Existing law establishes a program for the issuance of transferable tax credits by the Office of Economic Development to the production company of a motion picture or other qualified production, based upon qualified direct production expenditures made for the purchase, rental or lease of personal property or services from a Nevada business. (NRS 360.758-360.7598) This bill revises provisions governing these transferable tax credits and enacts the Nevada Film Infrastructure, Workforce Development, Education and Economic Diversification Act to authorize film infrastructure transferable tax credits for qualified productions produced at the Nevada Studios Project at the Harry Reid Research and Technology Park, which is owned by the University of Nevada, Las Vegas Research Foundation.
Sections 1-18 of this bill enact the Nevada Film Infrastructure, Workforce Development, Education and Economic Diversification Act, which provides for film infrastructure transferable tax credits to be issued to production companies that produce qualified productions, in whole or in part, at the Nevada Studios Project, as defined in section 8. Section 10 requires the Office of Economic Development to enter into a development agreement with the lead participant for the Project and to establish certain criteria that the Project is required to satisfy in exchange for production companies located at the Project to be eligible for film infrastructure transferable tax credits. Section 12: (1) authorizes a production company located at the Project that has obtained the written approval of the lead participant under section 11 to apply for film infrastructure transferable tax credits for qualified productions produced, in whole or in part, at the Project; and (2) authorizes such credits to be used against the modified business tax, insurance premium tax or gaming license fee, or any combination of these taxes and fees. Section 13 establishes the qualified direct production expenditures which are the basis for calculating the amount of film infrastructure transferable tax credits, including, without limitation, purchases, leases and rentals of property or services from a Nevada business, wages and fringe benefits paid to employees who are Nevada residents for services on the qualified production, certain fees paid to producers and amounts paid to certain corporations or companies for the services of certain persons on the qualified production. Section 14 provides that the base amount of film infrastructure transferable tax credits is the sum of: (1) 35 percent of the qualified direct production expenditures paid to Nevada residents for services in connection with the qualified production; and (2) 30 percent of the amount of all other qualified direct production expenditures. Under section 14: (1) the amount of film infrastructure transferable tax credits for which a production company is eligible is reduced by specified percentages if, after certain periods, the number of Nevada residents who are below-the-line personnel of the qualified production is less than certain percentages; (2) film infrastructure transferable tax credits may be reduced by the amount of any damages incurred by the State or a political subdivision of this State as a result of a qualified production; and (3) film infrastructure transferable tax credits may be withheld for certain violations of law. Section 15: (1) establishes the maximum amount of film infrastructure transferable tax credits that may be issued pursuant to sections 1-18 during each 12-month period of the development period and for each fiscal year thereafter; (2) authorizes 50 percent of the amount of film infrastructure transferable tax credits that are authorized for the development period or for a fiscal year following the development period, but are not approved, to be carried forward and made available for approval in subsequent fiscal years; and (3) prohibits the issuance of film infrastructure transferable tax credits for a fiscal year that begins more than 15 years after the Project receives its first certificate of occupancy. Section 16 establishes the time within which a production company that produces a qualified production is required to submit to the Office and the Department of Taxation any audits or other information required to determine the eligibility of the production company for film infrastructure transferable tax credits. Section 17 requires a production company to repay film infrastructure transferable tax credits under certain circumstances. Section 18 requires certain reports to be made to the Governor and the Legislature concerning film infrastructure transferable tax credits.
Sections 19-24 of this bill make various changes to the existing law governing the noninfrastructure transferable tax credits for motion picture and other qualified productions. (NRS 360.758-360.7598) Section 19: (1) provides that digital media productions are qualified productions for the purposes of eligibility for film infrastructure transferable tax credits and noninfrastructure transferable tax credits; and (2) clarifies that media productions solely produced for social media are not eligible for such transferable tax credits. Section 20 revises certain criteria for a qualified production to be eligible for noninfrastructure transferable tax credits. Section 21 increases the base amount of noninfrastructure transferable tax credits for an application submitted in each fiscal year beginning on or after July 1, 2025, and ending before July 1, 2043, from 15 percent of the qualified direct production expenditures to the sum of: (1) 35 percent of the qualified direct production expenditures paid to Nevada residents for services in connection with the qualified production; and (2) 30 percent of the amount of all other qualified direct production expenditures. Section 21 also requires reductions to that base amount under certain circumstances. Section 22 temporarily increases from $10,000,000 to $15,000,000 the total amount of noninfrastructure transferable tax credits for motion picture and other qualified productions that may be issued under the existing program for each fiscal year beginning on or after July 1, 2028, until June 30, 2043. Section 23 makes conforming changes to update a reference that was renumbered in section 20 and to consistently refer to the existing program of transferable tax credits as noninfrastructure transferable tax credits. Section 24 makes conforming changes so that the information required to be reported by the Office concerning noninfrastructure transferable tax credits is similar to the information required to be reported by the Office concerning film infrastructure transferable tax credits.
Sections 25-32 of this bill establish a program to pay certain costs related to the Nevada Media and Technology Lab and to provide grants to certain organizations that provide education and vocational training for workforce development for the production of motion picture and other qualified productions. Section 30 creates the Account for Nevada Film, Media and Related Technology Education and Vocational Training for the purpose of paying certain costs related to the Nevada Media and Technology Lab and to make grants to certain entities and organizations that provide education and vocational training for such workforce development. Sections 12 and 20 require a production company that is issued transferable tax credits for a qualified production to pay to the Office an amount of money equal to 10 percent of the amount of transferable tax credits issued to the qualified production, and require the Office to deposit that money with the State Treasurer for credit to the Account. Section 31 creates and provides for the composition of the Board for Nevada Film, Media and Related Technology Education and Vocational Training within the Office of Economic Development. Section 32 requires the Board to: (1) establish the procedures for a person or entity to apply for a grant of money from the Account, the criteria to be used to determine whether to approve an application for a grant from the Account to an applicant and the requirements for reports by recipients of such grants concerning the use of the grants; (2) prohibits the making of a grant from the Account unless the Board approves the application for the grant; and (3) requires a recipient of a grant from the Account to adopt and implement a community benefits program that satisfies certain requirements.