ANNOUNCEMENT 01 Jan 2011In January 2011, a US state government announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
The State of Nevada created in 2011 a Catalyst Fund, administered by the Governor's Office of Economic Development, to provide up to $10 million in state support to private businesses. The administering agency selects businesses to expand their current operations or move to Nevada.
One of the first awards under the program provided $1.2 million over three years to SolarCity, an alternative energy company. This led the Nevada Policy Research Institute's Center for Justice and Constitutional Litigation to file a lawsuit on behalf of firms that compete with SolarCity, charging that the Catalyst Fund violates the state constitution. Article 8, Section 9 of that constitution provides that, 'The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.' The case is currently in litigation.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.