Runaway support

Key congressmen back prod'n tax break bill

Key congressmen pledged Wednesday to back anti-runaway production legislation in the upcoming session following a conference with a coalition of entertainment industry guilds, producers and trade groups.

“I think there’s a genuine interest among members of Congress in this issue,” Rep. Mark Foley (R-Fla.), head of the House Entertainment Task Force, said at the conclusion of the two-hour meeting at the Burbank Hilton. “The climate is good. I expect there will be significant legislation introduced within the next few months.”

The coalition, which scheduled the meeting to come a day before the opening of the Sundance Film Festival, attempted to emphasize the continued losses of U.S. productions to less-expensive foreign locations and to propose improved versions of federal legislation to combat that trend. Last year’s bill, which would have created tax incentives for U.S. productions under $10 million, died in November when the House Ways and Means Committee did not bring the issue up for a vote after Ways and Means chairman Bill Archer opposed the issue citing potential costs to taxpayers.

National problem

Rep. Jerry Weller (R-Ill.), the tax credit’s primary author, told the meeting that it was crucial for proponents of any legislation to make a strong case that the damage from runaway production extends far beyond Southern California. “I took it very personally when ‘Blues Brothers 2000’ was filmed in Toronto instead of Chicago and Joliet,” Weller said. “Runaway production is a national issue and we have to work together to convince others that it’s not just a Hollywood issue.”

The coalition proposed three major legislative initiatives Wednesday: a 20% income tax credit for each worker’s wages (up to $20,000) for productions with budgets between $500,000 and $10 million; a research and development tax credit for digital post-production equipment; and an increase in Small Business Administration loans to $1 million from $750,000 for entertainment industry businesses. The income tax credit proposal includes language specifically designed to exclude adult films, an issue which Archer’s staff raised last fall.

Weller indicated he plans to introduce a stand-alone tax credit bill next month but California delegation member Gary Condit (D-Merced) suggested it would fare better if attached to broader tax legislation. Three Southern Californians — Howard Berman (D-Mission Hills), Howard “Buck” McKeon (R-Santa Clarita) and James Rogan (R-Glendale) — renewed pledges of support and offered a cautiously optimistic outlook with Rogan noting that legislation does not need to match foreign incentives in order to be effective.

Filmmaker Roger Corman agreed, saying that less than half of the typical 20% credit would be enough to keep most runaway productions in the United States. Corman also told the meeting that he has decided to sell his Concorde/New Horizons studio property in Venice and will shift most of his company’s production to his four-year-old studio in Galway, Ireland, where that nation’s government provided him with a $1 million grant to build the facility.

“The United States is the only major country that does not give some form of aid to the film industry,” he added. “For it to hold on to the industry, the government must give some form of aid.”

Trend continues

Other industry representatives stressed that the trends have continued along the lines detailed in last summer’s report, commissioned by the Screen Actors Guild and the Directors Guild of America with the assertion that runaway production from the U.S. created $2.8 billion in direct losses and $10.3 billion in negative economic impact in 1998. “All it will take is one major labor dispute to shift the industry out of the country,” said former SAG president Richard Masur.

Foley announced creation last fall of the task force. Besides DGA and SAG, the coalition includes Film US, representing about 200 U.S. film commissions; American Film Marketing Assn.; Academy of Television, Arts & Sciences; Assn. of Imaging, Technology & Sound; Producers Guild of America; Production Rental Equipment Assn.; and Recording Musicians Assn.

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