Texas Senate panel approves $500 million infusion for film incentives

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Legislation that would more than double the amount of money the state spends to lure film and television production to Texas was passed unanimously Monday by a bipartisan group of Texas senators.

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 would make Texas more attractive to producers who have opted to film their projects in other states, such as New Mexico and Georgia, that have historically offered larger and more stable incentives, Huffman said during a star-studded Senate Finance Committee hearing attended by Texas-born actors Matthew McConaughey and Woody Harrelson.

The committee voted 11-0 to pass the bill, a representative for Huffman's office said. It now goes to the full Senate for consideration.

“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.

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 lawmakers whim.

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.

Fueled by endorsements from famous names in Hollywood, SB 22 appears to have widespread support. Both Democratic and Republican lawmakers 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 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.

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 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.

SB 22 would create a new special boost to projects 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.”

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

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