Texas Senate approves $500 million infusion for film incentives

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The Texas Senate on Wednesday passed a bill that would more than double the amount of money the state spends to lure film and television production to Texas.

Senate Bill 22, filed by Houston Republican Sen. Joan Huffman, would direct the comptroller to deposit $500 million into a new Texas Moving Image Industry Incentive Fund every two years until 2035. That figure is more than state lawmakers have ever allocated for media production since they first started funding a film incentive grant in 2007.

The bill received heavy praise from lawmakers on both sides of the aisle and passed with a 23-8 vote. Those who opposed the bill raised concerns about how the governor's office will determine which productions to fund. The bill gives the governor's office complete discretion over which projects receive grant funding.

The bill now moves to the House for consideration.

Since 2007, lawmakers have funded the film incentive program at varying levels, with $50 million during one legislative session followed by $45 million the next. A then-historic $200 million came during the most recent session.

The variability has left producers tentative to film in Texas for fear that the money might vanish at the whims of lawmakers.

The program has boosted economic activity in Texas, producing a 469% return on investment, according to the Texas Film Commission, though economists and some House lawmakers have criticized that metric and denounced film incentives as wasteful spending.

Huffman successfully pushed through an amendment that would give an additional 2.5% incentive to faith-based productions, despite some strong objections from Sen. Nathan Johnson, D-Dallas, and Sen. Sarah Eckhardt, D-Austin. The bill already directs the Texas Film Commission to offer extra grant funding to films labeled “Texas Heritage Projects,” as determined by the governor’s office. The law would ask the office to consider whether the project promotes “family values” and “portrays Texas and Texans in a positive fashion.”

Eckhardt said that while she supports the bill's goal, she worries about the subjectivity of terms like "faith-based" and "family values."

"Adding subjective criteria would tilt this away from the realm of economic development and into the realm of non-netural subject matter propaganda," Eckhardt said on the Senate floor.

"I don't think the promotion of family values would be propaganda," Huffman responded.

"Of course, 'whose family values?' would be the question," Eckhardt rebutted.

Texas is one of 37 states to offer a film incentive program, according to the National Conference of State Legislatures. Industry insiders and Hollywood producers have for years lamented that Texas' program is not as robust as that of some other states, including Georgia and New Mexico.

SB 22 would make Texas more attractive to producers who have opted to film their projects in other states that have historically offered larger and more stable incentives, Huffman said during a Senate Finance Committee hearing last month attended by Texas-born actors Matthew McConaughey and Woody Harrelson.

“Producers who want to film in Texas often have difficulty convincing the capital management side of film production companies to allow filming here when presented with more robust and consistent incentives being offered in other states,” Huffman said.

Sen. Carol Alvarado, D-Houston, echoed that sentiment Wednesday, noting that the Netflix series about Selena, the beloved Texas singer, was shot in California instead of Texas. "That should never happen again," Alvarado said. "We should be the default choice."

Fueled by endorsements from famous names in Hollywood, SB 22 appears to have widespread support. Both Democratic and Republican lawmakers have praised the film commission for what they said is a rigorous program that audits film production’s spending and only offers rebates on money spent within Texas. Eligible expenses include Texas workers’ wages, meals purchased from local restaurants, and airfare on Texas-based airlines.

Flanked by Harrelson, McConaughey told lawmakers during last month's hearing that increased funding would allow them and other actors to tell Texas stories in Texas. Seated behind the duo was Lt. Gov. Dan Patrick, who has declared SB 22 one of his top pieces of legislation.

"All of the filmmakers in the faith and family category say we will become the leader in the world for faith-based and family movies for all faiths and all families," Patrick said after the Senate voted on the bill. "It's always a good thing to sell our Texas values, our faith values, and our family values to the world."

By committing to 10 years of sizable funding, McConaughey said, Texas could grow into a media hub with facilities dedicated to post-production editing, along with a pipeline of film crew, including makeup artists, hair stylists, lighting experts and set designers.

“There’s going to be a point where we are not going to need financial incentives from the state because the infrastructure will be in place, and that will be a major game changer,” McConaughey said.

Despite showing overall support for boosting Texas filmmaking, some lawmakers have questioned whether productions that aren’t “family-friendly” should be supported by taxpayer dollars.

Both Sen. Paul Bettencourt, R-Houston, and Sen. Donna Campbell, R-New Braunfels, suggested shows and movies that use profanities be ineligible for grants. Bettencourt singled out “Landman,” a popular television series centering a West Texas oil company executive played by Billy Bob Thornton.

“It’s not functionally correct, it doesn’t explain what a landman does, and no offense, having Billy Bob Thornton f-bomb every sentence is not Texas values,” Bettencourt said of the show produced by Taylor Sheridan whose second season is expected next year. “It simply is a bad product and not something the Texas taxpayers would want to be supporting.”

The Texas Film Commission limits what types of projects are eligible for funding, and SB 22 would codify additional rules into statute. The bill would prohibit, for example, funding pornography or obscene material, local events or religious services, and casino-type video games. The law does not propose specific rules about foul language, but the governor’s office has broad discretion to designate a project as ineligible for a grant.

Adriana Cruz, executive director of the Texas Economic Development and Tourism office, said in response to Bettencourt that the office would look to state law and its own rules to determine whether to approve a project.

Stephanie Whallon, the director of the Texas Film Commission, previously told The Texas Tribune that some projects had been rejected but didn’t specify why.

In addition to pumping more money into film incentives, SB 22 would make smaller films eligible for larger grants. Currently, projects that spend between $1 million and $3.5 million in Texas are eligible for a 10% rebate, and projects with a greater than $3.5 million spend can receive a 20% grant. The bill proposes a larger, 25% grant for feature films and television programs that spend at least $1.5 million.

“I’m excited about lowering some of these sliding scale boundaries or limitations because I think a lot of family-friendly, faith-based projects fall into that tier,” said Chad Gundersen, producer of “The Chosen,” a television show about the life of Jesus Christ and his disciples that is mostly shot in the town of Midlothian, about 25 miles southwest of Dallas.

Gundersen said during the hearing that his project was not initially eligible for a grant because it was too small. He added that it has since grown and resulted in more than $75 million spent in Texas.

Campbell urged lawmakers and the film commission approving projects to remember that Texas is “still in the Bible Belt,” and she praised “The Chosen” as “the greatest story ever told.”

Texas’ film incentive program offers an additional 2.5% incentive to productions that are shot in certain “underutilized” or “economically distressed areas,” as well as those that hire veterans as 5% of their total paid crew.

Identical legislation, House Bill 4568, filed by Rep. Todd Hunter, R-Corpus Christi has not yet received a committee hearing.

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