Getting Film Incentives to Pay Off

"The biggest lesson was that the 5% program was not enough to attract films" - Texas Film Commission Director Bob Hudgins

Rep. Dawnna Dukes, D-Austin, scored a big victory last session by finally getting cash for the Texas Moving Image Industry Incentive Program (aka the film incentives.) The general feeling with the program's first two years is "good idea, needs some work," which is why she's back with House Bill 873 to fix the problems (see last issue's coverage here.) [UPDATE: Joe O'Connell has some interesting comments from the Texas Motion Picture Alliance in this week's issue.]

It's not exactly what Texas Film Commission Director Bob Hudgins wants, but he's enthusiastic that the changes will have increased pay-off without selling the family silver (like a lot of people say Louisiana did.) The issue for Hudgins is that the current system works on total production budget, which requires the production accountant his office hired to go through every single receipt from every single production. He explained, "If this became a program about only wages, which the (original) bill started as, that's a lot easier than comparing total expenditure." It's not just a workload issue, but an accuracy question. "That's the fastest way to lose a program – to not live up to the rules," he said.

So what exactly does the new bill propose?

– Includes educational and instructional videos in the program. Not glamorous, but a big market that could use smaller facilities and farm out post-production work to local firms.
– Changes eligibility to cover productions that are 60% filmed in Texas (down from 80%) and gives much more control of grant structure to the commission.
– Gets rid of the pre-determined caps on pay-outs: As Hudgins explained, that was a big issue because a movie could be eligible for grants for 5% of its budget up to $2 million, but a video game tops out at $250,00. Considering that Halo 3 is rumored to have cost over $60 million, Hudgins said he felt short-changing the opportunity to get that kind of production into the state is a bad investment.
– Changes what could be nicknamed the Star Clause. Currently, the grant could not cover any salary that was an undefined "major part of the production costs": This sets a $1 million cap.