program’s future

The treasurer’s office is still administering the last of the $51 million that was previously allocated to the PETS program, and Conine said money continues to go out every day. But if the Legislature approves the governor’s request to allocate another $50 million to the program, Conine’s office can begin to approve funds for many more of the nearly 14,000 original applications as early as the first few weeks of February.

That extra funding would come from money left over from the CARES Act, according to Conine. He also added that he wants to get as much money out to small businesses as possible using the PETS program. 

A release from the treasurer’s office on Wednesday stated that all applicants who were waiting to hear if they had been awarded a PETS grant, along with those previously denied because of lack of available funding, would be emailed on January 20 with information on the most recent updates to the program, including the possible addition of more funding.

Conine said that there are no plans to reopen applications for the program because he wants to get the grant money out to those that have been waiting.

“If we get that additional 50, we'll be able to really chip away at that, and the majority of people who applied in October will get funding,” said Conine.

Conine also placed a strong emphasis on getting small businesses, in particular, the support and resources they need, and hopes they will help serve as the backbone of the state’s economic recovery.

“Talking to these small businesses, I think it's still very clear how important it is to support their efforts, and try and make sure that they've got the resources they need,” said Conine.

During his State of the State address, Sisolak also announced that Lt. Gov. Kate Marshall will be working to create a Small Business Advocacy Center that the treasurer’s office is also helping with.

As small businesses in Nevada continue to deal with pandemic-related hardships and other problems past the pandemic, the advocacy center is intended to help centralize state resources that exist to help small businesses.

“The goal of that Small Business Advocacy Center, eventually, is to serve as a Nevada 211 for small businesses,” Conine said, “so that they can reach out and say, ‘hey, I'm having trouble doing this,’ and then they can get the help they need to get going.”

This story was updated at 4:00 p.m. on January 27 to include an update about Brennan's grant application.

As Nevada’s legal brothels remain closed, sex workers think bias is at play

Photo of the interior of the Mustang Ranch

When word got to Alice Little that brothels in Nevada would be closing for 30 days to comply with state orders and slow the spread of COVID-19, she brought the two houseplants in her room at the Bunny Ranch down to the front desk and asked the employee there to look after them while she was gone.

Eight months later, Little hasn’t seen her plants again.

Little is one of hundreds of legal sex workers in the state who lost their major source of income when brothels and other businesses shut down mid-March. While most other industries have been able to resume some level of operations, Gov. Steve Sisolak has indicated that the state’s brothels are “not on his radar” to reopen. 

Services allowing physical contact around the state have been allowed to resume service, with tattoo shops, estheticians, and massage parlors open since May. Women who work in Nevada’s legal sex industry say they feel they’re being ignored not because of the risk their business poses but because of a bias against their industry.

“I think it’s discriminatory of the governor,” said Kiki Lover, a legal sex worker living in Reno. “He’s discriminating against sex workers.”

Prior to the shutdown, Lover was working five days a week at the Sagebrush Ranch in Lyon County. She’s based locally, so when news came on March 19 that the facility would be closing its doors immediately, she was able to pack up her room and head back home.

But for the women living in the brothel full time, things weren’t as simple.

“The first couple of weeks, they let the girls [stay] that were homeless or lived too far away,” she said. “Then everybody has to get out because at the end of the day ... the brothel can’t just keep you there all the time without you working.”

Moonlite Bunny Ranch brothel
The Moonlite Bunny Ranch brothel in Mound House, east of Carson City on Thursday, Oct. 18, 2018. (David Calvert/The Nevada Independent)

Legal sex work in Nevada

According to both Little and Lover, it’s common for women from other states to stay at one of Nevada’s brothels for periods of a few weeks or months in order to take advantage of the state’s legal industry before returning back home. Nevada’s legal sex industry is still controversial, often condemned by anti-sex trafficking organizations that say brothels are part of a culture that encourages sexual exploitation, but a lawsuit that sought to ban them was dismissed last year.

Nevada is the only state to allow legal prostitution, but state law requires it to take place in a licensed brothel in a county with a population of less than 700,000.

Clark County is the only Nevada county to exceed that population count, but six other counties — Carson City, Douglas, Eureka, Lincoln, Pershing, and Washoe — have expressly outlawed prostitution. Among the 10 counties where brothels can legally operate, none are operating in Churchill, Esmeralda or Humboldt. 

The Mustang Ranch Brothel, officially sanctioned by Storey County in 1971, was the state’s first legal brothel. Joe Conforte, the ranch’s original owner, was forced to forfeit the property to the federal government in 1999, but owner Lance Gilman bought back the buildings and reopened the brothel in 2005.

“We employ 49 people,” Gilman said during an interview with The Nevada Independent. “Because we’re 24 hours a day, seven days a week — we’ve never closed except for COVID — we have to run a pretty good-sized staff in house.”

Those full-time employees include security, kitchen staff and chefs, bartenders, housekeeping staff, cashiers and “parlor hostesses” who manage in-house operations. In addition to the 49 staff members, there are several hundred sex workers who work at the brothel on a rotating basis. 

“We have ladies that work there from all walks of life,” Gilman said. “We have teachers there, we have attorneys there, and we have bookkeepers there. A lot of the ladies in the workforce are without a husband but with children, so they find that working in our industry legally is safe for them.”

Sisolak said during an interview this month at The Nevada Independent’s IndyFest conference that brothels are not his focus when other sectors are still trying to navigate reopening.

“Certainly we’re going to have to look at getting kids back into schools before we look at getting folks back into brothels,” he said. “We’ll be addressing it sometime, certainly, but it’s not in the immediate future.”

Gilman counters that his employees and contractors deserve the chance to resume work just like workers in other industries.

“We’ve been held closed longer than any other business in the state, and still are, and it’s unreasonable,” said Gilman. “We need help.”

Surviving in the interim

Legal sex workers in Nevada’s brothels are independent contractors and not employees, and this status has made it more difficult for those workers to receive supplemental benefits while out of work. Unemployment benefits were not immediately available to independent contractors during the first months lockdown, and although the Pandemic Unemployment Assistance (PUA) was eventually extended to workers with this classification in May, Lover, Little, and Gilman all said they don’t know any women in the industry who have actually received the benefits they applied for.

“Many sex workers found it difficult to apply for those or are still pending and waiting to get those funds,” Little said. “As we know, here in Nevada it took many months after the shutdown for the CARES Act to actually kick into gear, and sex workers are really left with zero options.”

Brothels were not eligible for the Small Business Administration loans that many businesses took advantage of earlier this year, but Gilman did manage to secure Paycheck Protection Program (PPP) loans for the restaurant attached to Mustang Ranch, the Wild Horse Saloon. 

Additionally, Gilman’s business was eligible for federal small business grants distributed by Storey County. Storey County is the only county that participated in the grant program, funded through federal coronavirus relief funding, in which legal brothels operate, and the decision is up to each county to determine what businesses are eligible. Gilman is a county commissioner in Storey.

Even after receiving between $150,000 and $350,000 in PPP loans, Gilman says he still eventually had to furlough his employees, and the contractors at Mustang Ranch who are not bona fide employees were not able to receive any supplemental income through these loans.

Without unemployment benefits, many women in the industry have tried turning to creative options to make up for lost income, including phone sex lines and cam work. Both Lover and Little have been utilizing the online platform Onlyfans, a content-sharing platform that allows users to charge for access to videos, photos, and direct messaging.

“It’s all online, and that has been keeping me afloat, but it’s nowhere near what I’d make at the brothel of course,” said Lover. “But, it’s been paying the bills.”

Images from a forum opposing Lyon County Question 1 featuring legal sex worker Alice Little at the Bunny Ranch Restaurant in Mound House, east of Carson City on Thursday, Oct. 18, 2018. (David Calvert/The Nevada Independent)

According to Little, however, online options are only viable for women who have already built a client base willing to pay for access to their content. Little bills herself as Nevada’s highest-paid legal sex worker and had standing appointments with clients that had to be cancelled because of the shutdown, but most women in the brothels make money from walk-in clients.

“I’m successful at a level that most ladies aren't, and even then I had to take a look at things and figure out, ‘Oh, I need to scale back,’” Little said. “My real concern is for the ladies who just recently got started in this industry. What are they supposed to do?”

Little said she knows some women who have had to start working independently without the protection of a legal system.

“They bought into the legal system, paid their taxes … only to be shut down and be worse off than they would have been working at any other job,” Little said. “The fault doesn’t lie with the women for making the choices that they’re making at this point. It, if anything, weighs on the sheer economics of our country and the lack of protections available to sex workers.”

Multiple counties are allowing brothels to provide non-sexual escort services, but escorts are not allowed to utilize brothel facilities. Little told the Reno-Gazette Journal that her clients are unwilling to travel for these services and are instead waiting for brothels to reopen. Escort services also pose the same difficulties for women who are just starting out and don’t have an established client base who will seek them out for these services.

To those who think sex workers should find new jobs, Little says the stigma of their current job is a major barrier.

“What do we expect sex workers to do, put down on their resume, ‘Was a sex worker at the Bunny Ranch for five years,’ and then go work as a cashier?” Little said. “I’m not sure what a reasonable expectation is here just given the sheer amount of stigma that comes with being associated with the industry.”

Losing their safety net

Beyond the difficulty in leaving, many women also have no desire to leave the industry as long as they can continue to work safely.

Although contractors working in brothels still had to pay for their own medical services, brothels did provide access to weekly testing, and being a legal sex worker provides a degree of protection for women because they can report incidents of violence or harassment without fear of charges for illegal prostitution. Women who have lost that option and are now transitioning to independent or survival sex work also lose those protections.

Service providers are seeing first hand how difficult it is for women in the industry, especially during the pandemic. The Cupcake Girls, a nonprofit organization based out of Las Vegas and Portland that offers support to women currently or previously involved with the sex industry, has seen a massive increase in demand for its services throughout the past several months.

“We saw [a] 150 percent increase in support requests,” said Jenny Fay, the organization’s executive director for Nevada. “Communications with clients … the number of emails, phone calls, meetings, year over year in those months it went up 600 percent.”

The Cupcake Girls does outreach at strip clubs and legal brothels, refers clients to partner organizations and offers intensive case management. Fay noted that, through its counseling services, the organization saw a 300 percent increase in reports of domestic violence.

Domestic violence rates have been increasing across the country throughout the COVID-19 pandemic, and, in Nevada, service providers have been working to address that need and find ways to help those who may be stuck at home with an abuser and unable to find assistance. 

The most dramatic increase noted by the organization, however, was a 1,100 percent increase in the number of individuals reaching out for financial support such as grants for rental assistance and utility payments compared with the same period in 2019. While the organization does not have statistics on how many of the individuals reaching out were previously working in legal brothels, Fay observed that the increases in need have been “across the board.”

“Whether it was somebody working in the legal brothels, or somebody working in a strip club, or somebody doing street based sex work, it seems from what we’re seeing, there is a need, especially, for financial support,” she said. “There’s just less money being made in any way right now in our city especially.”

What does social distancing look like in a brothel?

When asked during an IndyFest panel about brothels reopening, Sisolak said he doesn’t know how people would social distance in brothel, and that it’s up to brothel owners “coming up with a plan.” But those in the industry say they have submitted plans to the state only to be met with silence.

Gilman first submitted reopening plans in May to the COVID-19 Task Force and the health department as well as to the Local Empowerment Advisory Panel which helped develop reopening guidelines for Nevada businesses. He also submitted a letter with the plan attached to the Governor’s Office of Economic Development.

A representative said that Michael Brown, the office's executive director, received the letter and responded to Gilman, saying the reopening request, "could be considered at a future phase in the State's re-opening plan."

Gilman says he is uncertain where in the process the request is being rejected and is looking for clarity from the state. 

“Where we’re being held is an unknown right now,” he said. “We’ve had no feedback of any kind that anyone rejects them … So why we’re not open is an absolute unknown puzzle, and we need to be told.”

The reopening plan includes procedures for screening employees, customers and contractors, limiting the number of customers and contractors in the building, sanitizing procedures and mask use requirements, and procedures for containment in the case of a positive test or failed screening.

Gilman’s proposal would allow the brothel to operate without physical contact, essentially allowing the non-sexual escort services currently allowed by the county to take place within the brothel facility. 

“In this industry, much, if not the majority, of the courtesan-customer interaction does not involve physical contact even during normal business operations,” Gilman wrote in the plan.

The bar would also remain closed to customers under Gilman’s plan, but the kitchen would be able to operate to prepare food for guests, which would then be packaged and delivered to rented rooms.

The letter sent on behalf of the ranch to Brown also indicated that the brothel had been implementing safety protocols prior to its official shutdown.

“We took temperatures at the door with trained personnel, we took temperatures of every employee and every working lady prior to starting their workday every day,” Gilman said in the letter. “We use gloves, alcohol wipes and all forms of sanitary protocols. These are everyday standard procedures.” 

The front entrance to the Chicken Ranch brothel
The Chicken Ranch brothel in Pahrump as seen on Thursday, April 19, 2018. (Jeff Scheid/The Nevada Independent)

Gilman is not the only brothel operator who’s taken steps to assure the state of the industry’s safety standards. At an Oct. 8 COVID task force meeting, Trudy Kevoian, the general manager of the Chicken Ranch in Pahrump, attested to the sanitation of her business.

“When it comes to safety and sanitation,” she said, “I would say our front bars inside of the brothels far exceeds those of Walmart or any of the bars that are currently open and have been given the opportunity to bring their people back to work and let them provide for their family.”

Lover agreed that transitioning the already clean environment of the brothels into a COVID-compliant workplace would be simple, but she believes that physical contact can still be part of the job, using the same mask rules and appointment-only system that massage parlors in the state have been utilizing.

“The brothels are one of the cleanest places you could actually be or go,” she said. “So just let us reopen, we can just put on a mask! We can definitely do our jobs with a mask on. It’s not that hard.”

Little also emphasized that she believes reopening can be done safely. Without effective guidelines that ensure safety for women in the industry, including access to COVID testing, Little said she may not return.

“I would probably leave the industry,” Little said. “We need to have less ladies working. We, ideally, need to have people not coming in and out of the ranch hanging around the bar and drinking … I feel it’s very, very doable, but you can’t do it without some reasonable change.”

This story was updated Oct. 26 at 12:00 p.m. to include information provided by the Governor's Office of Economic Development.

State approves $20 million for small businesses after struggling to give away commercial rent assistance

Nevada is launching a new, broad-based grant program for businesses and nonprofits that suffered pandemic-related hardship after an earlier effort to offer commercial rent assistance was able to get less than half of its funds out the door.

Lawmakers on the Interim Finance Committee voted on Friday to authorize $20 million in federal coronavirus relief dollars for the Nevada COVID-19 Emergency Small Business Recovery Grant Program. It comes after the Commercial Rental Assistance Grant program, which was also allocated $20 million, was only able to award $8.5 million.

“We went out and tried to give this money away, and it was more difficult than we thought,”  state Treasurer Zach Conine told legislators. “I think that's because of the process.”

Federal coronavirus relief funds must be spent by the end of the calendar year, and commercial rental help is not the only program with a relatively low disbursement rate. Less than 10 percent of the $70 million Nevada applied to tenant rental assistance has been distributed about halfway through the program’s existence.

The commercial rental assistance program — which stopped accepting applications earlier this month — received 1,465 pre-applications from businesses and pre-approved 1,335. But only 831 applicants will actually have money sent to their landlord on their behalf.

Businesses were disqualified from the commercial rental assistance for a variety of reasons, including failing to fully submit supporting documentation showing they suffered a revenue loss of 30 percent or more, having more than 50 employees and not having an up-to-date business license. Successful applications also needed involvement of the landlord, who had to accept the money and promise not to evict the tenant in the next three months.

The program required state staff and others to coach many commercial tenants through the application process and field hundreds of inquiries.

“It is a complicated program,” said Michael Brown, head of the Governor’s Office of Economic Development (GOED). “The treasurer and the team of people in my office and his office have been trying to figure out how we simplify this next program.”

The new program has far fewer strictures. Businesses can receive a grant of up to $10,000 if they have experience and can prove hardship because of the pandemic, are located in the state, have an active business license as of March 1, have no more than 50 employees and have annual gross revenue of less than $4 million.

Nonprofits and arts and culture organizations are not subject to the employee limit. Arts and culture organizations are eligible for up to $20,000; lawmakers noted those groups have been particularly hard-hit by restrictions on large-scale live entertainment.

Funding is prioritized in the following order: disadvantaged business enterprises (those owned by women, minorities, veterans or people with disabilities), arts and culture organizations, chambers of commerce, other businesses and other nonprofits. 

“The thing that we're seeing in economic assistance programs around the country is that it makes sense to prioritize who gets funds first, but not to have eligibility criteria that prevent people from applying,” Conine said. “And the easier it is, the more businesses will do it.”

Businesses and nonprofits will receive the money directly, rather than the funds flowing to the landlord, as in the commercial rental assistance program. Grantees must state how they plan to use the money, but can spend it on a wide range of expenses, including payroll, rent, utilities and on inventory.

“The goal of the program is to be very, very, very flexible for businesses,” Conine said.

An application portal is expected to be available on the GOED website.