AB238 - Enacts the Nevada Studio Infrastructure Jobs and Workforce Training Act. (BDR S-63)

EXEMPT (Reprinted with amendments adopted on May 30, 2025) SECOND REPRINT A.B. 238 - *AB238_R2* ASSEMBLY BILL NO. 238–ASSEMBLYMEMBERS JAUREGUI AND MONROE-MORENO FEBRUARY 17, 2025 ____________ Referred to Committee on Revenue SUMMARY—Enacts the Nevada Studio Infrastructure Jobs and Workforce Training Act. (BDR S-63) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Yes. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to economic development; enacting the Nevada Studio Infrastructure Jobs and Workforce Training Act; requiring the Office of Economic Development to enter into a development agreement to establish certain criteria for the development of infrastructure for the production of motion pictures and other qualified productions and other new capital investment in this State; establishing certain penalties if the development does not meet certain requirements for new capital investment and expenditures for the production of motion pictures and other qualified productions; establishing requirements for a production company located at such a development to be eligible for film infrastructure transferable tax credits for qualified productions produced at the development; providing for the calculation of the amount of film infrastructure transferable tax credits; requiring the creation of a production studio entertainment district; revising provisions governing noninfrastructure transferable tax credits for motion pictures and other qualified productions produced in this State; authorizing an additional amount of noninfrastructure transferable tax credits; establishing the Account for Nevada Film, Media and Related Technology Education and Vocational Training and a board to approve distributions from the Account; providing for the distribution of money from the Account – 2 – - *AB238_R2* to certain entities and organizations that provide education and vocational training to develop a workforce for the production of qualified productions in this State; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law establishes a program for the issuance of transferable tax credits 1 by the Office of Economic Development to the production company of a motion 2 picture or other qualified production, based upon qualified direct production 3 expenditures made for the purchase of personal property or services from a Nevada 4 business. (NRS 360.758-360.7598) This bill revises provisions governing these 5 transferable tax credits and enacts the Nevada Studio Infrastructure Jobs and 6 Workforce Training Act to authorize film infrastructure transferable tax credits for 7 qualified productions produced at the site of the Summerlin Production Studios 8 Project. 9 Sections 1-16 of this bill enact the Nevada Studio Jobs and Workforce Training 10 Act, which provides film infrastructure transferable tax credits for production 11 companies located within the Summerlin Production Studios Project, as defined in 12 section 8. Section 9 requires the Office of Economic Development to enter into a 13 development agreement with the lead participant of the Project to establish: (1) 14 certain criteria that the Project is required to satisfy in exchange for production 15 companies located at the Project to be eligible for film infrastructure transferable 16 tax credits; and (2) certain requirements for new capital investment in this State and 17 the generation of direct production expenditures in this State, which the Project 18 must meet, with certain exceptions, to avoid penalties specified in section 9. 19 Section 10: (1) authorizes production companies located at the Project to apply, on 20 or after June 1, 2026, to the Office for film infrastructure transferable tax credits for 21 qualified productions produced, in whole or in part, at the Project; and (2) 22 authorizes such credits to be used against the modified business tax, insurance 23 premium tax or gaming license fee, or any combination of these taxes and fees. 24 Section 11 establishes the qualified production expenditures which are the basis for 25 calculating the amount of film infrastructure transferable tax credits, including, 26 without limitation: (1) purchases and rentals of property or services from a Nevada 27 business; (2) wages and fringe benefits paid to employees who are Nevada 28 residents or other personnel who perform services in this State on the qualified 29 production; (3) certain compensation paid to producers in their capacity as 30 producers; and (4) amounts paid to personal service corporations for the services of 31 certain persons on the qualified production. Section 12 of this bill provides that the 32 base amount of film infrastructure transferable tax credits is 30 percent of the 33 amount of qualified direct production expenditures calculated under section 11, 34 with certain reductions if the production company does not satisfy certain criteria 35 for employing Nevada residents as below-the-line personnel or employing or 36 offering training or work opportunities to members of traditionally 37 underrepresented groups. Section 13: (1) limits the total amount of film 38 infrastructure transferable tax credits issued pursuant to sections 1-16 to 39 $95,000,000 for each fiscal year beginning on or after July 1, 2028; and (2) 40 prohibits the approval of an application for film infrastructure transferable tax 41 credits if the application is submitted in a fiscal year that begins on or after July 1, 42 2043. Section 14 requires a production company to: (1) commence principal 43 photography within a certain period of time after the Office approves an application 44 for a certificate of eligibility for film infrastructure transferable tax credits; (2) 45 complete the qualified production within 18 months after the date of 46 commencement of principal photography, except that the Office may extend this 47 period for not more than 6 months; and (3) submit certain required information 48 – 3 – - *AB238_R2* within the required period. Section 15 requires a production company to repay film 49 infrastructure transferable tax credits under certain circumstances. Section 15.7 50 requires the lead participant in the Project to submit certain reports to the Governor, 51 the Legislature and the Office, and requires the Office to post such reports on its 52 Internet website. Section 16 requires certain reports to be made to the Legislature 53 concerning film infrastructure transferable tax credits. 54 Sections 17-25 of this bill make various changes to the existing law governing 55 the noninfrastructure transferable tax credits for motion picture and other qualified 56 productions. (NRS 360.758-360.7598) Section 17 changes references to “extras” in 57 a qualification production to “background actors.” Section 18: (1) provides that 58 digital media productions are qualified productions for the purposes of eligibility 59 for film infrastructure transferable tax credits and noninfrastructure transferable tax 60 credits; and (2) clarifies that media productions solely produced for social media 61 are not eligible for such transferable tax credits. Section 19 revises the criteria to be 62 eligible for noninfrastructure transferable tax credits to be the same as the criteria 63 for film infrastructure transferable tax credits by: (1) removing the requirement that 64 a certain percentage of direct production expenditures be incurred in this State and, 65 instead, requiring that at least 50 percent of the total principal photography days 66 take place in this State or a certain amount of qualified direct production 67 expenditures be incurred in this State; and (2) requiring a production company to 68 have a workforce plan that establishes certain goals and provide to the Office a 69 final assessment of whether the production company met or made a good faith 70 effort to meet those goals. Section 20 revises the expenditures and costs that may 71 serve as a basis for noninfrastructure transferable tax credits. Section 21: (1) 72 increases the base amount of transferable tax credits from 15 percent of the 73 qualified direct production expenditures to 30 percent of the qualified direct 74 production expenditures, for an application submitted in each fiscal year beginning 75 on or after July 1, 2028, and ending before July 1, 2043; and (2) provides for 76 certain reductions to that base amount during that period. Section 22 makes certain 77 provisions of existing law relating to the calculation of noninfrastructure 78 transferable tax credits inapplicable for period beginning on July 1, 2028, and 79 ending on June 30, 2043. Section 23 temporarily increases from $10,000,000 to 80 $25,000,000 the total amount of noninfrastructure transferable tax credits for 81 motion picture and other qualified productions that may be issued under the 82 existing program for each fiscal year beginning on or after July 1, 2028, until 83 June 30, 2043. Sections 24 and 25 make conforming changes so that 84 noninfrastructure transferable tax credits are administered and reported in the same 85 manner as film infrastructure transferable tax credits. 86 Section 15.3 requires the Clark County Board of County Commissioners to 87 create a production studio entertainment district for the purpose of enhancing early 88 childhood education opportunities, including prekindergarten, for children in the 89 Clark County School District. Under section 15.3, the boundaries of the district are 90 required to be entirely within the unincorporated areas of Clark County and include 91 only parcels of land that are located within the boundaries of the Summerlin 92 Production Studios Project other than parcels on which a business holding a gaming 93 license is located. Section 15.3 requires certain taxes on transient lodging, certain 94 property taxes and certain sales and use taxes imposed in the district to be pledged 95 and distributed to the Clark County School District and used by the Clark County 96 School District solely for the purposes of prekindergarten programs in the Clark 97 County School District. Finally, section 15.3 requires the Clark County School 98 District to submit annual reports to the Office concerning the use of money 99 distributed to Clark County School District under section 15.3. 100 Sections 26-33 of this bill establish a program to provide grants to certain 101 organizations that provide education and vocational training for workforce 102 development for the production of motion pictures and other qualified productions. 103 – 4 – - *AB238_R2* Section 31 establishes the Account for Nevada Film, Media and Related 104 Technology Education and Vocational Training for the purpose of allocating 105 money to certain entities and organizations that provide education and vocational 106 training for such workforce development. Sections 10 and 19 require a production 107 company that is issued transferable tax credits for a qualified production to pay to 108 the Office an amount of money equal to 1 percent of the amount of transferable tax 109 credits issued to the qualified production, and requires the Office to deposit that 110 money with the State Treasurer for credit to the Account. Section 32 creates and 111 provides for the composition of the Board for Nevada Film, Media and Related 112 Technology Education and Vocational Training within the Office of Economic 113 Development. Section 33: (1) requires the Board to establish the procedure for a 114 person or entity to apply for a grant of money from the Account, the criteria to be 115 used to determine whether to approve an application for a grant from the Account 116 to an applicant and the requirements for reports by recipients of such grants 117 concerning the use of the grants; (2) prohibits the making of a grant from the 118 Account unless the Board approves the application for the grant; and (3) requires a 119 recipient of a grant from the Account to adopt and implement a community benefits 120 program that satisfies certain requirements. 121 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Sections 1 to 16, inclusive, of this act may be cited 1 as the Nevada Studio Infrastructure Jobs and Workforce Training 2 Act. 3 Sec. 2. 1. The Legislature hereby finds and declares that: 4 (a) The Las Vegas Metropolitan Area is the largest metropolitan 5 area in this State and has a site available to be developed to create 6 large-scale facilities for the location of companies that produce 7 motion pictures, television programs and other qualified productions 8 in this State. The establishment of such a studio campus will create 9 jobs in Nevada’s creative industries and diversify the economy of 10 this State. 11 (b) The Las Vegas Metropolitan Area possesses unique 12 geographic, economic and resource advantages that make it 13 especially suitable for a project of this magnitude. Because of these 14 unique local conditions, it is necessary to enact a law of local and 15 special application to promote and secure the benefits of a large- 16 scale film and media production development in Southern Nevada 17 for the benefit of the entire State. 18 (c) Because of these special characteristics and circumstances in 19 Southern Nevada, a general law cannot be made applicable to 20 achieve the purposes of this Act and a law of local and special 21 application is necessary to promote and secure the advantages of the 22 local and special characteristics and circumstances within the Las 23 Vegas Metropolitan Area. 24 – 5 – - *AB238_R2* 2. The Legislature further finds and declares that the content 1 production industry has presented an ambitious and visionary plan 2 for all of Southern Nevada, which leverages the region’s unique 3 geographic assets, economic capabilities and infrastructural 4 advantages. The industry’s vision will promote the generation of 5 thousands of high-quality, high-paying jobs, billions of dollars in 6 incremental capital investments and billions more in new economic 7 output and ongoing spending. This plan transcends the development 8 of a mere studio complex, proposing instead a dynamic production 9 campus that is intended to serve as the nucleus for a robust, 10 sustainable industrial cluster. The Legislature recognizes that 11 realizing this vision depends fund [Text truncated for display. Full text available on LegiScan.]