[Congressional Record (Bound Edition), Volume 155 (2009), Part 10]
[Extensions of Remarks]
[Pages 14113-14114]
[From the U.S. Government Publishing Office, www.gpo.gov]




               FILM AND TELEVISION EXPENSING LEGISLATION

                                 ______
                                 

                          HON. JOSEPH CROWLEY

                              of new york

                    in the house of representatives

                         Thursday, June 4, 2009

  Mr. CROWLEY. Madam Speaker, I rise with my colleague from California, 
Congressman David Dreier, to introduce legislation to amend Federal tax 
law to allow for the immediate tax write-off of the first $15 million 
(or $20 million in those select cases where the production is made in a 
distressed community) of production expenditures for qualifying 
domestic film and television productions.
  This provision, Section 181 of the Internal Revenue Code, was first 
enacted in the American Jobs Creation Act of 2004 and extended in 2008. 
It was added to protect the U.S. television and film industry that is 
increasingly filming in foreign locations, such as Canada.
  In so doing, Congress recognized the important contribution our 
television and film production industries make to sustaining jobs in 
communities across the country. These productions provide good jobs not 
just for actors, writers and directors, but also for the local 
carpenters and electricians, the drivers and equipment operators, the 
caterers and hotel keepers who provide services to these productions.
  Adoption of Section 181 also represented Congressional recognition of 
the fact that this vital sector faces increasing competition from 
foreign production companies whose governments subsidize television and 
film production.
  In 2001, the Commerce Department's International Trade Administration 
reported that made-for-television production of ``movies of the week'' 
in the U.S. had declined by 33 percent since 1995 and that production 
at foreign locations increased by 55 percent.
  The Directors Guild of America noted at the time that 
``globalization, rising costs, foreign wage, tax and financing 
incentives, and technological advances, combined are causing a 
substantial transformation of what used to be a quintessentially 
American industry into an increasingly dispersed global industry.''
  Section 181 of the Internal Revenue Code allows production companies 
to deduct the cost of qualified U.S. productions immediately rather 
than capitalizing the costs and deducting them slowly over time.
  The incentive accelerates the timing of deduction but it does not 
change the amount of the deduction. In order to qualify, at least 75 
percent of the total compensation paid for the production must be for 
services performed in the U.S. by actors, directors, producers and 
other production staff personnel. The deduction applies to the first 
$15 million ($20 million for productions in low income communities or 
distressed area or isolated area of distress) of a qualified film or 
television production. The cost of the production above the dollar 
limitation is capitalized and recovered under the taxpayer's method of 
accounting.
  I believe that this was an appropriately targeted provision, designed 
to encourage television and film producers to stay here in the United 
States and keep those jobs in our communities. In the last decades, New 
York City and in particular my home borough of Queens has seen a 
resurgent television and film production sector bring new jobs and 
revenue into the community. This bill will help to ensure that those 
jobs stay here in the U.S.
  The Center for Entertainment Industry Data and Research's Year 2005 
Production Report concluded that Section 181 ``is having a positive 
effect on television production in the U.S.'' Since 2004, it reported 
that made-for-television movie production in the U.S. increased by 42 
percent, while it fell in Canada by 15 percent.
  Along with my Republican sponsor, Congressman David Dreier of 
California and myself who hails from Queens, New York, the television 
and film industries are both major employers and major tax providers to 
our local, state and national economies. This legislation works to 
protect these industries and stem the flood of production to non-U.S. 
locations.
  Section 181 will expire in 2009. It ought to be made a permanent 
provision of our tax code in order to keep television and film 
production jobs in the United States.

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