[Congressional Record Volume 147, Number 109 (Tuesday, July 31, 2001)]
[Senate]
[Pages S8476-S8477]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. LINCOLN (for herself, Ms. Snowe, Mr. Durbin, Mr. Breaux, 
        and Ms. Landrieu):
  S. 1278. A bill to amend the Internal Revenue Code of 1986 to allow a 
United States independent film and television production wage credit; 
to the Committee on Finance.
  Mrs. LINCOLN. Mr. President, I rise today to introduce the U.S. 
Independent Film and Television Production Incentive Act of 2001, a 
bill designed to address the problem of ``runaway'' film and television 
production. I am joined by Senators Snowe, Durbin, Breaux, and 
Landrieu.
  Over the past decade, production of American film projects has fled 
our borders for foreign locations, migration that results in a massive 
loss for the U.S. economy. My legislation will encourage producers to 
bring feature film and television production projects to cities and 
towns across the United States, thereby stemming that loss.
  In recent years, a number of foreign governments have offered tax and 
other incentives designed to entice production of U.S. motion pictures 
and television programs to their countries. Certain countries, such as 
Australia, Canada, New Zealand, and several European countries, have 
been particularly successful in luring film projects to their towns and 
cities through offers of large tax subsidies.
  These governments understand that the benefits of hosting such 
productions do not flow only to the film and television industry. These 
productions create ripple effects, with revenues and jobs generated in 
a variety of other local businesses. Hotels, restaurants, catering 
companies, equipment rental facilities, transportation vendors, and 
many others benefit from these ripple effects.
  What began as a trickle has become a flood, a significant trend 
affecting both the film and television industry as well as the smaller 
businesses that they support.
  Many specialized trades involved in film production and many of the 
secondary industries that depend on film production, such as equipment 
rental companies, require consistent demand in order to operate 
profitably. This production migration has forced many small- and 
medium-sized companies out of business during the last ten years.
  Earlier this year, a report by the U.S. Department of Commerce 
estimated that runaway production drains as much as $10 billion per 
year from the U.S. economy.
  These losses have been most pronounced in made-for-television movies 
and miniseries productions. According to the report, out of the 308 
U.S.-developed television movies produced in 1998, 139 were produced 
abroad. That's a significant increase from the 30 produced abroad in 
1990.
  The report makes a compelling case that runaway film and television 
production has eroded important segments of a vital American industry. 
According to official labor statistics, more than 270,000 jobs in the 
U.S. are directly involved in film production. By industry estimates, 
70 to 80 percent of these workers are hired at the location where the 
production is filmed.
  And while people may associate the problem of runaway production with 
California, the problem has seriously affected the economies of cities 
and States across the country, given that film production and 
distribution have been among the highest growth industries in the last 
decade. It's an industry with a reach far beyond Hollywood and the west 
coast.
  For example, my home State of Arkansas has been proud to host the 
production of a number of feature and television films, with benefits 
both economic and cultural. Our cinematic history includes the opening 
scenes of ``Gone With the Wind,'' and civil war epics like ``the Blue 
and the Gray'' and ``North and South.'' It also includes ``A Soldier's 
Story,'' ``Biloxi Blues,'' ``the Legend of Boggy Creek,'' and, most 
recently, ``Sling Blade,'' an independent production written by, 
directed by, and starring Arkansas' own Billy Bob Thornton. So even in 
our rural State, there is a great deal of local interest and support 
for the film industry. My bill will make it possible for us to continue 
this tradition, and we hope to encourage more of these projects to come 
to Arkansas.
  But to do this, we need to level the playing field. This bill will 
assist in that effort. It will provide a two-tiered wage tax credit, 
equal to 25 percent of the first $25,000 of qualified wages and 
salaries and 35 percent of such costs if incurred in a ``low-income 
community'', for productions of films, television or cable programming, 
mini-series, episodic television, pilots or movies of the week that are 
substantially produced in the United States.
  This credit is targeted to the segment of the market most vulnerable 
to the impact of runaway film and television production. It is, 
therefore, only available if total wage costs are more than $20,000 and 
less than $10 million (indexed for inflation). The credit is not 
available to any production subject to reporting requirements of 18 USC 
2257 pertaining to films and certain other media with sexually explicit 
conduct.
  My legislation enjoys the support of a broad alliance of groups 
affected by the loss of U.S. production, including the following: 
national, State and local film commissions, under the umbrella 
organization Film US as well as the Entertainment Industry Development 
Corporation; film and television producers, Academy of Television Arts 
and Sciences, the Association of Independent Commercial Producers, the 
American Film Marketing Association, the Producers Guild; organizations 
representing small businesses such as the post-production facilities, 
The Southern California Chapter of the Association of Imaging 
Technology and Sound, and equipment rental companies (Production 
Equipment Rental Association); and organizations representing the 
creative participants in the entertainment industry, Directors Guild of 
America, the Screen Actors Guild and Recording Musicians Association. 
In addition, the United States Conference

[[Page S8477]]

of Mayors formally adopted the ``Runaway Film Production Resolution'' 
at their annual conference in June.
  Leveling the playing field through targeted tax incentives will keep 
film production, and the jobs and revenues it generates, in the United 
States. I urge my colleagues to join me in supporting this bill in 
order to prevent the further deterioration of one of our most American 
of industries and the thousands of jobs and businesses that depend on 
it.
                                 ______