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Runaway Production Bill Introduced in U.S. House of Representatives
On October 16 U.S. Congressman David Dreier (R-Calif.), Chairman of the House Rules Committee, along with Congressman Charles B. Rangel (D-N.Y.), ranking Democrat on the Ways and Means Committee, and Howard L. Berman (D-Calif.), ranking Democrat on the Intellectual Property Subcommittee, introduced H.R. 3131, "The United States Film and Television Production Incentive Act of 2001." They were joined by 11 co-sponsors.
"This bill will provide much-needed economic stimulus to small businesses and all cities and towns that benefit from U.S. film and television production," said Congressman Dreier. "Unfortunately, there has been an alarming trend in runaway production because other countries are providing unfair subsidies and incentives to lure production out of America. By providing tax incentives to employees on qualified U.S. productions, we will be able to compete on a level playing field. With all things equal, because of America's superior workforce, production companies will stay in America."
H.R. 3131 is a companion bill to S.B. 1278 introduced in the Senate by Senator Blanche Lincoln (D-Ark.) in July.
The most recent U.S. government and industry measurements of economic activity indicate that motion picture and television production generates revenue of more than $50 billion per year, employing directly or indirectly more than 630,000 Americans.
"Film and television production is an integral part of America's economy and a vital element of New York's economy," Congressman Rangel said. "New York is also one of the most popular settings for much of America's entertainment, but because of the production tax incentives and subsidies offered by foreign countries, we too often see films using foreign cities instead. Now, more than ever, we need legislation that will help bring these productions and the jobs and revenues they create for the hotels, restaurants, caterers and other businesses back to New York, and back to America."
According to a U.S. Department of Commerce Report released earlier this year, foreign tax incentives designed to lure film production offshore are costing the U.S. economy as much as $10 billion annually. These losses are not confined to the entertainment industry. They also deeply impact U.S. small businesses that service the industry, including hotels, restaurants, catering companies, equipment rental facilities and transportation vendors.
"Throughout my entire lifetime, the television and film industry has been a vibrant and vital part of our Los Angeles economy," said Congressman Berman. "The whole 'chain' of production — including suppliers and service companies that do business with production companies — has provided jobs that have sustained tens of thousands of our households. We cannot permit the loss of these jobs without a struggle. As long as Canada is offering massive incentives that destroy the entire notion of free competition, then we're patsies if we don't take action to fight back."
H.R. 3131 provides a wage-based tax credit for productions of films, television or cable programming, miniseries, episodic television and movies of the week that are produced in the United States with total wage costs between $200,000 and $10 million. The amount of the wage tax credit, in most cases, would be 25% of the first $25,000 in qualified wages per employee. In low-income areas that qualify under the existing "new markets" tax initiatives, the credit would be 35%.
Other original co-sponsors of the legislation are Xavier Becerra (D-Calif.), Mary Bono (R-Calif.), Gary Condit (D-Calif.), Jennifer Dunn (R-Wash.), Mark Foley (R-Fla.), William Jefferson (D-La.), Robert Matsui (D-Calif.), Karen McCarthy (D-Mo.), Mike McIntyre (D-N.C.), Anthony Weiner (D-N.Y.) and Jerry Weller (R-Ill.).
S.B. 1278 and H.R. 3131 are strongly supported by a broad alliance of producers, small businesses, industry based organizations, guilds, unions, film commissions, mayors, chambers of commerce, and hotel industry representatives across the country representing hundreds of thousands of businesses and workers. Members of the alliance include the Academy of Television Arts and Sciences (ATAS), American Film Marketing Association (AFMA), Association of Independent Commercial Producers (AICP), Directors Guild of America (DGA), Entertainment Industry Development Corporation (EIDC), Film US (an association of nearly 200 national, state and local film commissions), International Alliance of Theatrical Stage Employees (IATSE), Southern California Chapter of the Association of Imaging Technology and Sound (ITS), Producers Guild of America (PGA), Production Equipment Rental Association (PERA), Recording Musicians Association (RMA), Screen Actors Guild (SAG), Theatrical and Television Motion Picture Special Payments Fund (TTMP) and the Writers Guild of America, west (WGA, w). The U.S. Conference of Mayors is also an active supporter of the wage credit and related efforts of the alliance.
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