87R4717 MTB-D     By: Gervin-Hawkins H.B. No. 2418       A BILL TO BE ENTITLED   AN ACT   relating to incentives for the moving image industry in this state.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 485.021(1), Government Code, is amended   to read as follows:                (1)  "In-state spending" means the amount of money   spent in Texas by a production company during the production and   completion of a moving image project, including the amount spent on   wages [to Texas residents. The term does not include wages   described by Section 485.024(b)].          SECTION 2.  Section 485.022, Government Code, is amended by   amending Subsection (b) and adding Subsection (g) to read as   follows:          (b)  The office shall develop a procedure for the submission   of grant applications and the awarding of grants under this   subchapter. The procedure must include provisions relating to[:                [(1)  methods by which an individual's Texas residency   as described by Section 485.021(4) can be proved; and                [(2)]  requirements for the submission, before   production of a moving image project begins, of:                (1) [(A)]  an estimate of total in-state spending;                (2) [(B)]  the shooting script or story board, as   applicable;                (3) [(C)]  the estimated number of jobs for cast and   production crew during the production and completion of a moving   image project; and                (4) [(D)]  any other information considered useful and   necessary by the office for an adequate and accurate analysis of a   production company's in-state spending.          (g)  Notwithstanding Subsection (b), a production company is   eligible for a grant under this subchapter and is not required to   submit an application for a grant if the company produces moving   image projects that meet the qualification requirements of Section   485.023 at a production facility located in this state that is owned   by the company or a parent, subsidiary, or affiliate of the company.   A production company shall notify the office of the company's   eligibility under this subsection.          SECTION 3.  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 50 [70] percent of the production crew,   actors, and extras for a moving image project must be paid for their   services on the project [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]; and                (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 4.  Section 485.024, Government Code, is amended by   amending Subsection (a) and adding Subsection (a-1) to read as   follows:          (a)  Except as provided by Section 485.025, the amount of a   grant under this subchapter is as follows:                (1)  five percent of in-state spending on a moving   image project if the production company spent at least $250,000 but   less than $1 million on the project;                (2)  10 percent of in-state spending on a moving image   project if the production company spent at least $1 million but less   than $3.5 million on the project; or                (3)  notwithstanding Subdivisions (1) and (2), 22.5   percent of in-state spending on a moving image project if at least   50 percent of the production crew, actors, and extras for the   project are from diverse ethnic backgrounds [may not exceed the   amount established by office rule].          (a-1)  The office shall adopt rules prescribing the method   the office will use to calculate the amount of a grant under this   section, including the method by which the office will determine   whether the production crew, actors, and extras for a moving image   project meet the requirement of Subsection (a)(3) [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.]          SECTION 5.  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 grants [grant]   calculated under Sections [Section] 485.024 and 485.0255, 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 7.5 [2.5] percent of the total amount of the production   company's in-state spending for the moving image project.          SECTION 6.  Subchapter B, Chapter 485, Government Code, is   amended by adding Section 485.0255 to read as follows:          Sec. 485.0255.  ADDITIONAL PRODUCTION CREW GRANT. (a) In   addition to the grants calculated under Sections 485.024(a)(1) and   (2) and Section 485.025, if at least 50 percent of the production   crew, actors, and extras for a moving image project are from diverse   ethnic backgrounds, the production company 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   project.          (b)  The office shall adopt rules prescribing the method by   which the office will determine whether a production company meets   the requirement for an additional grant under this section.          SECTION 7.  Chapter 485, Government Code, is amended by   adding Subchapter C to read as follows:   SUBCHAPTER C. MOVING IMAGE PRODUCTION FACILITY INCENTIVE PROGRAM          Sec. 485.041.  DEFINITIONS. In this subchapter:                (1)  "In-state construction spending" means the amount   of money spent by a production company on the acquisition,   construction, renovation, or lease of a production facility in this   state.                (2)  "Production company" has the meaning assigned by   Section 485.021.                (3)  "Production facility" means a facility and related   equipment that produce films, television programs, including   reality-based television programs, digital interactive media,   video games, or visual effects projects.          Sec. 485.042.  MOVING IMAGE PRODUCTION FACILITY INCENTIVE   PROGRAM. (a) Using gifts, grants, donations, and appropriations   made available to the office for that purpose, the office shall   administer a grant program for production companies that construct   production facilities in this state.          (b)  The office shall develop a procedure for the submission   of grant applications and the awarding of grants under this   subchapter. The procedure must include:                (1)  requirements for the submission, before facility   construction begins, of an estimate of total in-state construction   spending; and                (2)  provisions relating to the submission of other   information considered useful and necessary by the office for an   adequate and accurate analysis of a production company's   qualifications for a grant under this subchapter.          (c)  The office may accept gifts, grants, and donations for   the purpose of implementing this subchapter.          Sec. 485.043.  QUALIFICATION. To qualify for a production   facility grant under this subchapter, a production company must be   a:                (1)  limited liability company, partnership, or   corporation formed or organized under the laws of this state; or                (2)  joint venture or other legal entity in which at   least one entity that holds at least a 30 percent ownership interest   is a limited liability company, partnership, or corporation formed   or organized under the laws of this state.          Sec. 485.044.  GRANT. The amount of a production facility   grant under this subchapter is determined as follows:                (1)  if the production company spent at least $2   million but less than $4 million on the facility, the amount of the   grant is equal to 10 percent of in-state construction spending on   the facility; or                (2)  if the production company spent at least $4   million on the facility, the amount of the grant is equal to 20   percent of in-state construction spending on the facility.          Sec. 485.045.  ADDITIONAL GRANT FOR UNDERUTILIZED AND   ECONOMICALLY DISTRESSED AREAS. In addition to the grants   calculated under Sections 485.044 and 485.046, a production company   that constructs a production facility in an underutilized and   economically distressed area is eligible for an additional grant in   an amount equal to 7.5 percent of the total amount of the production   company's in-state construction spending for the facility.          Sec. 485.046.  ADDITIONAL GRANT FOR CERTAIN PRODUCTION   FACILITIES. (a) In addition to the grants calculated under   Sections 485.044 and 485.045, a production company is eligible for   an additional grant in an amount equal to 2.5 percent of the total   amount of the company's in-state construction spending for a   production facility if:                (1)  the company constructs the facility to produce   projects with a primary focus on persons from diverse ethnic   backgrounds; and                (2)  at least 25 percent of the persons employed at the   facility are from diverse ethnic backgrounds.          (b)  The office shall adopt rules prescribing the method by   which the office will determine whether a production company meets   the requirements for an additional grant under this section.          SECTION 8.  The following provisions of the Government Code   are repealed:                (1)  Section 485.021(4); and                (2)  Section 485.024(b).          SECTION 9.  The changes in law made by this Act to Chapter   485, Government Code, apply only to a grant awarded on or after the   effective date of this Act. A grant awarded before the effective   date of this Act is governed by the law in effect on the date the   award was made, and the former law is continued in effect for that   purpose.          SECTION 10.  This Act takes effect September 1, 2021.