(Chuck Muth) – Assembly Bill 5 (AB5) – the “Hollywood Handout” – was dropped in legislators’ laps just two days ago. It’s 63 extremely complicated pages long.
And yet, members of the Assembly are expected to vote on it later today.
The bill has strong bipartisan opposition. Even some Democrats tried to kill the bill before it was even introduced on Thursday.
And during hearings held on the bill yesterday, the public was frozen out of the discussion, as Assembly Speaker Steve Yeager refused to allow telephonic testimony.
This thing stinks like yesterday’s diapers. That’s why they’re trying to rush it through.
Voters don’t know what’s in it. Heck, even the legislators who will be voting on it don’t fully know and understand what’s in it – or what problems may hit us down the road if it passes.
Fortunately, AI (artificial intelligence) does.
I ran AB5 though an AI tool we use and asked for an analysis from a conservative, limited government point of view.
And while the following may not be 100% accurate (amendments are being made on the fly) – and supporters might be able to sufficiently address the concerns – the mere volume of uncertainties says this bill should NOT be approved this fast.
Unanswered questions are a recipe for disaster. Just look at ObamaCare!
Before sharing the analysis, below are the names and contact information for the five Republicans who (shamefully) voted to move the bill forward on Thursday.
If they can’t fully address the concerns detailed below, then they don’t know what they’re voting on and should vote “NO.”
You need to contact them NOW if you want them to change their vote and vote against it. Remind them that Republican primaries are coming up in March.
This is your last chance to stop the Hollywood Handout.
Assemblywoman Lisa Cole
Carson City Phone: (775) 684-8829
Email: lisa.cole@asm.state.nv.us
Assemblyman Rich DeLong
Carson City Phone: (775) 684-8848
Email: Rich.Delong@asm.state.nv.us
Assemblyman Brian Hibbets
Carson City Phone: (775) 684-8853
Email: Brian.Hibbetts@asm.state.nv.us
Assemblywoman Heidi Kasama
Carson City Phone: (775) 684-8827
Email: Heidi.Kasama@asm.state.nv.us
Assemblyman P.K. O’Neill
Carson City Phone: (775) 684-8825
Email: PK.Oneill@asm.state.nv.us
ANALYSIS OF ASSEMBLY BILL 5
A.B. 5 is a massive, highly complex, special-interest film-studio tax-credit bill written to benefit a single project: the Summerlin Production Studios Project (owned or controlled by Howard Hughes Corp. and related entities).
It gives the project:
- Billions in potential tax-credit eligibility over 15+ years
- Exclusive benefits not available statewide
- Authority to redirect local tax revenues
- Workforce mandates & DEI-style compliance measures
- Extensive regulatory authority to the Governor’s economic office
UNANSWERED QUESTIONS / AMBIGUITIES
These issues are not clearly explained in the bill and will raise statutory, fiscal, or policy concerns.
- True Cost to the State
The bill authorizes $95 million per year in transferable credits beginning in FY 2029 through FY 2044.
But the bill does not say:
- The maximum total tax liability Nevada could lose over 15 years
- The impact on the General Fund
- Any independent fiscal analysis showing projected ROI
- Who Actually Owns/Controls the Project?
“Lead participant” and “participants in the Project” are defined, but the bill never clarifies:
- Who the lead participant is
- Whether the Howard Hughes Corporation is the sole beneficiary
- Whether third-party developers can piggyback into the program
- What prevents future ownership transfers to out-of-state entities
- What Guarantees That Jobs Will Be Permanent and Nevada-Based?
The bill declares job creation intentions, but:
- No guarantee that the “thousands of jobs” will be full-time
- No industry-standard job security definitions
- No clawbacks tied to failure in long-term hiring
- No wage transparency
- Clarity on the “Entertainment District” Tax Capture (Sec. 18)
The bill requires Clark County to create a special district that reroutes taxes into pre-K education within that district. But unanswered:
- How much revenue is projected?
- What taxes specifically will be diverted?
- Does this cannibalize existing CCSD revenue streams?
- Will this special district reduce revenue available to public safety or county general services?
- How Will Penalties Be Calculated in Practice?
Although the penalty charts are detailed, the bill creates:
- Exceptions
- Waiver authority
- Discretionary reductions
This makes long-term enforcement unclear.
- How Much Taxpayer Liability Could Escalate Through “Carry-Forward” Rules?
Excess production expenditures can be carried forward, potentially padding future requirements and lowering penalties. But the economic impact of this is not quantified.
RED FLAGS FOR CONSERVATIVE / LIMITED-GOVERNMENT AUDIENCES
These are the features of the bill most likely to generate opposition among fiscal conservatives, free-market advocates, and limited-government lawmakers.
- Massive Corporate Welfare / Special-Interest Carveout
This bill gives billions in taxpayer-backed, transferable tax credits to a single private real estate and entertainment conglomerate.
Transferable credits are effectively cash equivalents, meaning:
- Companies can sell them to casinos, insurers, gaming operators, etc.
- Nevada taxpayers indirectly subsidize the project
- It distorts the free market by advantaging one industry and one developer
This is the same model that has caused major backlash in other states (Georgia, New Mexico, New York).
- Highly Specialized Law for One Project (Not Statewide Policy)
Section 2 openly states this is a “law of local and special application” exclusively for the Summerlin studio project.
This runs against conservative principles of:
- Equal treatment
- Limited favoritism
- Competitive neutrality
- Opposition to hand-crafted statutes for wealthy developers
- Huge Long-Term Fiscal Exposure With No Hard Caps
Even though the bill caps credits annually:
- It spans 15 years
- The total exposure is close to $1.5 billion before considering additional non-infrastructure credits
- Carry-forwards & multipliers increase exposure further
Conservatives typically oppose open-ended, long-term corporate subsidy commitments.
- DEI / Diversity Mandates Embedded in Workforce Requirements
Section 11(d) requires:
- Hiring goals based on “age, gender identity or expression, sexual orientation, ethnic and geographic diversity”
These diversity goals also tie into potential penalties and credit reductions. This is a significant ideological trigger for conservatives who oppose DEI requirements in private-sector hiring.
- Expansion of Government Bureaucracy and Discretion
The bill grants the Office of Economic Development enormous power:
- Discretion to approve or waive penalties
- Authority to modify capital investment deadlines
- Rulemaking power over hiring, training, credit allocation, audits, etc.
Conservatives object to unelected bureaucrats picking winners and losers.
- A New Special Tax District That Redirects Local Taxes
Section 18 forces Clark County to create a special “production studio entertainment district” whose tax revenues go specifically to pre-K programs.
Concerns:
- County autonomy weakened
- Future county budgets restricted
- Creates a precedent for industry-created districts
- Sets up a siloed revenue stream that bypasses voter control
- No Safeguards for Failure or Insolvency (Risk Socialized, Profits Privatized)
There is no clarity about:
- What happens if the project goes bankrupt
- Whether liens can be satisfied if the project collapses
- Whether Nevada taxpayers recover any subsidy
The penalty structure is discretionary and may not fully protect taxpayers.
- Grants & New Boards (Growing Government Spending)
Sections 33–40 create:
- A new training account
- A new workforce development board
- A grant program funded by tax-credit skimming
Conservatives often view these as government overreach and mission creep.
- No Independent Performance Audit Requirements
The Office collects audits from the applicant, not from an independent state-commissioned auditor.
This is an invitation for abuse and inflated reporting.
SUMMARY: Why Conservatives Should Oppose A.B. 5
From a limited-government perspective, the main objections are:
- It is a massive corporate subsidy to a politically connected developer.
- It favors one project instead of creating a level playing field.
- It undermines the free market by picking winners and losers.
- It creates DEI-based hiring requirements backed by government penalties.
- It builds new bureaucracy with little oversight.
- It diverts tax revenue into a special district with unclear impacts.
- It exposes taxpayers to enormous long-term liability.
- It offers ambiguous return on investment with no independent analysis.
This is exactly the kind of “Hollywood Handout” program conservatives nationwide oppose.
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