Movie Madness: The Hounddog Kerfuffle

Quite a few states (22 in fact) have tax incentives for movie productions to work in their states. These incentives generally require that the production operate in the state for a given period of time, spend a set amount of money on qualifying expenses, and that the credit will be provided after the production closes. With movie making being a multi-billion dollar industry, states have recognized that movie making incentives is a good way to share in the wealth.

Yet, there are some kinds of movies that do not qualify for the credits regardless of how much money is involved. States will not extend the credit to obscene movies - X-rated movies.

So what happens when a movie production involves scenes that may be highly objectionable? Take Dakota Fanning's latest movie, Hounddog. It hasn't been released for wide audience yet, but it is already making waves because of one particular scene that reports claim shows Fanning's character being raped by an adult.

A North Carolina Republican State Senator doesn't like the possibility that the state might provide tax credits under its film production credit program for a production such as Hounddog. He's proposing that to qualify for the credit, scripts must be approved by the state.

Citing the controversy surrounding the Dakota Fanning film Hounddog, the leader of the state Senate Republicans says he wants the government to review scripts before cameras start rolling in North Carolina.

That system, said state Sen. Phil Berger, R-Rockingham, would apply only to films seeking the state's lucrative filmmaker incentive, which refunds as much as 15 percent of what productions spend in North Carolina from the state treasury.

"Why should North Carolina taxpayers pay for something they find objectionable?" said Berger, who is having proposed legislation drafted.

It is not known whether Hounddog's producers have or will apply for the incentive. A call Thursday to the N.C. Department of Revenue, which oversees incentive payments, was not returned.

Sen. Julia Boseman, D-New Hanover, one of the backers of the new law that created the current incentive system, said she couldn't say much until she saw Berger's proposal in writing.

"There's no bill yet to take a look at," she said. "But I am always willing to consider reasonable ways to improve the program."

She did say she thought looking at scripts before shooting starts might be meaningless because a script could be changed during production.

There are two issues involved here. One is the free speech rights of the production/writers. The other is extending the state's tax credit to the production.

First, the tax credit issue:
N.C. Gen. Stat. § 105-130.47 requires that the production credit cannot exceed $7.5 million or that the credit is extended to political advertising, television production of a news program or live sporting event, contains material that is obscene, as defined in N.C. Gen. Stat. § 14-190.1, or is radio production. Other states generally follow similar restrictions. The production company has to provide supporting documentation to show that they're a qualify production company and that the expenses qualify.

Hounddog was filmed in Wilmington, North Carolina.

So the first question is - would a movie like Hounddog even qualify for the credit based on the obscenity law restriction or should the state get involved in reading scripts to determine whether the credit should be extended based on whether the content of the movie is satisfactory or not assuming that it meets all the other requirements. The relevant provision of the obscenity statute is:

14‑190.1. Obscene literature and exhibitions.

(a) It shall be unlawful for any person, firm or corporation to intentionally disseminate obscenity. A person, firm or corporation disseminates obscenity within the meaning of this Article if he or it:
(1) Sells, delivers or provides or offers or agrees to sell, deliver or provide any obscene writing, picture, record or other representation or embodiment of the obscene; or

(2) Presents or directs an obscene play, dance or other performance or participates directly in that portion thereof which makes it obscene; or

(3) Publishes, exhibits or otherwise makes available anything obscene; or

(4) Exhibits, presents, rents, sells, delivers or provides; or offers or agrees to exhibit, present, rent or to provide: any obscene still or motion picture, film, filmstrip, or projection slide, or sound recording, sound tape, or sound track, or any matter or material of whatever form which is a representation, embodiment, performance, or publication of the obscene.

(b) For purposes of this Article any material is obscene if:
(1) The material depicts or describes in a patently offensive way sexual conduct specifically defined by subsection (c) of this section; and

(2) The average person applying contemporary community standards relating to the depiction or description of sexual matters would find that the material taken as a whole appeals to the prurient interest in sex; and

(3) The material lacks serious literary, artistic, political, or scientific value; and

(4) The material as used is not protected or privileged under the Constitution of the United States or the Constitution of North Carolina.

(c) As used in this Article, "sexual conduct" means:
(1) Vaginal, anal, or oral intercourse, whether actual or simulated, normal or perverted; or

(2) Masturbation, excretory functions, or lewd exhibition of uncovered genitals; or

(3) An act or condition that depicts torture, physical restraint by being fettered or bound, or flagellation of or by a nude person or a person clad in undergarments or in revealing or bizarre costume.

(d) Obscenity shall be judged with reference to ordinary adults except that it shall be judged with reference to children or other especially susceptible audiences if it appears from the character of the material or the circumstances of its dissemination to be especially designed for or directed to such children or audiences.

As it stands right now, one could argue that there is no need to engage in editing the film production statute because the obscenity restriction already prohibits extending the credit to movies that engage in actual or simulated sexual acts. The problem is that Hounddog's writers can claim that it is an exception from the obscenity law because the movie has literary, artistic, political, or scientific value. That we're discussing the nature of obscenity, the legalities of whether Fanning should have been allowed to participate in a simulated rape scene in a movie, and the ensuing kerfuffle suggests that there is at least political value. If the movie is going to raise awareness for the plight of children raped by relatives, then there is political and scientific value. In other words, based on the IMDB description and what I know of the movie thus far, I believe the film would and should qualify for the credit based on the current law.

Frankly, I don't have any intention to see this movie, and I don't think that the state should get involved in reviewing scripts, even though there is taxpayer money involved. This issue hits at the intersection of free speech and a state's interests in revenue and taxation. However, the state should not get involved in approving scripts for the credit - and the obscenity restriction already covers much of the same ground that the State Senator wishes to tread, but does so without demanding script approval. While this could be seen as censorship - the state determining what can or cannot be considered eligible for state funds, the production company can choose to not apply for the credit at all (avoiding the issue entirely) or to take the production elsewhere - to another state that does not impose such restrictions or that has more favorable tax implications (or both). However, given the amount of money potentially involved, film production companies are not going to pass up the opportunity for credits on their production expenses and they are going to look at location shoots based on the artistic vision they're looking to produce at the price they're willing to incur.