State Sen. Roberta Lange is sponsoring one of two film tax credit bills in the Legislature. (Photo: Richard Bednarski
The debate over whether to massively expand the state’s film tax credit program in hopes of transforming Las Vegas into “Hollywood East” has returned to the Nevada State Legislature. And, like with many sequels, the drama may be amped up.
State Sen. Roberta Lange is sponsoring Senate Bill 220, which over several years would expand the state’s film tax credit up to $83 million per year and establish the Nevada Studios Project at UNLV’s Harry Reid Research Park in the southwest part of the Las Vegas Valley. Meanwhile, Assemblymember Sandra Jauregui is sponsoring Assembly Bill 238, which would expand the state’s film tax credit to $80 million per year and establish the Summerlin Production Studios.
Jauregui introduced the film tax credit bill on Monday. Lange introduced hers on Wednesday.
“We have to bring these film bills together or they’re not going to get passed,” said Lange, theorizing that both bills will get stuck in the joint finance committee if they advance out of their initial chamber-specific committees.
Both film studio projects were proposed under the same bill during the 2023 Legislative Session. That bill, which Lange alone sponsored, sought $190 million in transferable film tax credits annually, which worked out to a staggering estimated price tag of $4.9 billion in tax breaks over 25 years. The bill never advanced out of committee.
This year’s duo of film tax credit proposals don’t change the in-perpetuity annual price tag by much. Together they propose $163 million in annual film tax credits, an astronomical jump from the current cap of $10 million annually.
Sony Pictures Entertainment and developer Howard Hughes Corporation are working together on the Summerlin studio bill with Jauregui, who could not be reached for comment Wednesday.
Lange told the Nevada Current she “graciously allowed” the Summerlin studio project to be included in her 2023 bill, which was originally focused only on the Nevada Studios Project with Birtcher Development and UNLV. Lange says she’d expected work to continue with Sony during the legislative interim.
“Then, they went radio silent and announced their own bill,” she said. “So they’re on a different path. I’m going to continue the path that I think is right for Nevadans. We can find common ground together.”
Warner Brothers/Discovery last year announced they would be a partner in the Nevada Studios Project but a few months later backed away. The parting was amicable, says Lange.
“They just didn’t really feel like our vision fit their vision,” she said, “and I can respect that. … I know they’re still interested in Nevada film, but I’m not sure what that looks like for them.”
The Nevada Studios Project still has an anchor to Hollywood: Manhattan Beach Studios Group, which has publicly attached to the project since spring of last year.
While not as recognizable a name as Warner Bros, MBS Group is a well established film and television studio operator. They work in 120 countries, 600 stages, and more than 1,000 productions per year, according to the company’s website. “The Mandalorian,” the “Avatar” sequels, and several Marvel Studios films were shot at the company’s 22-acre MBS Media Campus in Los Angeles.
Lange says workforce development and education are a big component of the Nevada Studios Project. The bill requires that the campus include a dedicated “media and technology lab” designed for use by colleges and K-12 schools for education and vocational training.
Critics of film tax credit programs often describe them as a “race to the bottom” egged on by large corporations who force states to compete against one another by offering larger and larger subsidies. They point to studies finding film tax credits offer a poor return on investment, making between 15 and 69 cents for every dollar spent.
Georgia, for example, has heavily invested in film tax credits, even earning the nickname “Hollywood of the South,” but only saw 19 cents for every dollar spent, according to an analysis done by Georgia State University.
Lange says she wants Nevada Studios Project to have a $1-to-$1 ROI.
Supporters of film tax credit programs typically rely on “ancillary” or indirect jobs, such as the drycleaners and caterers serving the productions, to boost their promised economic impact.
What’s next
Neither film tax credit bill has been scheduled for a committee hearing yet. Lange’s SB220 was referred to the Senate Committee on Revenue and Economic Development, while Jauregui’s AB238 was referred to the Assembly Committee on Revenue.
The Assembly bill is exempt from standard legislative deadlines, and the Senate bill is likely to receive the same exemption. That exemption gives lawmakers more wiggle room for discussing and advancing the bill between now and the end of the legislative session in early June.
Gov. Joe Lombardo, who gets to veto or approve any bill passed by the Legislature, expressed skepticism about expanding the film tax credit program when asked about it by KTNV earlier this month.