After months of discussions, the launch of a fancy website and headlines about film companies interested in coming to Nevada, two competing measures to expand the state’s transferable film tax credits were introduced this week.

Sen. Roberta Lange (D-Las Vegas) and Assm. Sandra Jauregui (D-Las Vegas) developed the distinct proposals with different partners. But both lawmakers said there’s only room for one film tax credit bill.

“I don't think there's an avenue where two bills can move forward,” Jauregui said. “I've told Sen. Lange, she's the genesis of film tax credits. So, whatever happens, if these merge into one bill, I'm happy to work with her and let her take the lead.”

Lange said she and Jauregui can merge the two bills.

“The bottom line is, if we don't get these bills together, they're dead,” Lange said. “I worked to make my bill be the best it can, to put us in a position that we can bring them together. And I feel confident that we'll be able to make that happen.”

Though the measures have generated buzz, Gov. Joe Lombardo said he’s not a yes or no on expanding film tax credits but needs to see the revenue and cost estimates for the program.

Assembly Speaker Steve Yeager (D-Las Vegas) echoed the same sentiment during a conversation with reporters Thursday.

“It's got to really make sense in terms of revenue coming in, jobs created,” Yeager said. “We're going to vet that legislation. And make the best decision that we can.”

Similar motivations

Jauregui, who introduced one of the measures, AB238, Monday, said the most significant reason she’s carrying the bill is to create 19,000 union jobs, 15,000 permanent careers and a new industry to grow Nevada’s economy. 

Lange said her measure, SB220, which was introduced Wednesday, is also a way to grow the economy and prevent the state from relying primarily on tourism dollars. Because of that overdependence, Nevada was particularly hard-hit economically by the pandemic.

“People are excited that we can do something different,” Lange said. “That we have the return so that we can pay for health care, we can pay for housing.”

The pitch for more film tax credits stems from a proposal brought by Lange in 2023 that would have vastly expanded the state’s film tax credit program. The measure did not pass out of either legislative chamber. 

Though economists have largely downplayed the economic benefits of film tax credits, with programs in other states not providing much return on investment, Jauregui said her bill reflects lessons learned from different states and “maximizes the return to Nevada” by developing industries and careers.

“Nevada has unique opportunities and unique challenges,” Jauregui said. “That’s why we’ve developed this unique approach that requires a minimum of $400 million in infrastructure development, tens of millions in workforce development and workforce pipeline programs that build careers with the most stringent local hiring requirement in the country.”

What are the bills proposing?

Jauregui’s film tax credit expansion measure proposes earmarking up to $80 million in annual transferable tax credits for productions at a yet-to-be-built studio in Las Vegas’ Summerlin community and increasing the state’s existing $10 million annual transferable tax credits for film productions to $25 million — a pot of money that would be available to all other productions. The funding would sunset in 15 years.

Lange’s measure would increase the state’s existing $10 million annual transferable tax credits for film productions to $15 million, an increase that would end after 15 years. Lange’s bill proposes setting aside $83 million for annual transferable tax credits for productions at a yet-to-be-built studio in Southern Nevada at the Harry Reid Research and Technology Park.

Both proposals’ expansions would be more than an eightfold increase from the annual $10 million in transferable tax credits Nevada law currently allows, which caps credits at $6 million per production. The amount of credits issued for production is primarily based on a percentage of wages and qualified production costs.

Under Jauregui’s proposed bill, there would be no per-production cap on studios that conduct production at the preferred studio and tap into the $80 million in annual transferable tax credits. Still, existing caps would remain in place for the $25 million fund available to companies that aren’t using the preferred studio. The bill also specifies that only Nevada wages count as a qualified expense. Lange’s bill has the same stipulations for caps and qualified expenses.

The tax credits can be used to offset a company’s tax liability, reducing the amount of taxes owed by the amount of the credits, and are transferable, meaning a company can sell them for cash.

A 2024 analysis of the state’s film tax credit program by the Nevada Governor’s Office of Economic Development found that tax credits given to 12 productions during the 2024 fiscal year generated about $15 in economic impact per tax credit dollar. Economic impact accounts for direct spending, the indirect spending of vendors in the economy and the “induced” impact of people spending wages in the economy.

Differing studios and projects

Jauregui’s bill stipulates that the Summerlin Studio Project would be on land owned by developer Howard Hughes Holdings Inc. in Southern Nevada. Howard Hughes has received land use approval from the county to apply for building permits if the bill passes.

Though the legislation does not name a studio partner, sources who spoke on condition of anonymity because they are not authorized to publicly discuss the developments indicate that Sony Pictures Entertainment would manage, operate and oversee the films and studio services at the project.

Lange has been creating her bill with Birtcher Development and the Manhattan Beach Studios Group, a film and studio brokerage firm. 

Though Lange’s bill doesn’t name Birtcher Development or the Manhattan Beach Studios Group directly, it notes that if the bill passes, the state will enter into a development agreement “with the lead participant” of the Nevada Studios Project. The Nevada Studios Project would be housed at the Harry Reid Research and Technology Park in Las Vegas.

Lange said the intent is for Birtcher to be the lead participant and develop the studio infrastructure, and the Manhattan Beach Studios would manage, operate and oversee the films and studio services at the project.

Warner Brothers Discovery studio, which recently dropped a partnership with Birtcher Development, has also indicated that it’s interested in expanded film tax credits in Nevada, though it’s unclear if the company is a part of any agreement.

Qualifying for the credits

Under Jauregui’s bill, the $80 million in film infrastructure transferable tax credits for the Summerlin Production Studios Project would become available on or after July 1, 2028. 

To receive that funding, the measure stipulates that construction on the Summerlin Studios Project would need to be completed no later than June 30, 2028, and have a capital investment of at least $400 million. The intent is for that $400 million to come from Howard Hughes and Sony Pictures.

Lange’s bill would require the Governor’s Office of Economic Development to enter into a development agreement with the “lead participant” of the Nevada Studios Project no later than 120 days after July 1, 2025. 

The agreement would require the participant to make a new capital investment of at least $150 million by Dec. 31, 2028, and a cumulative total of at least $300 million by Dec. 31, 2029, to be eligible for the funds. 

The available transferable tax credits would begin at $48 million annually, eventually ramping up to $83 million.

Under both proposals, only 50 percent of unused credits can roll over for one fiscal year. The state’s existing film tax credit program currently rolls 100 percent of the unused allocation.

Eligibility for the tax credits

To be eligible for any of the transferable tax credits under Jauregui and Lange’s bills, studios would need to have at least 50 percent of the photography days take place in Nevada.

The amount of transferable tax credits available to a production studio would be 30 percent of spending on qualified expenditures, including purchases and rental of property or services from Nevada businesses and wages and “fringe benefits” paid to employees who are Nevada residents. The measures stipulate the credits could be reduced if a production company does not satisfy specific criteria for employing Nevada residents.

Additional tax credits are available to studios whose "below-line" workforce — consisting of the technical and logistical crew members responsible for the day-to-day operations of a film — is made up of Nevadans. Jauregui’s bill specifies that amount as 50 percent.

Jauregui and Lange’s legislation also stipulate diversity requirements.

Under the bills, the project must hire a workforce that reflects the diversity of Nevada, including in age, gender and gender identity or expression. Research indicates this is likely one of the first times in the country that lawmakers are seeking to impose a diversity requirement for “above-the-line” film workers, such as key creative and financial roles, including producers, directors, writers and actors.

Jauregui’s measure specifies that diversity includes racial and ethnic minorities and members of traditionally underrepresented groups, including women, people identifying as LGBTQ+, people with disabilities, veterans and previously incarcerated people.

Workforce development

Part of Lange’s proposal is establishing a Nevada Media and Technology Lab housed within the Nevada Studios Project on land at the Harry Reid Research and Technology Park. The lab would provide workforce development, education and training. The bill notes that UNLV, the College of Southern Nevada, Nevada State University, the Clark County School District “and any other educational organization” could participate in the project.

As proposed, Jauregui’s bill would also include a “Nevada Partners Vocational Training Studio” on land owned by Nevada Partners, adjacent to the Culinary Training Facility on West Lake Mead Boulevard, to develop a job training pipeline program for the film industry, as well as fellowships and partnerships with small businesses. The partners must invest at least $8 million in the training studio before receiving any of the $80 million in credits. 

The two proposals would also establish an account to provide grants for workforce development for producing films.

Under Jauregui’s bill, production companies issued transferable tax credits would deposit an amount equal to 1 percent of the transferable tax credits issued into the account overseen by a new board responsible for allocating grant funding from the account. Lange’s bill would require that to be 10 percent.

The funding is intended for grants for universities, schools and unions.

In addition, Jauregui’s bill stipulates that five years after the development agreement, Sony Pictures and Howard Hughes would need to contribute $6 million to the Clark County Redevelopment Agency’s cultural center that’s being established to support the arts, cultural programs and training for small businesses.