Lawmakers forge ahead with film tax credits bill, precarious economic outlook notwithstanding
Lawmakers appear open to advancing a proposal that would greenlight $1.8 billion in tax breaks to the film industry over 15 years because the proposal would give nothing away in the upcoming two years.
Assembly Bill 238 would massively expand Nevada's film tax credit program to support the build out and operation of a 31-acre film hub currently referred to as the Summerlin Production Studios Project after the Las Vegas neighborhood where it would be located. Sony Pictures, Warner Bros Entertainment, and Howard Hughes Holdings are attached to the project.
Largest public subsidy in state history makes legislative debut
The bill, which received a policy hearing in early February, was heard by the Assembly's finance committee on Friday.
AB 238 would set aside $120 million in film tax credits annually for 15 years — $95 million for productions at the Summerlin studio and $25 million for productions not tied to the studio. That's a twelvefold increase over the state's current film tax credit program, which is capped at $10 million annually.
But the increase wouldn't kick in until July 2028. That means the Legislature does not have to consider the $95 million in tax credits as part of the biennium budget it is currently working on Lawmakers would only have to consider a relatively small $206,000 fiscal note submitted by the Governor's Office of Economic Development, whose Nevada Film Office wants additional staff to administer the program.
'This has no impact on the current budget,' emphasized Assemblymember Sandra Jauregui, who is sponsoring the bill with Assemblymember Danielle Monroe-Moreno.
But at least one lawmaker raised the possibility that economic uncertainties may linger beyond the upcoming biennium cycle.
'Let's say that we get yet another Economic Forum with a similar outlook that we had last week,' said Assemblymember Natha Anderson, referring to a $151 million reduction in Nevada's expected revenue forecast amid sharp economic volatility driven by Trump administration economic policies. 'Is this date set in stone? Or will there be discussion about possibly pushing it back again?'
Jauregui responded that an amendment is currently being drafted proposing 'additional guardrails.' She did not elaborate, saying the language is still being finalized.
Legislative staff noted that $110 million, the amount the $10 million program would expand by, represents about 1.8% of the state general fund after tax credits.
As lawmakers mull massive expansion of program, WWE offers glimpse of how film tax credits work
Lawmakers in the hearing discussed WrestleMania 41 and related events, which last month was approved to receive $4.2 million in transferable film tax credits. As the Nevada Current reported last month, Wrestlemania's application illuminates how the program currently operates.
Assemblymember Shea Backus asked legislative staff what the WWE would have received under the provisions of AB 238. The bill, in addition to raising the annual cap, also changes the calculations used to determine the amount of transferable film tax credits each production can receive.
Chief Principal Deputy Fiscal Analyst Michael Nakamoto calculated that Wrestlemania would have qualified for $8.3 million in transferable film tax credits, nearly double what it received under the program as it exists today.
Backus noted that $8.3 million exceeds the amount WWE estimated it would spend on local labor and businesses. On its end, WWE estimates that its Wrestlemania events generate $200 million in economic activity for the host city.
Jauregui pushed back on the narrative of the bill as a giveaway, saying it requires investment of private dollars into the state and is a job creation bill.
'The legislation will generate $3 billion in annual economic activity,' she claimed. 'That is Wrestlemania 15 times a year.'
Added Monroe-Moreno, 'We have a responsibility to find ways to diversify our revenue streams in the state of Nevada. As the fiscal leader of this committee, I would have never put my name on a bill if I didn't believe it provided a pathway for us to do that.'
AB 238 is one of two film tax credit expansion bills introduced this legislative session. The other is Senate Bill 220, sponsored by Democratic state Sen. Roberta Lange.
SB 220 received a policy hearing last month and was referred to the Senate Finance Committee where it has not been scheduled for a hearing. Lange could not be reached for comment on the status of her bill.
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