The Nevada Assembly has narrowly approved a proposal to massively expand Nevada’s film tax credit program, concluding a topsy-turvy few days for the marquee legislation on the special session agenda.

In a 22-20 vote, the Assembly on Sunday approved AB5, which would provide $120 million in annual transferable tax credits to film companies across 15 years. The proposal includes last-minute amendments with new workforce diversity goals and a new funding stream toward medical expenses for retirees who participate in the state’s retirement program.

The passage came after about 30 minutes of floor debate, during which supporters touted the bill’s potential to diversify the state’s economy and bring in union jobs and opponents criticized it as a handout to corporations that could come at the expense of existing state services.

It followed a contentious floor debate surrounding the use of remote voting. Assms. Brian Hibbetts (R-Las Vegas) and Heidi Kasama (R-Las Vegas) voted to support the bill remotely after Speaker Steve Yeager (D-Las Vegas) deemed that “exceptional circumstances” existed for remote participation — a power that he has under Assembly rules.

Assm. Selena Torres-Fossett (D-Las Vegas) had appealed the decision to allow for remote voting, citing concerns about the precedent it sets given that both lawmakers are on vacation. The Assembly then held a vote on that appeal, and members voted 21-19 to allow remote voting.

Gov. Joe Lombardo’s sweeping criminal justice package (AB4) also passed out of the Assembly on Sunday morning, 31-11.

The film vote came two days after legislative fiscal staff provided lawmakers with details about the pressure the credits could put on the state budget, multiple sources told The Indy. The estimates — which assumed all appropriations proposed in the special session were approved and a 3 percent annual growth in state revenue and expenses — found that the final balance of the state budget in fiscal years 2030 and 2031 would be about $100 million and $260 million, respectively, below the required balance. 

Without the film tax credits, the state would not be in these budget holes.

“If we pass this bill, we are either going to have to raise taxes or we are going to have to cut services,” Assm. Selena La Rue Hatch (D-Reno) said. “And I cannot stand and watch our children suffer as we cut our school budget. I cannot watch union members suffer as we cut their jobs, their pay or their benefits.”

The vote came one day after the Assembly was tied 21-21 on an attempt to kill the bill. That required a majority vote, so it failed.

The one vote switch came from newly appointed Assm. Jason Patchett (R-Henderson), who agreed with the motion to reject the bill but ultimately supported its passage on Sunday.

In an interview with The Nevada Independent after Sunday’s vote, Patchett — who was sworn in on Thursday after replacing Assm. Toby Yurek (R-Henderson) — said he did not have a change in heart about the bill, which he described as an opportunity to provide jobs.

Patchett previously told The Indy that the Thursday vote had confused him, as it was his first vote cast as an assemblymember.

“I support anything that’s gonna stimulate job growth … and this bill does that,” Patchett said.

On Saturday, former GOP Assm. Annie Black hinted that she might challenge Patchett in a primary if he voted for the bill. Patchett said he has not decided if he will run for re-election, but that he would welcome any challenger.

The vote marks a victory for proponents of the bill, which include Sony and Warner Bros. Discovery. The measure will now head to the Senate, which never voted on a previous version of the bill (AB238) the Legislature considered during this year’s regular session. Since the session ended, however, the top Democrat — Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) — has come on board with the idea.

Supporters of the bill have touted its potential to provide thousands of union jobs, boost pre-K funding (certain tax revenues will go toward pre-K programs) and provide a much-needed jolt to Nevada’s tourism-dependent economy. The bill includes a requirement of $1.8 billion in capital investment by 2039.

Meanwhile, opponents say the state’s dollars are better spent elsewhere and are skeptical the economics will pencil out. A state-commissioned analysis found the bill from earlier this year could generate significant economic activity, but the amount of tax revenue government entities would recoup would fall far short of breaking even with how many tax credits were invested. The study was conducted before the stricter investment requirements.

Amended bill details

The original version of AB5 included language that would trigger a 5 percent reduction of the tax credits if a production company did not meet certain diversity goals. For example, it would have cut the tax credits if the company did not do enough to either train or provide opportunities for underrepresented groups, or ensure a diverse film production hierarchy, ranging from directors to editors.

Instead, it now sets a goal for production companies to ensure at least 30 percent of workers on a film are part of a traditionally underrepresented group. Without this proof, the tax credits would not be issued, but the sanctions could be reduced if there was a “good faith effort” to meet diversity standards.

Matt Walker, a lobbyist for Howard Hughes Holdings — the developer of the proposed studio project in Summerlin — said the change was to align the bill with previous economic development bills.

The bill also will transfer certain room taxes — which would typically go to the Las Vegas Convention and Visitors Authority — from the proposed studio district to cover medical expenses of state employees who participate in the state’s retirement program. Based on existing data, the total tax revenue would be between roughly $1 million and $9 million across the 15-year period.

“I think this is just another way that the local jurisdiction is contributing to the state,” said Assm. Sandra Jauregui (D-Las Vegas), the bill's sponsor.

Democratic divisions

The Thursday effort to kill the bill while it was introduced revealed divisions within the Democratic caucus.

La Rue Hatch on Thursday invoked a little-known rule to force a vote on rejecting the bill. In a committee hearing Friday, Yeager criticized the move.

“What a lack of transparency and what a slap in the face it would have been to Nevadans to not give these folks — whether you support the bill or not — a chance to weigh in on this bill,” he said. 

Soon after, Torres-Fossett, an opponent of the bill, responded.

“What’s not fair is being provided an amendment that is eight pages long with no opportunity to review it except for the time that we’re in committee when we’re looking at millions of dollars,” she said.

La Rue Hatch also responded in a press release Friday evening.

“These comments were deeply inappropriate and offensive,” she said. “Nevadans deserve leadership that respects process, values differing perspectives, and engages in debate without resorting to condescension. Nevada citizens deserve better than a Speaker who mansplains to a female colleague.”

Updated on 11/16/25 at 11:07 a.m. today to include more vote details and an interview with Assm. Jason Patchett and at 11:43 a.m. to include more specifics about the changes to workforce diversity rules.