Lawmakers have advanced a proposal to dramatically expand Nevada’s film tax credit after making sweeping changes, most notably the proposed creation of a special district whose tax revenues are estimated to bring in about $11 million annually for pre-K in Clark County across the next 17 years.

The Assembly Committee on Ways and Means approved AB238 on Saturday with major amendments that also include significant new investment thresholds that developers and film production companies must meet, or risk losing control of the properties and having to repay money to the state. The bill proposes appropriating $95 million in annual transferable film tax credits for 15 years beginning in 2028, an 850 percent increase from the amount that would be set aside under the state’s existing film tax credit program.

The changes mark a key development for the heavily lobbied proposal sponsored by Assm. Sandra Jauregui (D-Las Vegas) with nine days left in the legislative session. But it still is no sure thing to pass, with five committee members voting in opposition (three Democrats and two Republicans). Two other members voted in favor, while reserving their right to change their votes on the Assembly floor.

The Nevada Senate Democratic Caucus did not immediately respond to requests for comment. Republican Gov. Joe Lombardo, who declined to comment, said during an IndyTalks event earlier this year that he didn’t have a firm stance on the legislation but would need to assess its economic effects.

AB238 is one of two film tax credit expansion proposals this session (the other being SB220), but the one approved Saturday — with the backing of film industry giants Sony Pictures Entertainment and Warner Bros. Discovery — has moved further along in the legislative process.

The changes introduced Saturday seek to placate concerns that opponents have raised with the bill, such as whether there are enough provisions to hold the companies accountable and whether the economic output would be worth the significant financial investments.

“I believe in economic development wholeheartedly, but I'm also looking at what the future costs are going to be incurred in this state,” said Assm. Shea Backus (D-Las Vegas), who voted in favor of the bill but reserved the right to change her vote on the floor.

The changes did not sway the opposition from progressive groups, who released statements on Saturday that accused the committee of giving handouts to movie studios at the expense of more pressing needs such as housing.

Pre-K funding 

The bill would establish a Production Studio Entertainment District, which would funnel revenue from certain local property, sales and lodging taxes related to the film production toward the Clark County School District (CCSD) to build up pre-K programs.

John Vellardita, the executive director of the Clark County Education Association, testified in support of the proposal.

There are about 27,000 4- and 5-year-olds in Clark County who are eligible for pre-K but the majority (about 20,000) do not have access, Vellardita said. Additionally, the state is not constitutionally required to fund pre-K, which he said makes it more difficult to consistently fund early childhood education programs.

Vellardita added that this kind of model is preferable to a one-session appropriation for pre-K because even if such funding was approved, Clark County does not have the resources to immediately ramp up pre-K enrollment because of factors such as a lack of educators.

“If there was a dedicated revenue stream to the Clark County School District for pre-K, then the planning to ramp up and provide access to pre-K could take place,” Vellardita said during Saturday’s bill hearing, which was not on the committee’s Saturday agenda.

Another major teachers union, the Nevada State Education Association (NSEA), continues to be opposed to the film tax credit expansions, saying in a social media post Saturday that they represent “fiscal recklessness and misplaced priorities.” It comes the day after the death of AJR1, an NSEA-backed resolution to rework the state’s property tax system in a way estimated to bring in $500 million a year for schools.

Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) announced plans before the start of the session to fund universal pre-K across the state and her education bill (SB460) called for $50 million toward such programs, although she has indicated it may be difficult to find funding given the state’s uncertain economic outlook.

Only 9 percent of 4-year-olds and 1 percent of 3-year-olds had access to Nevada's state pre-K program during the 2023-2024 school year.

New requirements

The amendments presented Saturday also include significant new requirements that developers and production companies must meet.

In addition to the $400 million capital investment threshold already required in 2028, the new iteration of the bill would require companies to invest an aggregate of $900 million in construction by the end of 2029, and $1.8 billion in capital investment by the end of 2038. 

If they fail to meet these milestones, a developer could face a lien against the remaining undeveloped land in an amount equal to the shortfall. The lien, however, would be capped at no more than 110 percent of the undeveloped land’s appraised value. 

Before a lien is imposed, the developer would have a two-year period to cure the shortfall — and if the issue is not fully resolved, the state can take the property as collateral.

“While I am confident this project is absolutely committed to the promised economic investment, this addition is our guarantee as a state that it will be made,” Jauregui said.

The bill would also now require production companies to spend $4.5 billion across the 15 years. Across the first six years, the companies must guarantee $600 million in spending for each two-year period, while in the remaining nine years, the organizations must guarantee $900 million during each three-year period.

If the companies do not meet these requirements, they must submit repayments to the state general fund ranging from $2 million to $50 million, depending on the size of the shortfall. If a company fails to spend $150 million in a fiscal year, it must provide a repayment of up to $10 million.

The amendment also increases transparency by requiring that production companies submit a “Performance and Accountability Report” every other year to the governor, the Legislature, and the Governor’s Office of Economic Development. 

In that report, production companies must include information on capital investment to date, public infrastructure improvements financed and the aggregate number of Nevadans employed. 

“This increased reporting and transparency is one of the critical additions for the state to hold the project and its production companies accountable in return for the state’s investment,” Jauregui said.

Updated on 5/24/25 at 6:38 p.m. to include the reaction from progressive groups. This story was corrected on 5/24/24 at 8:30 p.m. to indicate that the Senate film bill is SB220.