Robert Rodriguez Film at Issue in Incentive Debate

Any film that combines immigration, guns and taxes can’t help but rile at least someone in Texas. Such is the case with Machete — the latest release from one the state’s most prominent filmmakers, director Robert Rodriguez — and the furor surrounding the production's bid for a state government handout.

In the movie, which arrives in theaters today, an ex-federale exacts revenge after being double-crossed by a Texas businessman who hired him to assassinate a Texas politician with the hope of stirring anti-immigrant sympathies among Texas voters. Machete was shot in and around Austin, meaning its creators are theoretically eligible for $1 million or more in incentives available to projects that film in Texas — an economic development thank-you of sorts for doing business here. But there's a catch: It's up to Bob Hudgins, the director of the Texas Film Commission, to decide if the film runs afoul of a state law that denies such incentives to any movie including “inappropriate content or content that portrays Texas or Texans in a negative fashion.”

The decision has more than just financial consequences: Some filmmakers, including the producer of Machete, are raising the specter of censorship. They worry the potential chilling effect could be damaging to the recently resurgent state film industry.

The dustup over Machete started after a trailer released May 5 depicted the title character promising "a special Cinco de Mayo message to Arizona,” then embarking on a spree of machete-centric violence. Conservative radio host Alex Jones denounced the “equivalent of a Hispanic Birth of a Nation” for inciting “racial jihad.” Bloggers among his legions of fans picked up the story and ran with it. 

Ever since, the potential clash between the law and the movie has garnered the national spotlight and, according to Hudgins, has sparked no small amount of lobbying at his office door — before a subsidy application has even been submitted to his office. “A lot of people are asking me to do things differently from how we normally have,” Hudgins says. “But we’re going to follow our process. It would be inappropriate to treat this film any differently than any other.” Translation: It will be months before the shoe finally drops.

In Texas, unlike many other states, film incentives are approved and distributed only after a movie wraps, all spending in the state is completed and the final product is submitted for review to the film commission. Almost always this comes after the movie has been released in theaters. Of the 28 productions that have applied for incentives since April 2009, none has been officially turned down. The one seeming exception was Waco, a proposed film about the infamous 1993 raid on the Branch Davidian compound, but its creators were discouraged from seeking incentives before getting too far along in the movie-making process, and it never got off the ground.

More than 40 states have film industry incentives, but just 10 have a content standard, which supporters say protects taxpayers from financing the wrong kind of movie.

State Rep. Dawnna Dukes, D-Austin, who authored the legislation creating the incentives, calls the timing of payment and the content clause a “safeguard.” Unlike other states that pay up front, she says, “you have to produce in Texas, show all your receipts, and then you have to show us the product, and it will be determined if it falls in the category of what would be considered offensive. At the same time, we have to be cautious because we are talking about a creative work."

Before today’s opening, Hudgins counted himself among those eagerly awaiting a glimpse of Machete, which stars Danny Trejo, Robert DeNiro, Jessica Alba and Steven Seagal. “[I'm] very, very curious about this project,” he says.

The incentive game

Machete's producer, Elizabeth Avellan, who is Rodriguez’s ex-wife and longtime collaborator, contends that the film has been misrepresented. “It’s not polarizing at all,” she says. “I understand there as a lot of misinformation out there, maybe caused by the trailer.” Rodriguez and Avellan are the founders of Austin-based Troublemaker Studios, one of the state’s most prolific production facilities — responsible for the Spy Kids franchise, Sin City, Grindhouse and other movies — and, in recent years, one of the few outfits making features in Texas. When Gov. Rick Perry signed the incentives program into law, he did so at Troublemaker Studios.

Avellan couldn’t say exactly how much Hudgins' decision would mean to the $25 million film, but she knows a rejection would hurt. “I know it’s over a million dollars,” she says. “It’s significant.”

Everyone in the business agrees: Incentives matter. “They’re huge. The film industry in Texas had pretty much dried up and blown away,” says Texas filmmaker Richard Linklater, who maintains that his next project, set in East Texas, would have been filmed in Shreveport if Texas had not dangled the incentive. Early in the decade, Louisiana and New Mexico beat Texas to the incentive bandwagon, and it worked: Those states lured productions  — and 30 percent of the industry's workforce — away from Texas, which has long fancied itself the "third coast" of the film industry. Soon after, New Orleans started calling itself “Hollywood South.” The $99.8 million spent on Texas-based feature films in 2003 plummeted to $12.7 million by 2007.

Texas comeback

That same year, Dukes carried a bill that established a basic incentive program for Texas. After it proved insufficient, she carried another bill to strengthen the program in 2009. The results have been swift. “We’ve seen a rate of return of 9-to-1 on our investment since 2007,” she says. 

Combined, the 28 films seeking the incentive represented more than $74 million in spending in Texas and more than 5,700 jobs, according to the Texas Film Commission. Include television, commercial and video game production (all of which saw dramatic boosts from incentives) and the production jobs created since the bill was signed total more than 27,000, with more than $414 million being put into the Texas economy. In the same period, the state has given out approximately $48 million in grants.  

“Everything just snapped back into place,” Avellan says. “Suddenly, everyone was working again. It’s the third coast, just like we always talked about.”

Texas incentives are not the most generous. Productions can apply for rebates of up to 17.5 percent based on total spending or up to 29.25 percent based solely on wages. By contrast, Michigan's program, which also has a content provision, offers up to 42 percent back. Louisiana offers up to a 35 percent tax credit. New Mexico offers a 25 percent credit, a loan of up to $15 million and a 50 percent wage reimbursement for on-the-job training of state residents.

But in Texas, a filmmaker has the full gamut of landscapes to choose from — mountains, desert, big city, coast — and access to experienced crew members known for their productivity. Avellan cites as evidence her recent production of Predators (which, to give a sense of pacing, has come and gone from theaters but has yet to be submitted for incentive funding): The movie came in more than $1 million under budget, she says, and gives all the credit to the local crew.

“We have that really skilled workforce,” Hudgins says. “When you leverage that, plus the incentive, that’s what makes us competitive.”

The making of the Machete controversy

The father of the controversial content clause is Steve Ogden, R-Bryan. It was added to Dukes' bill in part because Ogden felt East Texans were unfairly tarnished as racists in the 2006 film Glory Road, the story of Don Haskins' 1966 Texas Western basketball team — which, ironically, was filmed mostly in Louisiana because of better incentives. Ogden did not respond to requests for comment for this story.

Rebecca Campbell, the executive director of the nonprofit Austin Film Society, remembers being at a Senate committee hearing in 2007 and listening to Ogden ask Hudgins about the inclusion of such a provision. “I remember thinking at the time, that’s going into territory that’s really difficult historically,” she recalls. She brushed it from her mind because the priority then was simply getting any incentives program passed. “Now,” she says, “we have the law, and we’ve seen the incredibly positive impact, and it’s playing out that the content clause is creating some difficulties. Maybe this can be a learning moment.”

Other members of the film community are a little more blunt. “It’s silly,” Linklater says. “If this mechanism had been in place, The Last Picture Show probably wouldn’t have been made — [and] all these great Texas movies. It’s a huge can of worms, and everybody wishes it would just go away all together.”

“It’s censorship,” Avellan says. “It is. I mean, come on.”

Whatever it is, Hudgins says, he is obligated to operate the program as lawmakers intended. “We want to see this program continue,” he says. “If the compromise in the process is that the Legislature feels we should be responsible in giving money to projects that make sense for this state, then that’s it.”

Waco revisited

Before Machete bumped up against the content clause, there was Waco. Hudgins, who was shown the Waco script before production got under way, says that situation was “a little more cut-and-dry” because the script used the real names of real Texans who, he says, disputed the account.

“Was it a correctable situation?” Hudgins says. “It was, yes. And it still is. If they had just decided that instead of calling the guy Bob, we’ll call him Fred, we’d be having a very different conversation.” Because the movie was never made and never applied for incentives, Hudgins was spared from making a decision.

What differentiates the two projects is that the characters and the events in Machete are entirely fictional. It makes sense to Dukes that a film purporting to be nonfiction could be held accountable for running afoul of such a content restriction if it strayed from the facts. “Let’s say you want to make a movie about Texas government, and you come in and say [former Lt. Gov.] Bob Bullock was actually a serial killer,” she says. “Why should we pay you to make a movie like that? We all know that’s not true.”

But fiction, she says, should be given more leeway, for the sake of creativity and imagination. Apparently Jones — the radio host who first sent opposition to Machete into overdrive — has since come to agree. He has recanted his opposition to the incentive financing for the film, though not his distaste for the movie, and has taken the position that the incentive floodgates should be open to all comers.

Dukes says she knows the provision doesn’t bring any comfort to the film community. “At the same time,” she says, “as my mom and dad used to tell me, ‘If you’re going to live in my house, you’re going to live by my rules.’"

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