By: Huffman, et al. S.B. No. 22
A BILL TO BE ENTITLED
AN ACT
relating to the Texas moving image industry incentive program and
the establishment and funding of the Texas moving image industry
incentive fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. LEGISLATIVE INTENT
SECTION 1.01. It is the intent of the legislature that the
Music, Film, Television, and Multimedia 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, as determined by the office, in a moving image
project and that the office shall consider general standards of
decency and respect for the diverse beliefs and values of the
citizens of Texas when determining whether to act on or deny a grant
application.
ARTICLE 2. TEXAS MOVING IMAGE INDUSTRY INCENTIVE PROGRAM; FUND
SECTION 2.01. Section 485.021, Government Code, is amended
by adding Subdivision (1-a) to read as follows:
(1-a) "Incentive fund" means the Texas moving image
industry incentive fund established under Section 485.0225.
SECTION 2.02. Section 485.022, Government Code, is amended
by amending Subsections (a) and (f) and adding Subsections (g),
(h), (i), and (j) to read as follows:
(a) The office shall administer a grant program for
production companies that produce moving image projects in this
state:
(1) using money from the incentive fund; or
(2) [,] to the extent that gifts, grants, donations,
or other money, including appropriations, are made available to the
office for that purpose.
(f) The following types of projects are not eligible for
grants under this subchapter:
(1) pornography or obscene material, as defined by
Section 43.21, Penal Code;
(2) news, current event or public access programming,
political advertising, including public service announcements that
advance a public policy or political position, or programs that
include weather or market reports;
(3) local events or religious services;
(4) productions not intended for commercial,
educational, or instructional distribution;
(5) sporting events or activities;
(6) awards shows, galas, or telethons and similar
programs that solicit funds;
(7) projects intended for undergraduate or graduate
course credit;
(8) application software, system software, or
middleware;
(9) casino-type video games and interactive digital
media experiences used in a gambling device, as defined by Section
47.01, Penal Code; or
(10) commercials or advertising for this state or any
agency or department of this state.
(g) Subsection (f) is not an exclusive list of the types of
projects that are ineligible for a grant under this subchapter. The
office has broad authority to:
(1) designate other types of projects as ineligible
for a grant;
(2) elect not to take action on a grant application;
(3) deny a grant application; or
(4) award a grant.
(h) As part of the preliminary application process [Before a
grant is awarded under this subchapter], the office shall review
the proposed content of a moving image project in the manner
provided by office rule and advise the prospective applicant
whether the content will preclude the project from receiving a
grant under this subchapter.
(i) Once an approved project has been completed, the office
shall review the final content before issuing the grant payment
to[:
[(1) require a copy of the final script; and
[(2)] determine if any substantial changes occurred
during production on a moving image project to include content
described by Subsection (e) or (f).
(j) The office has broad discretion to rescind preliminary
approval at any point in the grant process.
SECTION 2.03. Subchapter B, Chapter 485, Government Code,
is amended by adding Section 485.0225 to read as follows:
Sec. 485.0225. TEXAS MOVING IMAGE INDUSTRY INCENTIVE FUND.
(a) In this section, "trust company" means the Texas Treasury
Safekeeping Trust Company.
(b) The Texas moving image industry incentive fund is
established as a fund outside the state treasury to be held and
invested by the trust company and administered by the office.
(c) Money in the incentive fund may be spent without
legislative appropriation and may be used only for the purposes of
awarding grants under this subchapter and paying the trust
company's expenses of managing the incentive fund's assets.
(d) The incentive fund consists of:
(1) money appropriated, transferred, or deposited to
the credit of the incentive fund by the legislature;
(2) money, including the proceeds of a fee or tax
imposed by this state, that by statute is dedicated for deposit to
the credit of the incentive fund;
(3) investment earnings and interest earned on amounts
credited to the incentive fund; and
(4) gifts, grants, and donations made to the office
and deposited to the credit of the incentive fund.
(e) The trust company shall hold and invest the incentive
fund. The incentive fund may be invested with the state treasury
pool and may be pooled with other state assets for purposes of
investment.
(f) The overall objective for the investment of the
incentive fund is to maintain sufficient liquidity to meet the
needs of the incentive fund while striving to preserve the
purchasing power of the incentive fund over a full economic cycle.
(g) The trust company may acquire, exchange, sell,
supervise, manage, or retain any kind of investment that a prudent
investor, exercising reasonable care, skill, and caution, would
acquire or retain in light of the purposes, terms, distribution
requirements, and other circumstances of the incentive fund then
prevailing, taking into consideration the investment of all the
assets of the incentive fund rather than a single investment.
(h) The expenses of managing the incentive fund's assets
shall be paid from the incentive fund.
(i) The office annually shall provide to the trust company a
forecast of the cash flows into and out of the incentive fund. The
office shall provide updates to the forecast as appropriate to
ensure the trust company is able to achieve the objective specified
by Subsection (f).
(j) The trust company shall disburse money from the
incentive fund as directed by the office.
SECTION 2.04. Section 485.023, Government Code, is amended
to read as follows:
Sec. 485.023. QUALIFICATION. To qualify for a grant under
this subchapter:
(1) a production company must have spent a minimum of:
(A) $250,000 in in-state spending for a film or
television program; or
(B) $100,000 in in-state spending for a
commercial or series of commercials, an educational or
instructional video or series of educational or instructional
videos, or a digital interactive media production;
(2) [at least 55 percent of the production crew,
actors, and extras for a moving image project must be Texas
residents] unless the office determines and certifies in writing
that a sufficient number of qualified crew, actors, and extras are
not available to the company at the time principal photography
begins, the percentage of the production crew, actors, and extras
for a moving image project who are Texas residents must be at least:
(A) 35 percent for a moving image project that
begins principal photography on or after September 1, 2025, and
before September 1, 2027;
(B) 40 percent for a moving image project that
begins principal photography on or after September 1, 2027, and
before September 1, 2029;
(C) 45 percent for a moving image project that
begins principal photography on or after September 1, 2029, and
before September 1, 2031; and
(D) 50 percent for a moving image project that
begins principal photography on or after September 1, 2031;
(3) at least 60 percent of the moving image project
must be filmed in Texas; and
(4) a production company must submit to the office an
expended budget, in a format prescribed by the office, that
reflects all in-state spending and includes all receipts, invoices,
pay orders, and other documentation considered necessary by the
office to accurately determine the amount of a production company's
in-state spending that has occurred.
SECTION 2.05. Sections 485.024(a) and (c), Government Code,
are amended to read as follows:
(a) Except as provided by Section 485.025, for a moving
image project that is:
(1) a feature film, a television program other than a
reality television program, or a visual effects project for a
feature film or television program other than a reality television
program with total in-state spending of:
(A) at least $250,000 but less than $1 million,
the amount of a grant under this subchapter is equal to five percent
of total in-state spending for the project;
(B) at least $1 million but less than $1.5
million, the amount of a grant under this subchapter is equal to 10
percent of total in-state spending for the project; or
(C) at least $1.5 million, the amount of a grant
under this subchapter is equal to 25 percent of total in-state
spending for the project;
(2) a digital interactive media production with total
in-state spending of:
(A) at least $100,000 but less than $1 million,
the amount of a grant under this subchapter is equal to five percent
of total in-state spending for the project;
(B) at least $1 million but less than $1.5
million, the amount of a grant under this subchapter is equal to 10
percent of total in-state spending for the project; or
(C) at least $1.5 million, the amount of a grant
under this subchapter is equal to 25 percent of total in-state
spending for the project;
(3) a reality television program as defined by office
rule with total in-state spending of:
(A) at least $250,000 but less than $1 million,
the amount of a grant under this subchapter is equal to five percent
of total in-state spending for the project; or
(B) at least $1 million, the amount of a grant
under this subchapter is equal to 10 percent of total in-state
spending for the project; or
(4) a commercial, a series of commercials, an
educational or instructional video, a series of educational or
instructional videos, or a visual effects project for a commercial,
series of commercials, educational or instructional video, or
series of educational or instructional videos with total in-state
spending of:
(A) at least $100,000 but less than $1 million,
the amount of a grant under this subchapter is equal to five percent
of total in-state spending for the project; or
(B) at least $1 million, the amount of a grant
under this subchapter is equal to 10 percent of total in-state
spending for the project [may not exceed the amount established by
office rule. The office shall adopt rules prescribing the method
the office will use to calculate the amount of a grant under this
subsection. The office shall publish a written summary of the
method for determining grants before awarding a grant under this
section. The method must consider at a minimum:
[(1) the current and likely future effect a moving
image project will have on employment, tourism, and economic
activity in this state; and
[(2) the amount of a production company's in-state
spending for a moving image project].
(c) The office may [only] make a grant from the incentive
fund or appropriated funds.
SECTION 2.06. Section 485.025, Government Code, is amended
to read as follows:
Sec. 485.025. ADDITIONAL GRANTS [GRANT] FOR CERTAIN
PROJECTS [UNDERUTILIZED AND ECONOMICALLY DISTRESSED AREAS]. (a)
In addition to the grant calculated under Section 485.024, a
production company is eligible for:
(1) a Texas heritage grant in an amount equal to 2.5
percent of total in-state spending for a moving image project that
qualifies under Subsection (b);
(2) a rural filming grant in an amount equal to 2.5
percent of total in-state spending for a moving image project that
qualifies under Subsection (c);
(3) a postproduction grant in an amount equal to one
percent of total in-state spending for a moving image project that
qualifies under Subsection (d);
(4) a Texas veterans grant in an amount equal to 2.5
percent of total in-state spending for a moving image project that
qualifies under Subsection (e); or
(5) a faith-based moving image project grant in an
amount equal to 2.5 percent of total in-state spending for a moving
image project that qualifies under Subsection (f).
(b) A moving image project qualifies for a Texas heritage
grant under Subsection (a)(1) if the project is designated by the
office as a Texas heritage project according to rules adopted by the
office. The office is not required to designate any moving image
project as a Texas heritage project and has sole discretion to make
that designation. In determining whether to designate a moving
image project as a Texas heritage project, the office shall
consider:
(1) the project's current and likely future effect on
the promotion of family values; or
(2) whether the project portrays Texas and Texans in a
positive fashion.
(c) A moving image project qualifies for a rural filming
grant under Subsection (a)(2) if the production company spends at
least 35 percent of the project's filming days or man hours, as
applicable and as defined by office rule, in a county in this state
with a population of 300,000 or less.
(d) A moving image project qualifies for a postproduction
grant under Subsection (a)(3) if at least 25 percent of the total
in-state spending for the project is spent by the production
company during postproduction on eligible expenditures as provided
by office rule, including expenditures for labor, vendor, and music
costs.
(e) A moving image project qualifies for a Texas veterans
grant under Subsection (a)(4) if at least five percent of the
production crew, actors, and extras for the project are Texas
residents who served in and were honorably discharged from:
(1) the army, navy, air force, coast guard, or marine
corps of the United States;
(2) the Texas National Guard as defined by Section
431.001; or
(3) a reserve component of an entity listed in
Subdivision (1) or (2).
(f) A moving image project qualifies for a faith-based
moving image project grant under Subsection (a)(5) if the project
is designated by the office as a faith-based moving image project
according to rules adopted by the office. The office is not
required to designate any moving image project as a faith-based
moving image project and has sole discretion to make that
designation.
(g) A moving image project may qualify for and receive more
than one additional grant under Subsection (a). However, the total
amount of all grants received by a moving image project may not
exceed 31 percent of the total in-state spending for the project
[that spends at least 25 percent of a moving image project's filming
days in an underutilized and economically distressed area is
eligible for an additional grant in an amount equal to 2.5 percent
of the total amount of the production company's in-state spending
for the moving image project].
SECTION 2.07. Section 151.801, Tax Code, is amended by
amending Subsection (a) and adding Subsection (g) to read as
follows:
(a) Except for [the] amounts otherwise allocated under this
section [Subsections (b), (c), (c-2), (c-3), and (f)], all proceeds
from the collection of the taxes imposed by this chapter shall be
deposited to the credit of the general revenue fund.
(g) Not later than the 30th day of each state fiscal
biennium, the comptroller shall deposit to the credit of the Texas
moving image industry incentive fund established under Section
485.0225, Government Code, $500 million of the proceeds from the
collection of the taxes imposed by this chapter.
SECTION 2.08. (a) The Music, Film, Television, and
Multimedia Office shall adopt rules necessary to implement and
administer Subchapter B, Chapter 485, Government Code, as amended
by this article.
(b) The comptroller of public accounts may adopt rules
necessary to implement and administer Section 485.0225, Government
Code, as added by this article.
ARTICLE 3. SUNSET PROVISIONS
SECTION 3.01. Effective September 1, 2035, Sections
485.022(a) and (f), Government Code, are amended to read as
follows:
(a) The office shall administer a grant program for
production companies that produce moving image projects in this
state, to the extent that gifts, grants, donations, or other money,
including appropriations, are made available to the office for that
purpose.
(f) Before a grant is awarded under this subchapter, the
office shall:
(1) require a copy of the final script; and
(2) determine if any substantial changes occurred
during production on a moving image project to include content
described by Subsection (e).
SECTION 3.02. Effective September 1, 2035, Section 485.023,
Government Code, is amended to read as follows:
Sec. 485.023. QUALIFICATION. To qualify for a grant under
this subchapter:
(1) a production company must have spent a minimum of:
(A) $250,000 in in-state spending for a film or
television program; or
(B) $100,000 in in-state spending for a
commercial or series of commercials, an educational or
instructional video or series of educational or instructional
videos, or a digital interactive media production;
(2) at least 55 percent of the production crew,
actors, and extras for a moving image project must be Texas
residents unless the office determines and certifies in writing
that a sufficient number of qualified crew, actors, and extras are
not available to the company at the time principal photography
begins;
(3) at least 60 percent of the moving image project
must be filmed in Texas; and
(4) a production company must submit to the office an
expended budget, in a format prescribed by the office, that
reflects all in-state spending and includes all receipts, invoices,
pay orders, and other documentation considered necessary by the
office to accurately determine the amount of a production company's
in-state spending that has occurred.
SECTION 3.03. Effective September 1, 2035, Sections
485.024(a) and (c), Government Code, are amended to read as
follows:
(a) Except as provided by Section 485.025, a grant under
this subchapter may not exceed the amount established by office
rule. The office shall adopt rules prescribing the method the
office will use to calculate the amount of a grant under this
subsection. The office shall publish a written summary of the
method for determining grants before awarding a grant under this
section. The method must consider at a minimum:
(1) the current and likely future effect a moving
image project will have on employment, tourism, and economic
activity in this state; and
(2) the amount of a production company's in-state
spending for a moving image project.
(c) The office may only make a grant from appropriated
funds.
SECTION 3.04. Effective September 1, 2035, Section 485.025,
Government Code, is amended to read as follows:
Sec. 485.025. ADDITIONAL GRANT FOR UNDERUTILIZED AND
ECONOMICALLY DISTRESSED AREAS. In addition to the grant calculated
under Section 485.024, a production company that spends at least 25
percent of a moving image project's filming days in an
underutilized and economically distressed area is eligible for an
additional grant in an amount equal to 2.5 percent of the total
amount of the production company's in-state spending for the moving
image project.
SECTION 3.05. The following provisions added by Article 2
of this Act expire on August 31, 2035:
(1) Section 485.021(1-a), Government Code;
(2) Sections 485.022(g), (h), (i), and (j), Government
Code;
(3) Section 485.0225, Government Code; and
(4) Section 151.801(g), Tax Code.
SECTION 3.06. (a) On August 31, 2035, the Texas moving
image industry incentive fund established under Section 485.0225,
Government Code, as added by Article 2 of this Act, is abolished and
the unencumbered and unspent balance of the fund on that date is
transferred to the general revenue fund.
(b) Notwithstanding the changes in law made by this article,
a grant awarded under Subchapter B, Chapter 485, Government Code,
on or after September 1, 2025, and before September 1, 2035, is
governed by that subchapter as amended by Article 2 of this Act and
any subsequent amendments to that law by the legislature in effect
on the date the grant is awarded, and that law is continued in
effect for that purpose.
(c) A grant awarded under Subchapter B, Chapter 485,
Government Code, on or after September 1, 2035, is governed by that
subchapter as amended by this article.
ARTICLE 4. EFFECTIVE DATE
SECTION 4.01. Except as otherwise provided by this Act,
this Act takes effect September 1, 2025.