By thin margin, Assembly passes bill to provide $1.4b in tax credits for Summerlin movie studio

Yahoo

31-05-2025

Among the 27 Democrats in the chamber, 15 voted in support and 12 voted against. Among Republicans, seven supported and eight opposed.
The Nevada Assembly on Friday night approved what will likely be the state's largest ever public subsidy: $1.4 billion in transferable tax credits over 15 years to support a movie studio in Las Vegas.
Assembly Bill 238 passed the Assembly by a razor-thin margin: 22 in support, 20 opposed. The bill now advances to the Senate for consideration in the waning days of the legislative session.
The bill would massively expand Nevada's film tax credit program to support the build out and operation of a 31-acre film studio currently referred to as the Summerlin Production Studios Project (after the Las Vegas neighborhood where it would be located). Hollywood giants Sony Pictures Entertainment and Warner Bros. Discovery are attached to the project. Howard Hughes Holdings is developing.
How transferable tax credits cost the state money: A $50 million example
Transferable tax credits sell for less than face value — a discount of about 10% isn't unusual.
Let's say the state issues Sony $50 million of tax credits. MGM Resorts International buys them from Sony for $45 million. Then, instead of paying the state $50 million in gaming taxes that it owes, MGM gives the state the tax credits it bought from Sony.
MGM gets a $5 million tax break.
Sony gets $45 million.
And the state, which otherwise would have received $50 million in tax revenue from MGM, gets nothing.
— Hugh Jackson
Nevada's film tax credit program is currently capped at $10 million per year. AB 238 would raise that cap to $120 million per year, for 15 years, beginning in 2028. The majority of those tax credits, $95 million per year, would be reserved for productions at the Summerlin studio; $25 million per year would be for productions not attached to the studio.
Altogether, that's equivalent to $1.8 billion in public subsidies for the television and film industry. If approved by the Senate and signed into law by Republican Gov. Joe Lombardo, the legislation will be the largest public subsidy approved by the State of Nevada, surpassing the $1.25 billion approved by lawmakers in 2014 for Tesla Motors.
Democratic Assemblymembers Sandra Jauregui and Danielle Monroe Moreno, who sponsored the bill, have pushed back on the characterization of their proposal as a public subsidy for massive corporations, instead framing it as an investment in a new industry that will bring thousands of new jobs and new revenue to the state.
While tax credits aren't issued to companies until they prove they've met the qualifications for them, the state must treat them as 'negative revenue' when forecasting expected state revenue. That means they do impact the state budgeting process.
Opponents have argued that the return on investment is low. An independent analysis commissioned by the Governor's Office of Economic Development, which houses the Nevada Film Office, determined that AB238 would stimulate the state economy but not enough to offset the massive expansion of the film tax credit program.
An analysis commissioned by the backers of AB 238 offered a rosier projection, but even that acknowledged that most of the projected economic activity is indirect or induced.
An amendment adopted by the Assembly will create a special tax zone around the Summerlin film studio that captures some of the local taxes generated and diverts it to the Clark County School District to fund pre-k programs in East Last Vegas. Additional guardrails were also amended into the bill.
Support in the Assembly did not fall across party lines. Among the 27 Democrats in the chamber, 15 voted in support and 12 voted against. Among Republicans, seven supported and eight opposed.
The Summerlin studio bill received less support in the Assembly than the bill two years ago that approved $380 million in public assistance for a proposed baseball stadium for the Oakland A's on the Las Vegas Strip. That bill passed the Assembly 25-15. (Two lawmakers were excused from that vote.)
The razor-thin film tax credit bill vote was not the only dramatic moment in the Assembly Friday. Earlier in the floor session, Assembly Bill 500 fell short of the required two-thirds approval it needed to pass the chamber. The bill would have allowed for payment banks, a new type of financial institution that focuses solely on payment processing rather than lending.
Assembly Speaker Steve Yeager, who sponsored that bill, believes the bill will create competition in the financial services industry and lower costs for businesses by cutting out financial middlemen.
The Assembly vote was 25-17, a simple majority but three short of the two-thirds it needed because it would raise state revenue. Six Democrats and 11 Republicans opposed the bill. Four Republicans and 11 Democrats supported the bill.
Immediately after the bill failed, a motion was made to reconsider the vote and move the bill to the chief clerk's desk.
Yeager said afterward he wasn't surprised by the outcome, adding that he wasn't sure he had the votes it needed but decided 'to put it out there and see.'
He dismissed the notion that some Democrats may have withdrawn support after learning that the Nevada Firearms Coalition PAC was privately urging Republicans to support the bill, something Yeager and others in his caucus apparently did not know until it was reported by The Nevada Independent days earlier.
Yeager chalked up the vote to lawmakers being hesitant about complex financial banking legislation. He added that he plans on having 'a few more conversations' about the bill on Saturday to see if another vote is possible.
Because of procedural rules, AB500 needs to pass the full Assembly on Saturday in order to have a chance at making it to the governor's desk.
The 2025 Legislative Session adjourns Monday.