Politicians’ next battle: Stop runaway prod’n

Rep. Dreier hopes bill to be part of economic stimulus package

Undaunted by the focus on the war against Iraq, the key GOP backer of federal anti-runaway-production legislation has pledged to keep pushing a tax credit bill aimed at productions under $10 million.

“I remain very committed to the idea of legislation to level the playing field,” Rep. David Dreier (R-Calif.) told Daily Variety. “It’s in our interest to capitalize on the talent and expertise that’s unique to the United States.”

Bill — backed by Hollywood studios and guilds — is designed to make shooting in the U.S. more attractive to producers who might otherwise be lured away by foreign incentives.

Dreier, who co-authored HR 715 with Rep. Howard Berman (D-Calif.), hopes its provisions can be part of the national economic stimulus package.

On the heels of finalizing $74 billion in Iraq war funding last week, Congress is expected to hammer out a compromise this week on the funding level of the stimulus package. The House approved allocating $724 billion and the Senate opted for $350 billion; details as to which programs receive specific allocations will likely be worked out after the spring recess, Dreier said.

Clear benefits

“Keeping production in the United States is certainly something that has clear economic benefits,” Dreier said, citing the ability of film production spending to create seven times that amount of economic activity. “And it’s important with the war going on for Congress to put out the message that the United States is still working, that the war has not shut us down.”

Dreier, chairman of the House Rules Committee, also said he has received positive responses recently on HR 715 from a trio of powerful players in funding allocations — Sen. Charles Grassley (R-Iowa), chairman of the Senate Finance Committee; Rep. Bill Thomas (R-Calif.), chairman of the Ways & Means Committee; and House Speaker Dennis Hastert (R-Ill.). He noted the runaway issue has resonated with the Illinois-based Hastert since “Chicago” was shot in Canada, with the speaker indicating he would support hearings on the bill.

Growing sponsor list

Dreier emphasized that the legislation has been specifically targeted at aiding the non-star portion of the business. He noted that the number of co-sponsors has grown from 46 to 56 since HR 715 (aka the U.S. Independent Film & TV Act of 2003) was introduced in mid-February.

“So many people in Washington think that everyone gets $20 million per movie, so a lot of what’s involved is educating people,” he added. “We’re trying to let people know what an important resource the industry is.”

Dreier, Berman and Rep. Charles Rangel (D-N.Y.) were co-authors in 2001 of a similar wage-based tax credit bill that failed to find traction during the previous congressional session.

“We’ve always felt that this is something that’s going to require some heavy lifting and that we can’t just snap our fingers and make it happen,” Dreier added. “Legislation is a long, messy and difficult process.”

The legislation will provide a 25% tax credit to the first $25,000 paid to each employee and 35% in low-income areas. Qualified projects, including features, TV, cable, miniseries, telepics and pilots, would have to be shot in the U.S.

Empire state incentives

The original bill was introduced in mid-2001 amid strong support from the guilds and other Hollywood orgs. The House version eventually attracted 74 sponsors, while the Senate bill had 27; a Senate report on the bill found that costs would range from $200 million to $400 million over three years.

The legislation is viewed by proponents as the most effective way for Hollywood to compete with foreign locales that offer the twin inducements of lower costs and government-funded incentives. Backers are pushing for a similar state incentive program in New York, where the issue gained prominence last fall when the Rudolph Giuliani biopic headed to Montreal, but there are no plans to revive California incentive legislation due to the state’s massive deficit.

The New York bill, A5817, would provide a 25% credit on the first $25,000 in wages.

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