Senate panel considers expansion of Nevada film tax program

By Casey Harrison (contact)

Thursday, June 1, 2023 | 2 a.m.

CARSON CITY — Nevada lawmakers are considering a proposal to vastly expand Nevada’s film tax program, hearing Wednesday from film executives and analysts about how the plan would aid in bolstering the state’s tourism-dependent economy.

“You’re talking about thousands and thousands of jobs, very high-paying jobs,” actor and Las Vegas resident Mark Wahlberg told reporters after the hearing. He earlier testified in support of the bill.

“We want to create as much opportunity as possible to uncover new and exciting talents. There’s so many amazing storytellers out there, (and) some amazing stories to be told.”

The Senate Committee on Finance spent more than four hours hearing testimony Wednesday on Senate Bill 496, which would provide $190 million annually for transferable tax credits over the next 20 years that could be used to offset up to 30% of production and construction costs for films, doubling the state’s current threshold.

These credits would be awarded to a film studio upon completion of a project.

If passed in committee, the measure would then advance to the Senate floor for a vote before heading to the Assembly, though lawmakers have just until Monday, the end of the current legislative session, to send the bill to Gov. Joe Lombardo’s desk.

If approved, the state would enter into agreements with private parties to develop two production sites in Las Vegas — on the campus of UNLV and another in Summerlin. Sony Pictures Entertainment has announced it intended to commit $1 billion over the next 10 years to help establish the Summerlin production site.

Detractors say the bill would be a handout to a multimillion-dollar production studio and take away from funding that could be used to bolster the state’s struggling education system.

Between the Summerlin and UNLV campuses, the project could support up to 26,200 jobs — including 14,500 construction jobs, 4,700 skilled on-site jobs and 7,000 indirect positions, according to an analysis from RCG Economics, which presented its findings to the committee. RCG was retained by developers for both the Summerlin and UNLV campuses.

The state could expect to collect $48 million in tax revenue from the construction of the studio campuses and an additional $89.1 million annually from operations, RCG said.

David O’Reilly, chief executive officer of the Howard Hughes Corp., the land developer behind Summerlin’s master planned community, told lawmakers the developments would ensure economic growth for “generations,” and that if passed.

“We’re putting the full weight of our firm behind this to do whatever we can to diversify the local economy,” O’Reilly told reporters alongside Wahlberg. “I think this bill is clearly drafted to keep us competitive with any other location not just domestically, but internationally. And the demand for studio space has never been higher.”

Unlike Georgia Louisiana and Michigan — which in recent decades have passed film tax credit expansions of their own — Wahlberg and O’Reilly said Las Vegas’ proximity to Hollywood was a clear distinction that would work in the state’s favor to retain studios on a permanent basis.

“The structure of the film tax credits, I think, makes us highly competitive,” O’Reilly said. “Among the various programs out there, I think the location and proximity is what gives us a massive competitive advantage.”

While big studios have filmed in Nevada previously, O’Reilly emphasized most of what’s been filmed here has only been for specific scenes and were seldom an entire production.

“It hasn’t created the consistency of jobs that we need 12 months a year,” O’Reilly said. “It hasn’t created the training facilities they’re going to teach these skilled workers to work in this industry.”

O’Reilly continued: “To date, when you have someone that’s grown up in Southern Nevada, or anyone in Nevada that’s interested in the film industry, when they graduate, they move on. We want to keep them here. We want to keep them home to develop this homegrown talent and permanent studios to make sure that this is an industry that isn’t here once in a while, but in perpetuity.”

The bill would also establish the Board for Nevada Film, Media and Related Technology Education and Vocational Training, which would be authorized to distribute funds from an account that would also be established by the bill for workforce training and development relevant to studio work.

Such an account — of which 55% would be allocated for educational and vocational training — would be administered by the Governor’s Office of Economic Development. Provisions in the bill call for tax incentives to be decreased if less than 50% of so-called below-the-line positions (meaning technical crew workers who do not provide input for a production project) are not Nevada residents.

O’Reilly added that the Howard Hughes Corp. was committing $8 million to build a teaching facility to train technical workers such as camera and microphone operators and said Sony would commit to having a “strong emphasis” on hiring local film students for internship programs and other vocational training initiatives.

Wahlberg, who moved to Las Vegas in October, has already filmed one movie, “The Family Plan,” in Nevada and will begin shooting another — which he did not name — in the coming months. And while these productions won’t be able to capitalize on the tax credits, the acclaimed actor said it would make it appealing for others like him to take advantage.

“I came here to live, and so this is my home,” Wahlberg said. “I’ve gotten lots of calls from lots of my colleagues asking me how it is, and I’m encouraging people to make the same move.”