SANTA FE, N.M. (NEWSnet/AP) — Producers of the western movie "Rust" might lose an economic incentive as they sell the film and fulfill financial obligations to the family of a cinematographer fatally shot by Alec Baldwin in 2021.

New Mexico tax authorities denied an application this spring by Rust Movie Productions for incentives worth as much as $1.6 million, according to documents obtained by The Associated Press.

A late July deadline for producers to appeal the decision is approaching.

Meanwhile, Baldwin is scheduled to go on trial starting next week on an involuntary manslaughter charge in Halyna Hutchins' death. The lead actor and co-producer of “Rust” was pointing a gun at Hutchins when it went off, killing her and wounding director Joel Souza.

An attorney representing the production company, said the film production tax incentive was going to be used to finance a legal settlement between producers and Hutchins' widower and son.

The attorney helped broker the 2022 settlement that rebooted the stalled production of “Rust” in Montana with some of the original cast and crew, including Baldwin and Souza. Filming wrapped up last year.

Terms of the settlement are confidential, but producers say finishing the film was meant to honor Hutchins' artistic vision and generate money for her young son.

A spokesperson for the New Mexico Taxation and Revenue Department declined to comment specifically on the “Rust” application, citing concerns about confidential taxpayer information. Applications are reviewed for a long list of accounting and claim requirements.

“Rust” does not yet have a U.S. distributor as producers shop the newly completed movie at film festivals.

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