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 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 Studio Infrastructure Jobs and Workforce Training Act to authorize film infrastructure transferable tax credits for qualified productions produced at the site of the Summerlin Production Studios Project. Sections 1-20 of this bill enact the Nevada Studio Infrastructure Jobs and Workforce Training Act, which provides film infrastructure transferable tax credits for production companies located within the Summerlin Production Studios Project, as defined in section 9. Section 10 requires the Office of Economic Development to enter into a development agreement with the lead participant of the Project to establish: (1) certain criteria that the Project is required to satisfy for film infrastructure transferable tax credits to be authorized for qualified productions at the Project; and (2) certain requirements for new capital investment in this State and the generation of direct production expenditures in this State, which the Project must meet, with certain exceptions, to avoid penalties specified in section 10. Section 11: (1) authorizes production companies located at the Project to apply, on or after December 1, 2026, to the Office 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 12 establishes the qualified direct production expenditures which are the basis for calculating the amount of film infrastructure transferable tax credits, including, without limitation: (1) purchases, rentals or leases of property or services from a Nevada business; (2) wages and fringe benefits paid to employees who are Nevada residents or other personnel for labor or services provided in this State on the qualified production; and (3) amounts paid to service providers for the services of certain persons on the qualified production. Section 13 establishes requirements for the employment of Nevada residents as below-the-line employees of qualified productions. Section 14 provides that the base amount of film infrastructure transferable tax credits is 30 percent of the amount of qualified direct production expenditures calculated under section 12, with certain reductions if the production company does not satisfy certain criteria for work opportunities to members of traditionally underrepresented groups. Section 15: (1) limits the total amount of film infrastructure transferable tax credits issued pursuant to sections 1-20 to $95,000,000 for each fiscal year beginning on or after July 1, 2029; and (2) prohibits the approval of an application for film infrastructure transferable tax credits if the application is submitted in a fiscal year that begins on or after July 1, 2044. Section 16 requires a production company to: (1) commence principal photography within a certain period of time after the Office approves an application for a certificate of eligibility for film infrastructure transferable tax credits; (2) complete the qualified production within 18 months after the date of commencement of principal photography, except that the Office may extend this period for not more than 6 months; and (3) submit certain required information within the required period. Section 17 requires a production company to repay film infrastructure transferable tax credits under certain circumstances. Section 19 requires the lead participant in the Project to submit certain reports to the Governor, the Legislature and the Office. Section 20 requires certain reports to be made to the Legislature concerning film infrastructure transferable tax credits. Sections 23-32 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 24 changes references to “extras” in a qualification production to “background actors.” Section 25: (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 26 revises the criteria to be eligible for noninfrastructure transferable tax credits to be the same as the criteria for film infrastructure transferable tax credits by: (1) removing the requirement that a certain percentage of direct production expenditures be incurred in this State and, instead, requiring that at least 50 percent of the total principal photography days of the qualified production take place in this State or a certain amount of qualified direct production expenditures be incurred in this State; and (2) requiring a production company to have a workforce plan that establishes certain goals and provide to the Office a final assessment of whether the production company met or made a good faith effort to meet those goals. Section 22 of this bill applies to applicants for noninfrastructure transferable tax credits the same requirements for the employment of Nevada residents as below-the-line personnel that apply to applicants for film infrastructure transferable tax credits. Section 27 revises the expenditures and costs that may serve as a basis for noninfrastructure transferable tax credits. Section 28: (1) increases the base amount of transferable tax credits from 15 percent of the qualified direct production expenditures to 30 percent of the qualified direct production expenditures, for an application submitted in each fiscal year beginning on or after July 1, 2029, and ending before July 1, 2044; and (2) provides for certain reductions to that base amount during that period. Section 29 makes certain provisions of existing law relating to the calculation of noninfrastructure transferable tax credits inapplicable for the period beginning on July 1, 2029, and ending on June 30, 2044. Section 30 temporarily increases from $10,000,000 to $25,000,000 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, 2029, until June 30, 2044. Sections 31 and 32 make conforming changes so that noninfrastructure transferable tax credits are administered and reported in the same manner as film infrastructure transferable tax credits. Section 18 requires the Clark County Board of County Commissioners to create a production studio entertainment district for the purpose of enhancing early childhood education opportunities, including prekindergarten, for children in Clark County. Under section 18, the boundaries of the district are required to be entirely within the unincorporated areas of Clark County and include only parcels of land that are located within the boundaries of the Summerlin Production Studios Project. Section 18 requires certain taxes on transient lodging, certain property taxes and certain sales and use taxes imposed in the district to be pledged and distributed to the Clark County School District and used by the Clark County School District solely for the purposes of prekindergarten programs in the Clark County School District. Finally, section 18 requires the Clark County School District to submit annual reports to the Office concerning the use of money distributed to Clark County School District under section 18. Sections 33-40 of this bill establish a program to provide grants to certain organizations that provide education and vocational training for workforce development for the production of motion pictures and other qualified productions. Section 38 establishes the Account for Nevada Film, Media and Related Technology Education and Vocational Training for the purpose of allocating money to certain entities and organizations that provide education and vocational training for such workforce development. Sections 11 and 26 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 1 percentage point of the percent of qualified direct production expenditures used to calculate the amount of transferable tax credits issued to the qualified production, and requires the Office to deposit that money with the State Treasurer for credit to the Account. Section 39 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 40: (1) requires the Board to establish the procedure 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; and (2) prohibits the making of a grant from the Account unless the Board approves the application for the grant.

Statutes affected:
As Introduced: 360.758, 360.7582, 360.7586, 360.759, 360.7591, 360.7592, 360.7593, 360.7594, 360.7595, 360.7598