(Texas Scorecard) – Texas senators have approved a measure that would give the film industry $2.5 billion in corporate welfare over the next decade.
Senate Bill 22, which is a priority of Lt. Gov. Dan Patrick and was filed by State Sen. Joan Huffman (R-Houston), passed 23-8 on Wednesday.
The existing Texas Moving Image Industry Incentive Program provides qualifying productions—including video games and animations—a cash grant based on how much they invest in the state.
Currently, TMIIIP has to go through the standard budgetary process every biennium to receive funding alongside its administrator, the Texas Film Commission, which is controlled by the Office of the Governor.
Huffman’s proposal would keep the existing TMIIIP program under the Office of the Governor but also tie it to a new fund managed by the Comptroller of Public Accounts. The fund would consist of money from appropriations, grants or gifts, investment earnings, or other sources.
The Texas Moving Image Industry Incentive Fund would receive $500 million every two years over the next decade, amounting to $2.5 billion by the 2034-2035 biennium. After that, the fund would end unless reapproved by lawmakers.
“For every dollar paid in a grant, $4.69 is spent in-state, according to the Office of the Governor,” said Huffman on the Senate floor.
In addition to creating the fund, Huffman’s proposal also includes several adjustments to the existing TMIIIP program.
To qualify for TMIIIP at the moment, 55 percent of a project’s paid crew and cast must be Texas residents, and 60 percent of the production must be completed in-state.
Huffman’s proposal would lower the Texas residency requirements on paid cast and crew down to 35 percent initially, with a steady five percent increase every biennium until it reaches 50 percent by September 1, 2031.
When TMIIIP was first established by the Legislature in 2007, at least 70 percent of a project’s cast and crew had to be Texas residents, and at least 80 percent of its production had to be filmed in the state.
Huffman’s measure additionally clarifies that certain material is disqualified from grant eligibility, including pornography or obscene material, news programming, political advertising, religious services, and casino-type video games.
“This bill codifies some of the rules that had been in place through the governor’s office, but it makes it clear that the governor’s office is not required to act on any grant application and may deny an application because of inappropriate content, or content that portrays Texas or Texans in a negative fashion,” explained Huffman on the floor.
State Sen. Sarah Eckhardt (D-Austin) said that the film industry had concerns over the discretionary nature of TMIIIP grants, specifically regarding how the grants are only dispersed after post-production.
“I don’t find it a concern. I’m sorry the industry finds it to be a concern,” replied Huffman.
State Sen. José Menéndez (D-San Antonio) pushed back on SB 22’s changes regarding Texas residency requirements of staff and crew.
Huffman responded that during interim hearings on the TMIIIP program, individuals in the film industry told lawmakers that the current 55 percent threshold was sometimes “difficult to achieve.”
Menéndez also voiced concern over the cost of TMIIIP potentially jumping from $200 million to $500 million per year.
State Sen. Donna Campbell (R-Bulverde), who has expressed hesitancy in the past over potential content that could be greenlit by TMIIIP, called Huffman’s proposal “easy to support.”
“Instead of us complaining about language that goes on in other films, [it gives us] a chance to actually bring the movies here, tell them about Texas, truly make them family-friendly without the language,” said Campbell. “And … if the movie doesn’t fit the criteria, then they don’t get the incentive.”
Huffman, upon consulting with Campbell, introduced a floor amendment that would give additional grant support for faith-based media productions. It passed 26-5, with vocal opposition from State Sen. Nathan Johnson (D-Dallas).
Eckhardt announced that she would change her vote on the measure after Huffman’s amendment, claiming that the additional faith-based grant support would make SB 22 too “subjective.”
Before final passage, Patrick thanked Huffman for her work on the measure and celebrated the possibility that Texas could become the worldwide leader in faith-based media if the legislation passes the House and is signed by the governor.
Outside of TMIIIP, the film industry already benefits from other forms of corporate welfare in Texas. Productions can take advantage of lucrative tax exemptions for the construction and improvement of media production facilities, the reselling of props and costumes, fuel used off-road, hotel rooms, and certain items and services.
Senators passed a budget proposal in March to allocate around $98 million to the existing TMIIIP program, the TFC, and other “Texas Music, Film, Television, and Multimedia” initiatives for the upcoming biennium.
That allotment also includes $30 million for a program to grant awards “to eligible general academic teaching institutions for the development and enhancement of programs that prepare students for employment in the film and media industry.”
Patrick released a statement after the measure passed, calling TMIIIP “an opportunity for us to export Texas faith and family values to the rest of America and the world while growing our economy and enriching Texas workers.”
“The incentive money is only spent on expenses incurred in Texas and goes to the Texas residents hired to do the many jobs on a film set, including carpenters, painters, electricians, truck drivers, and more,” emphasized Patrick.