Lawmakers Discuss Ways to Stem Runaway Production

Asserting that runaway production is not just a Hollywood problem but a national one, six congressmen vowed Wednesday to support legislation to encourage filmmakers to stay in the United States instead of leaving for cheaper locales such as Canada and Mexico.

Representatives, led by Rep. Mark Foley (R-Fla.), chairman of the Republican Caucus’ Entertainment Industry Task Force, held a forum at a Burbank hotel to discuss potential measures ranging from tax incentives to trade tariffs.

The most concrete proposal was offered by Rep. Jerry Weller (R-Ill.), who co-wrote a measure to provide up to a $4,000 tax rebate for each worker on lower-budget productions shot domestically.

Weller, who called himself the “Blues Brother” congressman because parts of that movie were shot in his Chicago district, suggested that the bill would have the best chance of passing if it is attached to a larger bill raising the minimum wage. That is slated for consideration this spring.

The crucial step will be convincing Congress that runaway production hurts the U.S. economy as a whole, he said.

“So many people out there wrongly think that this is a Hollywood issue,” Weller said. “It’s not. It’s a Chicago issue. It’s a Texas issue. It’s a New York issue. It’s a national issue.”

Also at the forum were Reps. Howard L. Berman (D-Mission Hills), Gary A. Condit (D-Ceres), Howard P. “Buck” McKeon (R-Santa Clarita) and James E. Rogan (R-Glendale). About 30 people representing different niches of the entertainment industry attended.

Every state faces stiff competition from Canada, which heavily subsidizes its growing film industry. American producers who choose to film north of the border receive substantial tax breaks and benefit from low Canadian currency and cheaper labor.

In 1998, $573 million (the Canadian estimate) to $2.8 billion (the U.S. estimate) of filming skipped off to Canada.

The congressmen said they planned to pressure U.S. trade delegates to confront their Canadian counterparts about film subsidies. A more radical response could be slapping a tariff on films shot outside the U.S., something that several industry representatives advocated at the forum.

Under the North American Free Trade Agreement, the film industry is exempt from free-trade guidelines because it is classified as a cultural industry.

As a result, a movie starring Dennis Rodman and set in Chicago was recently labeled Canadian cultural content--which is ridiculous, Weller said.

Officials in Canada’s film industry, however, defended the practice.

“What we’re doing is not unfair,” Rob Egan, president of the film commission in British Columbia, said in a telephone interview. British Columbia has seen its production revenue rise from $12 million in 1978 to $1 billion in 1998.

“That exemption allows our emerging cultural industries to compete in a huge market.”

Egan said Canadians typically make up 10% of the North American market and should be encouraged to make some movies themselves.

Another idea the congressmen discussed was urging the Small Business Administration to provide loans to American filmmakers to encourage them to film at home.

Runaway production emerged as a major concern last summer, with out-of-work grips, gaffers and other crew members marching down Hollywood Boulevard demanding government action.

But it’s not clear how severe the problem is because although there was a dip in local production this year, there are still thousands more production jobs now than five years ago.

Several state legislators have tried to get bills passed that would give producers tax credits for shooting productions in California, but the governor has yet to sign those bills.

Still, local politicians are encouraged by the rising level of national attention to the problem.

“We have a $30-billion industry that is disappearing in front of our eyes,” said state Assemblyman Scott Wildman (D-Los Angeles), who has been pushing for tax rebates.

“This is national issue, and it’s encouraging to see Congress mobilize around what we started.”