SB220 - Enacts the Nevada Film Infrastructure, Workforce Development, Education and Economic Diversification Act. (BDR S-18)

S.B. 220 - *SB220* SENATE BILL NO. 220–SENATOR LANGE FEBRUARY 19, 2025 ____________ Referred to Committee on Revenue and Economic Development SUMMARY—Enacts the Nevada Film Infrastructure, Workforce Development, Education and Economic Diversification Act. (BDR S-18) 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 Film Infrastructure, Workforce Development, Education and Economic Diversification 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; 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; 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 in the Account; 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 – 2 – - *SB220* picture or other qualified production, based upon qualified direct production 3 expenditures made for the purchase, rental or lease of personal property or services 4 from a Nevada business. (NRS 360.758-360.7598) This bill revises provisions 5 governing these transferable tax credits and enacts the Nevada Film Infrastructure, 6 Workforce Development, Education and Economic Diversification Act to authorize 7 film infrastructure transferable tax credits for qualified productions produced at the 8 Nevada Studios Project at the Harry Reid Research and Technology Park, which is 9 owned by the University of Nevada, Las Vegas Research Foundation. 10 Sections 1-18 of this bill enact the Nevada Film Infrastructure, Workforce 11 Development, Education and Economic Diversification Act, which provides for 12 film infrastructure transferable tax credits to be issued to production companies that 13 produce qualified productions, in whole or in part, at the Nevada Studios Project, as 14 defined in section 8. Section 10 requires the Office of Economic Development to 15 enter into a development agreement with the lead participant for the Project and to 16 establish certain criteria that the Project is required to satisfy in exchange for 17 production companies located at the Project to be eligible for film infrastructure 18 transferable tax credits. Section 12: (1) authorizes a production company located at 19 the Project that has obtained the written approval of the lead participant under 20 section 11 to apply for film infrastructure transferable tax credits for qualified 21 productions produced, in whole or in part, at the Project; and (2) authorizes such 22 credits to be used against the modified business tax, insurance premium tax or 23 gaming license fee, or any combination of these taxes and fees. Section 13 24 establishes the qualified direct production expenditures which are the basis for 25 calculating the amount of film infrastructure transferable tax credits, including, 26 without limitation, purchases, leases and rentals of property or services from a 27 Nevada business, wages and fringe benefits paid to employees who are Nevada 28 residents for services on the qualified production, certain fees paid to producers and 29 amounts paid to certain corporations or companies for the services of certain 30 persons on the qualified production. Section 14 provides that the base amount of 31 film infrastructure transferable tax credits is the sum of: (1) 35 percent of the 32 qualified direct production expenditures paid to Nevada residents for services in 33 connection with the qualified production; and (2) 30 percent of the amount of all 34 other qualified direct production expenditures. Under section 14: (1) the amount of 35 film infrastructure transferable tax credits for which a production company is 36 eligible is reduced by specified percentages if, after certain periods, the number of 37 Nevada residents who are below-the-line personnel of the qualified production is 38 less than certain percentages; (2) film infrastructure transferable tax credits may be 39 reduced by the amount of any damages incurred by the State or a political 40 subdivision of this State as a result of a qualified production; and (3) film 41 infrastructure transferable tax credits may be withheld for certain violations of law. 42 Section 15: (1) establishes the maximum amount of film infrastructure transferable 43 tax credits that may be issued pursuant to sections 1-18 during each 12-month 44 period of the development period and for each fiscal year thereafter; (2) authorizes 45 50 percent of the amount of film infrastructure transferable tax credits that are 46 authorized for the development period or for a fiscal year following the 47 development period, but are not approved, to be carried forward and made available 48 for approval in subsequent fiscal years; and (3) prohibits the issuance of film 49 infrastructure transferable tax credits for a fiscal year that begins more than 15 50 years after the Project receives its first certificate of occupancy. Section 16 51 establishes the time within which a production company that produces a qualified 52 production is required to submit to the Office and the Department of Taxation any 53 audits or other information required to determine the eligibility of the production 54 company for film infrastructure transferable tax credits. Section 17 requires a 55 production company to repay film infrastructure transferable tax credits under 56 – 3 – - *SB220* certain circumstances. Section 18 requires certain reports to be made to the 57 Governor and the Legislature concerning film infrastructure transferable tax credits. 58 Sections 19-24 of this bill make various changes to the existing law governing 59 the noninfrastructure transferable tax credits for motion picture and other qualified 60 productions. (NRS 360.758-360.7598) Section 19: (1) provides that digital media 61 productions are qualified productions for the purposes of eligibility for film 62 infrastructure transferable tax credits and noninfrastructure transferable tax credits; 63 and (2) clarifies that media productions solely produced for social media are not 64 eligible for such transferable tax credits. Section 20 revises certain criteria for a 65 qualified production to be eligible for noninfrastructure transferable tax credits. 66 Section 21 increases the base amount of noninfrastructure transferable tax credits 67 for an application submitted in each fiscal year beginning on or after July 1, 2025, 68 and ending before July 1, 2043, from 15 percent of the qualified direct production 69 expenditures to the sum of: (1) 35 percent of the qualified direct production 70 expenditures paid to Nevada residents for services in connection with the qualified 71 production; and (2) 30 percent of the amount of all other qualified direct production 72 expenditures. Section 21 also requires reductions to that base amount under certain 73 circumstances. Section 22 temporarily increases from $10,000,000 to $15,000,000 74 the total amount of noninfrastructure transferable tax credits for motion picture and 75 other qualified productions that may be issued under the existing program for each 76 fiscal year beginning on or after July 1, 2028, until June 30, 2043. Section 23 77 makes conforming changes to update a reference that was renumbered in section 20 78 and to consistently refer to the existing program of transferable tax credits as 79 noninfrastructure transferable tax credits. Section 24 makes conforming changes so 80 that the information required to be reported by the Office concerning 81 noninfrastructure transferable tax credits is similar to the information required to be 82 reported by the Office concerning film infrastructure transferable tax credits. 83 Sections 25-32 of this bill establish a program to pay certain costs related to the 84 Nevada Media and Technology Lab and to provide grants to certain organizations 85 that provide education and vocational training for workforce development for the 86 production of motion picture and other qualified productions. Section 30 creates 87 the Account for Nevada Film, Media and Related Technology Education and 88 Vocational Training for the purpose of paying certain costs related to the Nevada 89 Media and Technology Lab and to make grants to certain entities and organizations 90 that provide education and vocational training for such workforce development. 91 Sections 12 and 20 require a production company that is issued transferable tax 92 credits for a qualified production to pay to the Office an amount of money equal to 93 10 percent of the amount of transferable tax credits issued to the qualified 94 production, and require the Office to deposit that money with the State Treasurer 95 for credit to the Account. Section 31 creates and provides for the composition of 96 the Board for Nevada Film, Media and Related Technology Education and 97 Vocational Training within the Office of Economic Development. Section 32 98 requires the Board to: (1) establish the procedures for a person or entity to apply for 99 a grant of money from the Account, the criteria to be used to determine whether to 100 approve an application for a grant from the Account to an applicant and the 101 requirements for reports by recipients of such grants concerning the use of the 102 grants; (2) prohibits the making of a grant from the Account unless the Board 103 approves the application for the grant; and (3) requires a recipient of a grant from 104 the Account to adopt and implement a community benefits program that satisfies 105 certain requirements. 106 – 4 – - *SB220* THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. This act may be cited as the Nevada Film 1 Infrastructure, Workforce Development, Education and Economic 2 Diversification 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 need to improve the education and 6 training of the workforce in the Las Vegas Metropolitan Area and to 7 diversify the economy of the Area, as indicated by the impact of the 8 COVID-19 pandemic on the Area. The Harry Reid Research and 9 Technology Park has been identified as a location in the Las Vegas 10 Metropolitan Area for a project that can address the needs of the Las 11 Vegas Metropolitan Area for workforce education and training and 12 economic diversification. 13 (b) Land at the Harry Reid Research and Technology Park will 14 be allocated for an educational and vocational training center, to be 15 known as the Nevada Media and Technology Lab, which will 16 provide workforce development, education and economic 17 diversification by providing career pathways in film, video game 18 publishing, defense, health care and other industries identified by 19 the UNLV Research Foundation through the Creative Technology 20 Initiative at the University of Nevada, Las Vegas, and the Video 21 Game Publishing Design Program Initiative at the University of 22 Nevada, Las Vegas. 23 (c) Land at the Harry Reid Research and Technology Park will 24 also be allocated for large-scale facilities for the location of 25 companies that produce motion pictures and other qualified 26 productions in this State, which will create high-paying jobs in that 27 industry and diversify the economy of the Las Vegas Metropolitan 28 Area and this State as a whole. 29 (d) Because the Las Vegas Metropolitan Area and the Harry 30 Reid Research and Technology Park is the only area in this State 31 that is appropriate and suitable for the Nevada Media and 32 Technology Lab and the development of large-scale projects to 33 develop large-scale facilities for the location of companies that 34 produce motion pictures and other qualified productions and has all 35 the special attributes, conditions and resources that are essential to 36 support such facilities, it is necessary to enact a law of local and 37 special application to promote, develop and secure the advantages of 38 the local and special characteristics and circumstances within the 39 Las Vegas Metropolitan Area, which are found nowhere else in this 40 State, and to benefit the residents of the Las Vegas Metropolitan 41 Area. 42 – 5 – - *SB220* (e) Therefore, given that a law of local and special application is 1 necessary to promote, develop and secure the advantages of the 2 local and special characteristics and circumstances within the Las 3 Vegas Metropolitan Area, which are found nowhere else within this 4 State, and given that such a law is necessary to benefit the residents 5 of that local and special area, a general law cannot be made 6 applicable to the purposes, objects, powers, rights, privileges, 7 immunities, liabilities, duties and disabilities set forth in the Nevada 8 Film Infrastructure, Workforce Development, Education and 9 Economic Diversification Act. 10 2. The Legislature further finds and declares that as a result of 11 the construction of large-scale facilities for the production of motion 12 pictures and other qualified productions in this State and the direct, 13 indirect and induced economic benefits of such productions in this 14 State, the enactment of the Act will achieve a bona fide social or 15 economic purpose and the economic benefits of the issuance of the 16 transferable tax credits to encourage the location of large-scale 17 facilities for the production of motion pictures and other qualified 18 productions in this State are expected to ex [Text truncated for display. Full text available on LegiScan.]