[Congressional Record Volume 148, Number 52 (Wednesday, May 1, 2002)]
[Senate]
[Pages S3605-S3606]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 U.S. INDEPENDENT FILM AND TELEVISION PRODUCTION INCENTIVE ACT OF 2001

  Mrs. LINCOLN. Madam President, I rise to discuss the U.S. Independent 
Film and Television Production Incentive Act of 2001. We are going to 
begin the debate about trade and the initiative of being a part of the 
global economy. We are going to talk about trade as an important tool 
in helping to revive and build our economy in our great Nation, as well 
as building jobs and certainly educating our workforce and building 
industries in our country that are going to be part of this global 
economy in which we find ourselves. The U.S. Independent Film and 
Television Production Incentive Act of 2001 is a bill designed for 
those purposes.
  This is a bill designed to address the problem of runaway film and 
television production which is a major trade-related issue which costs 
our Nation billions of dollars each year.
  Over the past decade, production of American film projects has fled 
our borders for foreign locations, a 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 back 
to the cities and towns across the great United States, thereby 
stemming the loss we have seen in our economy from those runaway films.
  In recent years, a number of foreign governments have offered tax and 
other incentives designed to entice the production of U.S. motion 
pictures and television programs to their countries. Certain countries 
have been particularly successful in luring film projects to their 
towns and cities through such offers as large tax subsidies.
  These governments understand 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 
local businesses: Hotels and restaurants, catering companies, equipment 
rental facilities, transportation vendors, even our State parks and 
other wonderful characteristics that each of our States has such an 
individual way of expressing and the wonderful things they have to 
offer, and many other benefits that fall into this ripple effect.
  What became a trickle has now become, however, a flood, a significant 
trend affecting both the film and television industry as well as the 
smaller businesses 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 to operate profitably.
  This production migration has forced many small and medium-size 
companies out of business during the last 10 years. Earlier this year, 
a report by the U.S. Department of Commerce estimated that runaway 
productions drain as much as $10 billion per year from the U.S. 
economy. These are dollars on which we have depended, that have been a 
vibrant part of our smalltown communities across the United States as 
well, places where we have seen wonderful movie productions because of 
the tremendous amount of incredible scenery our States produce.
  These losses have been most pronounced in made-for-television movies 
and mini-series productions. According to the report, out of 308 U.S.-
developed television movies produced in 1998, 139 were produced abroad. 
That is a significant increase from the 30 that were 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. Those would be the workers in the small 
communities of my State as well as the State of the Presiding Officer.
  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 is an industry with a reach far beyond Hollywood and the 
west coast.
  Even we in Arkansas feel it. 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 opening scenes of ``Gone With the Wind'' and 
civil war epics such as ``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 of Arkansas, 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 and to other States across 
our Nation.
  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 they are 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 $200,000 
and less than $10 million, which is indexed for inflation. The credit 
is not available to any production subject to reporting requirements

[[Page S3606]]

of section 18 of the United States Code 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 and the Producers Guild; 
organizations representing small businesses, such as the postproduction 
facilities, the Southern California Chapter of the Association of 
Imaging Technology and Sound; equipment rental companies, Production 
Equipment Rental Association; and organizations representing the 
creative participants in the entertainment industry, the Directors 
Guild of America, the Screen Actors Guild, and the Recording Musicians 
Association.
  All of these are great Americans who want to keep their work in our 
country, but if it is cost prohibitive, if the objectives and the 
incentives that are provided by these other nations are given to this 
industry that we do not provide, what other choices are they given 
other than to take those jobs, to take those wages, out of our country 
and take them somewhere else?

  In addition, the U.S. Conference 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 all of my colleagues, as we talk about trade, as we talk about 
being a part of this global economy, as we talk about creating the jobs 
we want, that we have, and we would like to keep in the United States, 
to join me in supporting this bill in order to prevent the further 
deterioration of one of America's most important industries, and the 
thousands of jobs and businesses that depend on it.
  Think of what it could do for small towns, for the main streets of 
America, to have a film produced there. They would not only have the 
cultural advantage, the economic advantage but the sense of pride and 
joy in being able to keep this industry in our country and doing what 
everybody can be most proud of, and that is sharing our home States and 
all of the many things we are all proud of in our home States in the 
production of American films.

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