Sen. Roberta Lange (D-Las Vegas) is proposing to merge two competing film tax credit expansion measures — a move aimed at opening a door for the heavily lobbied policy to pass in the five remaining days of the session, but one that increases the overall price tag to $2.2 billion.

Lange told The Nevada Independent on Wednesday that she has shared a summary of the proposed merger with proponents of the other bill, but Assm. Sandra Jauregui (D-Las Vegas), the sponsor, said in a text message she has not heard anything from Lange.

The proposed merger would allow for two studio sites, albeit with lower film tax credit allocations for each of them (but with a greater overall total). Lange said state lawmakers have indicated to her that they want a merged bill, and there’s no room in the budget for both film tax credit expansion efforts. 

“I think we can do it together,” Lange said. “Unless we have a conversation, we're never going to get to the end … the Legislature is a compromise.”

When the bills first came forward, sponsors acknowledged that there was likely only room for one bill to move forward, but Lange’s proposal is the first public-facing effort to combine the proposals and offer a view into what a merged bill might look like. A recent state-commissioned report cast doubt that either proposal would be financially sustainable, The Indy reported, but Lange has criticized the report’s methodology.

The two proposals have been out for most of the session, but they are up against the clock with the session ending on Monday. AB238, Jauregui’s proposal, has the support of Sony and Warner Bros. and passed out of a pivotal money committee last week, while Lange’s proposal (SB220) is backed by MBS Group, a brokerage firm that has ties to major movie studios. It has not received a hearing in the money committee yet. 

Still, neither bill has passed out of a legislative chamber, and Gov. Joe Lombardo has not recently weighed in on the proposals.

The merger calls for $60 million in annual tax credits dedicated to each film studio project beginning in fiscal year 2028, a decrease of approximately $30 million annually from the original proposals. This means that beginning in 2028, the state would be on the hook for $120 million in annual tax credits — a twelvefold surge from the state’s existing $10 million annual film tax credit program.

Additionally, the state would provide $25 million in annual non-infrastructure tax credits (which can be used for purposes not related to film production, such as offsetting certain taxes and fees) for both projects combined, leaving the total state expenditure at $145 million annually. 

The combined bill would also still include Lange’s proposal for a three-year ramp-up period beginning in the next fiscal year totaling $73 million in tax credits, making the total more than $2.2 billion in tax credits for the next 18 years.

For this merged bill concept to pass, lawmakers would need to support an even greater increase in proposed tax credits from what had been initially proposed. Some legislators have appeared reluctant to approve the tax credits in a time of economic uncertainty, but Lange said that the proposal would allow them to weather future economic storms down the line.

“In a time where we're having to cut budgets, it seems not good, but sometimes you have to do that to get to where you want to be,” Lange said. 

As the merged proposal would decrease the amount of film tax credits originally envisioned for Lange’s proposal, it would also proportionally reduce the amount of capital investment that must be provided before the tax credits are handed out.

It would also require proponents of Jauregui’s proposal to accept a new bill that lowers their film tax credit allocation. The merger would allow Jauregui’s partners, Sony and Warner Bros., to keep their proposed distribution on how the tax credits must be spent, as well as when studios can be deemed eligible for the tax credits.

It would also still include Sony and Warner Bros’ proposal for an initiative to develop a job training pipeline program for the film industry, as well as fellowships and partnerships with small businesses. 

Asked how Sony and Warner Bros. could benefit from the other studio project taking shape, proponents of Lange’s bill said that Sony and Warner Bros’ productions could also be produced at the other site that is partnering with MBS Group.

A recent amendment to Jauregui’s bill proposed to establish a tax district over the studio site to funnel revenue from county-specific sources, including local property, sales and lodging taxes, for pre-K programs in Clark County.

Though that proposal was not included in Lange’s merger summary, she said she’s open to it, but wants to ensure a film tax credit measure moves forward.

“We have to invest [in the economy] now, because it's not going to get any better,” Lange said. 

This is a developing story.