June 7, 2007

Governor Signs Film Incentives Measure
Despite Industry Warnings on Censorship

By Mike Hailey
Capitol Inside Editor

With Texas-bred actor Dennis Quaid at his side, Governor Rick Perry on Thursday signed a film incentives bill despite warnings from the motion picture industry that the measure is patently unconstitutional and ripe for a court challenge.

The legislation strengthens a film incentives program that was created two years ago as a way to attract movie and television production to Texas at a time when projects have been going increasingly to neighboring states with more competitive incentive plans. A related state budget rider allocates $22 million for the program for the next two years but allows more than that amount to be used for incentives if approved by the Legislature Budget Board and the governor's office. Perry said the measure will bring jobs to the state while providing an economic boost to cities where new films and TV programs are made.

The industry trade organization that represents major producers and distributors said the measure was an infringement on First Amendment rights and would discourage filmmakers from shooting in Texas because the state will have the right to review and approve scripts.

"This provision is a direct indictment of the creative process and American values of free expression that are fundamental to our democracy," Vans Stevenson, the MPAA's senior vice president for state government affairs, said in the letter to Perry. "Motion pictures made in the United States are the most popular form of entertainment worldwide because filmmakers are free to tell stories on film without fear of government censorship."

Stevenson asserted that the legislation is subject to "immediate constitutional challenge" in a federal court - and he warned that court rulings on such grounds had cost taxpayers an average of $1 million for each case in which plaintiffs in a lawsuit prevailed.

Authored by State Rep. Dawnna Dukes, an Austin Democrat, the film incentives measure did not contain the language in question when it was approved by the House in April. But the Senate sponsor, Republican State Senator Bob Deuell of Greenville, agreed to include the provision after presenting the bill to the Finance Committee and determining that it would not pass without it. State Senator Steve Ogden, a Bryan Republican who chairs the Senate Finance Committee, wanted the language that has sparked the MPAA's protests incorporated into the measure before it left the upper chamber.

Deuell's office was unaware of the MPAA's warnings and said the industry organization hadn't mentioned any potential problems with the censorship provision during discussions on the bill before it was approved and sent to Perry.

The new law prohibits incentive funding for productions that are deemed to be obscene - and it gives state officials the right to reject applications for incentive grants if they determine that a project will have "inappropriate content or content that portrays Texas or Texans in a negative fashion." The legislation also requires state officials to weigh "general standards of decency and respect for the diverse beliefs and values of the citizens of Texas" before deciding whether to approve incentive funding for the production of a movie or TV show here.

Dukes, who chairs the Appropriations Special Issues Subcommittee, said the provisions were added to the legislation to avoid a dispute like the one that occured in North Carolina last year after a Dakota Fanning movie that includes a controversial rape scene was filmed there. The furor over the Fanning film Hounddog sparked a debate among North Carolina legislators on whether to move swiftly with legislation that would prevent the producers who made the movie from qualifying for filmmaking incentives from the state.

During the negotiations in Austin this year, Deuell was reportedly upset about a scene in the movie Glory Road that shows African-Americans on Texas Western University's NCAA championship basketball team as targets of racism while in the East Texas city of Commerce for a game there in the late 1960s. Commerce is in Deuell's district.

The MPAA is represented at the Capitol by lobbyists from the Akin Gump law firm including Jody Richardson, a former television news anchor and reporter who has experience in the production of films and documentaries. Austin lobbyist Gaylord Armstrong and other members of the law firm McGinnis Lochridge & Kilgore were actively involved in the negotiations on the film incentives bill as well. HillCo's Brandon Aghamalian and Lawrence Collins worked on the bill as lobbyists for the Texas Motion Picture Alliance. Perry's budget director, Mike Morrissey, was also instrumental in the development of the legislation.

Some of the bill's advocates were concerned that the censorship language could be problematical from a legal standpoint, but they feared that Ogden could become an obstacle to the funding on which the measure revolves as the Senate's chief budget writer. Lobbyists involved in the push for HB 1634 initially thought that State Senator John Carona, a Dallas Republican who'd sponsored related legislation in 2005, would carry the incentives bill in the Senate this year. But Deuell was well-versed in the general subject matter as the Senate sponsor of the Texas Commission on the Arts sunset bill - and Perry's office wanted him to take charge on the film incentives plan as a result as well.

The new law takes effect immediately as a result of a unanimous vote in the Senate and an overwhelming show of support in the House as well. Republican State Rep. Charlie Howard of Sugar Land cast the only vote against the measure when the House agreed to accept the Senate amendment a week before the regular session adjourned. Republican State Reps. Jimmie Don Aycock of Killeen and Robert Talton of Pasadena had voted against HB 1634 when it had been approved initially in the lower chamber almost two months ago. But Aycock and Talton voted for the measure after the Senate had amended it.