In the first hearing this session on the effort to significantly expand Nevada’s film tax credit program, lawmakers scrutinized the finances and statewide impacts of the proposal that drew wide support from unions and would come with a sizable price tag.

The Assembly Committee on Revenue on Thursday heard AB238, a bill sponsored by Assms. Sandra Jauregui (D-Las Vegas) and Daniele Monroe-Moreno (D-North Las Vegas) that is backed by a partnership between Sony Pictures Entertainment, Warner Bros. Discovery and Howard Hughes Holdings.

As proposed, the legislation would earmark up to $80 million in annual transferable tax credits for productions at a studio in Las Vegas’ Summerlin community supported by Warner Bros. and Sony, though the companies are not explicitly named in the legislation. 

But before the hearing began, Jauregui proposed an amendment Thursday that would instead earmark $95 million in annual transferable tax credits. It would mark an exponential jump for the state’s existing $10 million film tax credit program — good for an increase in $1.65 billion over the 15 year period of the tax credits envisioned in the bill.

Thursday’s hearing, which lasted more than four hours, served as the first look at legislator appetite for what will likely be among the most consequential — and divisive — bills of this year’s legislative session. While it was not immediately clear how most of the legislators felt about the legislation, some lawmakers appeared particularly concerned about assurances that the workforce would be made up of Nevadans and whether it would benefit regions outside of Southern Nevada.

In more than two hours of presenting the bill and answering legislators’ questions, officials from the studios and Howard Hughes — which owns the land where the proposed studio would be located — expressed confidence in achieving the proposal’s lofty requirements, prioritizing workers from Nevada and engaging with regions outside of Southern Nevada. 

In two hours of public testimony that followed, union members largely supported the bill, while progressive groups and other opponents said the money is better served elsewhere — especially given that expanding film tax credits have a shoddy record in growing the economies of other states. 

The bill is one of two film tax credit proposals percolating this session. Sen. Roberta Lange (D-Las Vegas) has also proposed a similar bill alongside Birtcher Development and MBS Group, but Lange and Jauregui have acknowledged only one bill will ultimately exist — and Jauregui’s bill has the momentum, with the backing of Warner Bros. and Sony.

Read More: Indy Explains: How do two film tax credit expansion measures differ?

Here are The Indy’s takeaways from the hearing.

Most money details yet

Supporters of the legislation have long touted the economic and employment benefits from the proposal, but Thursday's hearing provided the most specific details on the fiscal impact.

A fiscal analysis presentation from PFM Consulting projected that the state tax revenue growth across 15 years is expected to make up about 20 percent of the value of the credits —  about $335 million of revenue — while the tax revenue to state and local governments will make up about 46 percent of the tax credits’ value.

Additionally, the report found that when accounting for economic benefits, such as job creation, the gross economic return is estimated to be about $25 for every dollar of the tax credit.

Notably, the economic projections are based on a combination of direct spending, indirect spending into the state’s economy and induced spending, a harder-to-predict value that reflects the effect of people using their wages to spend in the economy.

Direct spending makes up nearly half of the total projected economic impact. 

Economists across the country have minimized the economic benefits of film tax credits, but policymakers say Nevada will be different — even though other states have determined similar programs to be a net economic loss. 

Multiple lawmakers — including Assms. Ken Gray (R-Dayton) and P.K. O’Neill (R-Carson City)  — questioned executives about why expanding the tax credits in Nevada would play out differently than in other states.

David O’Reilly, the CEO of Howard Hughes, emphasized that Nevada is uniquely qualified to be a hub for the film industry — and fully occupy studios for 15 years — because of its proximity to Los Angeles.

“Nevada has an incredible embedded advantage over Georgia, New York, New Jersey, Louisiana, Vancouver, Calgary, Australia, Dubai,” O’Reilly said. “The proximity of those folks to be able to get home to their families on the weekends that they couldn't do filming in Australia so gives us such a competitive advantage.”

Support from unions, skepticism from others

The legislation is estimated to generate about 19,000 construction jobs over 15 years and about 2,400 annually. The bill mandates that Nevadans make up at least half of below-the-line workers, who are technical and logistical crew members responsible for the day-to-day operations of a film.

Several unions — including the Screen Actors Guild, Laborers’ Union and Carpenters Union — dubbed the program as a “transformative opportunity” for Nevada, which has the nation’s highest unemployment rate at 5.7 percent. 

“You can change that number simply by voting for this bill,” said Danny Thompson, a longtime labor lobbyist representing the International Brotherhood of Electrical Workers. “This is truly a step in the right direction.”

The bill would not only create jobs, union representatives said, but also establish workforce development opportunities via the creation of a grant program to provide education and vocational training for the film industry. 

“Expanding this program means thousands of union jobs, permanent careers, expanding apprenticeship opportunities, and a chance to diversify our economy, " said Vince Saavedra, the executive secretary treasurer of Southern Nevada Building Trades Union.

But groups on both sides of the aisle critiqued the bill as a “handout” to billionaires amid budget shortfalls — potential federal Medicaid cuts could mean a multi-billion dollar budget hole. 

“The tax credit would only benefit film and TV productions at the expense of every other Nevada industry,” said Wiz Rouzard, the deputy state director for the libertarian political advocacy group, Americans for Prosperity.

Representatives from the Nevada Coalition to End Domestic and Sexual Violence and the Nevada Women’s Lobby contended that giving out tax credits effectively curtails funding for public education, housing assistance and health care. Funds for tax credits could go towards  programs such as Medicaid in case federal funding is cut for programs.

Progressive groups New Day Nevada and Battle Born Progress opposed the bill for similar reasons.

The Nevada State Education Association (NSEA) also opposed the bill, saying it could take away additional funding from K-12 education. According to projections from the Economic Forum, Nevada is estimated to lose $51 million in general fund revenue to tax credits in fiscal year 2025 and another $72 million in fiscal year 2026, which representatives from NSEA argued could otherwise go to school funding. 

Nevada is one of the bottom 10 states for per-pupil spending.

“Sadly, there has been a fundamental contradiction in the actions of Nevada leaders when it comes to properly funding public education and other vital state services,” said Brian Wallace, the vice president of the NSEA.

Other education officials, including leadership at UNLV and the Nevada System of Higher Education, expressed support for the bill. The Clark County Education Association — the politically influential teachers union — testified as neutral. 

What about Northern, rural Nevada?

The most consistent concern raised by lawmakers was how the program could benefit people outside of Southern Nevada.

O’Neill said during his time in office, he has considered three very large tax credit programs, but only one has benefited Northern Nevadans.

“I’m looking more definitively about how this is benefiting Northern Nevada, my constituents,” O’Neill said.

Even legislators from Clark County said there needs to be a statewide approach when using the tax credits.

“Hopefully, the projects will be benefiting and diversifying our economy, not just in the Southwest … but the entire state as well,” said Assm. Reuben D’Silva (D-Las Vegas).

The bill includes many references to Clark County, including the creation of a job training facility in Las Vegas and a contribution to the county redevelopment agency’s cultural center, but does not have any specific language regarding outreach to rural and Northern Nevada counties.

In response to these concerns, those supporting the legislation said that film production would not be constrained to Southern Nevada, and that location scouting is already underway for places to film elsewhere.

“This will not require production to be contained within the walls of Summerlin studios, as productions need to be on Mars or need to be in a wonderful wooded area like Tahoe, those productions are going to happen,” said Matt Walker, a lobbyist for Howard Hughes. “There’s going to be a lot of activity from Boulder City to Ely.”

Several people with Northern Nevada affiliations also testified in support of the legislation, including a representative from the Building and Construction Trades Council of Northern Nevada and Gi Yun, the dean of UNR’s journalism school, who expressed hope for the project’s potential to hire some of his students.

Studio officials said UNR will play a prominent role in the workforce development aspect of the legislation. Simon Robinson, the chief operating officer of Warner Bros., said the studios are engaged with “all of the higher education institutions in the state.”

“We need a strong market in the north and in the rural parts of the state to do all of the filming that is anticipated,” Walker said. “Without [a] significant and robust pipeline of talent ready to fill those opportunities in other parts of the state … we're going to fail, and we do not intend on failing.”

Updated on 2/28/25 at 1:20 p.m. to correct the name of MBS Group.