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Friday, May 27, 2022

HOLLYWOOD—Efforts to Retain Film Production Turn to Congress

Twice stymied in its attempts to obtain federal legislation to slow runaway production, a coalition of entertainment industry groups has changed tactics and it seems to be working.

Hoping that it will help them gain broader support, group members are billing their cause as a national problem rather than just Hollywood’s concern. The target of their lobbying efforts: non-California lawmakers sitting on key congressional tax committees.

When Congress returns in September, it will for the third time in three years consider a package of wage-based tax credits that supporters say would level the playing field for U.S. workers who have lost jobs to Canadians and others whose governments offer generous incentives to lure film and television production.

Even advocates acknowledge that the economic climate and President Bush’s tax rebate make getting their bill through Congress this year a dicey proposition at best. And the Independent Film & Television Act of 2001 looks much like earlier, unsuccessful versions of legislation aimed to bring relief for producers who stay at home.

Except for one major difference: the glaring absence of California lawmakers among the bill’s primary backers.

Bipartisan group

Rather than courting legislators from California the state with the most film and television activity lobbyists have shifted their attention to a bipartisan group of lawmakers who sit on the Senate Finance and the House Ways and Means committees. Author Blanche Lambert Lincoln, D-Ark., and two of the Senate bill’s six co-sponsors, Olympia J. Snowe, R-Maine, and John Breaux, D-La., are on the Finance Committee, the origination point for all tax legislation in the Senate.

Next up will be the House Ways and Means Committee, where California lawmakers, including Rep. Xavier Becerra, D-Los Angeles, will play a more prominent role in crafting companion legislation that is due next month.

“This is a very strategic, targeted way of getting this bill passed,” said Dawn Keezer, director of the Pittsburgh Film Office and chair of Film U.S., a national organization made up of nearly 200 state and local film commissions. “It’s all about the committees.”

Aides for Dianne Feinstein and Barbara Boxer said they support the bill and intend to sign on as co-sponsors when Congress resumes, but so far California’s senators have kept a low profile.

One reason is that the bill’s proponents are going to great lengths to portray runaway production as a national problem. This time, they are determined to present legislation that won’t be viewed as an unwarranted bonus that would fatten the wallets of already over-compensated Hollywood producers, a perception that has dogged their efforts in the past.

“They’ve made a strategic decision because they don’t want to be seen as California selfish. They don’t want to be seen as promoting legislation that seems like it only benefits California,” said State Sen. Sheila Kuehl, D-West Los Angeles, an advocate of tax relief for productions that stay in California.

Lincoln has also signed on Sens. Mary Landrieu, D-La., Richard Durbin, D-Ill., Rick Santorum, R-Pa. and Susan Collins, R-Maine, as co-sponsors, none of whom represent states where film and television production is a major part of the economy.

Nevertheless, even a handful of productions can mean a significant boost for those states, both in terms of tax revenues and increased business for merchants and service companies, said Jean Prewitt, president of the American Film Marketing Association, a Los Angeles-based trade group of independent producers and distributors.

“In terms of the big numbers, California has more to lose, but many of these other states have more to lose in proportional terms,” said Prewitt, adding that states such as Illinois, Maine and Louisiana are especially eager to hold on to productions that are set in those places.

Visit from an actor

That’s been a problem in Illinois, said Durbin, who agreed to co-sponsor the bill after a visit by actor Joe Pantoliano, who portrays Ralphie Cifaretto on HBO’s “The Sopranos.”

“I thought he made a very convincing case,” Durbin said. “Chicago has enjoyed a good reputation as a filming locale over the years and we’ve seen a real downturn in production. A lot of the time a movie will be set in Chicago but it will be filmed in Canada.”

Still, most of the groups that support the legislation including the directors’, writers’ and actors’ guilds and the International Alliance of Theatrical Stage Employees are based at least partly in Los Angeles.

Like previous legislative efforts that have stalled before reaching the president’s desk, Lincoln’s bill targets the “middle class” of the production business, stage workers, sound and lighting experts and caterers, for example, who can’t get work visas to follow productions abroad.

It is also designed to help mid-level productions, mostly TV shows with tight budgets in which the estimated 25 percent to 35 percent savings realized by filming abroad is often the difference between red and black ink.

The bill would provide a 25 percent wage tax credit for employers on U.S.-based productions with labor costs falling between $250,000 and $10 million. The credit would jump to 35 percent if the production was based in a low-income community. The $200,000 minimum was included in response to concerns that the government could otherwise end up subsidizing pornographers.

Supporters admit the proposed tax credits are not as generous as incentives offered in Canada and other countries, but they argue the legislation would have its intended effect by narrowing the gap. All things being equal, or even close, most American producers would rather work at home with American crews, Keezer said.

Becerra said the U.S. Commerce Department report released earlier this year that estimated the cost of runaway production at $10 billion a year has added legitimacy to the fight, helping to build national support for wage-based tax credits.

Not every one agrees with those figures, however. In California alone, the entertainment business employed 135,000 people last year, nearly double the amount 10 years earlier when the Commerce department study began tracking the flight of production abroad. Some legislators are sure to see that as a sign that film and television production is not a business that requires federal intervention to remain competitive.

So while he was optimistic about the bill’s prospects, Becerra conceded that the timing may be less than optimal.

“The good news is that we will have a tax bill this year. Whether we’ll be able to add anything to it, we’ll have to see,” he said. “With the big tax cut it makes it more difficult because there is not a lot of money left.”

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