Assembly hearing probes proposed Summerlin studios tax credits as supporters tout jobs and critics warn of tradeoffs

CARSON CITY — Supporters of Assembly Bill 238 told the Assembly Committee on Revenue on Oct. 27 that a multimillion-dollar plan to build Summerlin Production Studios and expand Nevada—s film tax credit program would create thousands of construction and production jobs, boost spending across the state and provide new workforce-training pathways. Critics warned the committee that the proposal would commit long-term tax breaks that could reduce state revenue for schools and other public services and questioned whether the benefits would flow statewide.

"Assembly Bill 238 is about investing in Nevada's future," Assemblymember Sandra Howtege said as she opened the hearing. "No tax credit can be earned in this biennium. In fact, more than a billion and a half dollars will be invested and thousands of construction jobs created before a single dollar is earned in tax credit."

Why it matters: The bill would create a two-part, transferable film tax credit program: a capped infrastructure pool tied to Summerlin Production Studios and an expanded non-infrastructure pool for productions elsewhere in Nevada. Proponents say the combination of private investment and guaranteed, performance-based tax credits will lure studios to build and film here, generating construction work, long-term production jobs and spending that supports hotels, caterers, equipment vendors and other Nevada businesses.

What supporters said: David O'Reilly, chief executive officer of Howard Hughes, said the private partners — Howard Hughes with Sony Pictures Entertainment and Warner Bros. Discovery — are prepared to invest large sums up front to build studio capacity. "We're putting our money where our mouth is. We're putting our money in the dirt and on the screen, investing billions in Nevada's future to deliver the studio, the jobs, and the content all before any credits are issued," he said.

Representatives of the studios described workforce and education commitments. Michael Morgenthal, vice president for production finance at Sony Pictures Entertainment, highlighted production wages and unions, saying the industry pays "about $113,000 per year plus health and pension benefits" for production workers on average in major-studio contexts. Simon Robinson, chief operating officer of Warner Bros. Discovery Studios, described plans to partner with school districts and higher-education institutions for internships and paid training and said the companies expect to spend roughly three-quarters of production-related supplier dollars in Nevada.

PFM, the fiscal consultant for the sponsors, presented the bill's economic case. Guy Hobbs, project coordinator for Public Financial Management, summarized their estimate that a net $110 million a year in film tax credits (the presentation used a net figure after an existing $10 million program) over 15 years would equal $1.65 billion in committed credits. PFM projected direct state tax returns of $335 million over that period and $755 million when local revenue is included; the firm estimated nearly 19,000 jobs supported during construction and roughly 17,680 jobs at stabilization, including 9,300 direct production-related roles.

Bill details summarized at the hearing: Sections submitted by bill sponsors would: - Authorize infrastructure transferable credits tied to Summerlin Production Studios if the developer meets benchmarks including a capital investment (the bill text cited a $400 million capital threshold for some criteria), a $6 million contribution to the Clark County Redevelopment Agency, and completion of a Nevada Partners Vocational Training Studio with at least $8 million in capital investment. - Set the base credit at 30 percent of qualified direct production expenses for productions meeting the requirements; subject the credit amount to reductions if productions do not meet local-hire and diversity targets; require minimum qualified spend levels and other reporting and audit provisions. - Cap the infrastructure pool at $95 million per fiscal year beginning in July 2028 (a conceptual amendment increased the cap from $80 million to $95 million); set a $25 million annual non-infrastructure pool for productions not affiliated with the Summerlin Studios; and pause monetization of credits until fiscal year 2028-29.

Supporters, including Southern Nevada labor leaders, industry suppliers, civic groups and university officials, told the committee the bill would deliver construction jobs with project labor commitments and create training pipelines for community college and university students. Vince Sivedra, executive secretary-treasurer of the Southern Nevada Building and Construction Trades, pointed to a project labor agreement the development team reached with unions and said the agreement "ensures that Nevada's workforce will be building this project."

What critics warned: Education and public-interest groups urged caution or opposed the bill. The Nevada State Education Association and local school employee associations, among others, said the state faces urgent education funding needs and argued a large, long-term tax-credit commitment could reduce revenue available for schools, health care and social services. "We must put schools over studios," Alexander Marks of the Nevada State Education Association said.

Other opponents — including policy analysts and anti-tax groups — cited national studies that, in their view, show film tax-credit programs frequently return less than the cost of the credits. Opponents also raised questions about whether the studios would actually use local suppliers and crews and whether credits would be monetized by out-of-state entities.

Points of contention and clarifications: Committee members pressed presenters on several technical issues, including how the bill measures the 50 percent local-hire threshold for below-the-line workers (the sponsors said they would clarify counting rules and exclude background extras), when credits would be issuable (credits are not monetized until July 1, 2028 in the bill language), and what safeguards apply in a recession or industry slowdown (sponsors emphasized that credits are performance-based and that private construction investment begins before credits are earned). PFM told the committee it used conservative assumptions in its fiscal model and cited assessor values and local tax rules when estimating property-tax impacts.

No final action: The committee took public testimony for and against the bill in Carson City, Las Vegas and via telephone but did not record any final vote during the hearing. Supporters asked the committee to advance the bill with technical clarifications; opponents urged rejection or amendments to protect education funding and small local businesses.

What happens next: Committee members and bill sponsors said they would follow up with technical clarifications and potential amendments, including language to tighten local-hire counting and to ensure clarity about audit and enforcement procedures. Sponsors and industry partners asked for additional questions to be submitted in writing and offered to meet with committee staff to refine details before future committee action.

— Reporting by the Assembly Committee on Revenue hearing on AB 238. Primary presenters and key witnesses included Assemblymember Sandra Howtege (bill sponsor), Assemblymember Danielle Monroe Moreno (co-sponsor), David O'Reilly (Howard Hughes), Michael Morgenthal (Sony Pictures Entertainment), Simon Robinson (Warner Bros. Discovery), Guy Hobbs (Public Financial Management) and multiple union and higher-education representatives who testified in person and by phone.