John Conyers

Mr. CONYERS

Mr. CONYERS. Mr. Speaker, I support passage of this legislation, which makes two positive changes to immigration law. First, because of how current immigration law operates, multi-national companies are having a difficult time encouraging overseas employees to work in the United States. This is because U.S. law would not permit the spouses of those employees to work here; in essence, if the employee wants to relocate to the United States with a spouse, that spouse would have to give up his or her career. The effect is to deny such families the ability to seek two incomes and to limit our revenues from taxing that second income. To rectify this, H.R. 2278 changes the law so that spouses of intra-company transferees can work in the United States. Second, current law requires that intra-company transferees be continuously employed in the United States for one year before being eligible for permanent residency here. This long waiting period makes it difficult for employers to bring qualified employees to the United States. H.R. 2278 corrects this situation by reducing the waiting period to six months. This bill is good for immigrant families, and it is good for employers.

Mr. CONYERS

Mr. CONYERS. Mr. Chairman, I reserve my time.

Mr. CONYERS. Mr. Chairman, I yield 1 minute to the gentleman from Texas (Mr. Sandlin).

Mr. CONYERS. Mr. Chairman, I demand a recorded vote.

Mr. CONYERS. Mr. Chairman, I yield myself 1\1/2\ minutes to first, hopefully correct the chairman of the Committee on the Judiciary, the gentleman from Wisconsin (Mr. Sensenbrenner), who asserted that lawyers were getting huge fees. All fees, most Members know, are controlled by the court. Any exorbitant fees are not permitted. And from time immemorial, lawyers get one-third of the recovery. If that is what we are complaining about, we should make it clear that anything more excessive is controlled by the court. Then, the gentleman from California (Mr. Cox), the floor manager, has asserted that the bill does not cap punitive damages. Now if, unfortunately, a physician rapes a patient, many would say she has no economic damages, she may have no lost wages and negligible medical costs. So the Cox amendment would, in that case, cap her punitive damages at $250,000.

Mr. CONYERS. Sir, control yourself. So, I say to the gentleman from California (Mr. Cox), it is incorrect, I repeat, incorrect to assert that this amendment does not cap punitive damages. If the gentleman takes issue with that, he may use his own time and explain to the membership what he disagrees about. Mr. Chairman, I yield 1 minute to the gentleman from Iowa (Mr. Ganske).

Mr. CONYERS. Mr. Chairman, I am pleased to yield 1 minute to the gentlewoman from Ohio (Mrs. Jones), a lawyer, prosecutor, and former judge.

Mr. CONYERS. Parliamentary inquiry, Mr. Chairman.

Mr. CONYERS. Mr. Chairman, I thank the Chair for answering my anticipated question. Mr. Chairman, I yield the balance of my time to the gentlewoman from Colorado (Ms. DeGette).

Mr. CONYERS. Mr. Chairman, I yield myself such time as I may consume. Ladies and gentlemen of the House, we are now reaching perhaps the worst amendment on medical malpractice that has ever been brought forward to the House of Representatives. I say that carefully because the one that the Republicans brought forward in 1995 was a real doozy, but this one goes further than that one. This caps doctors and hospitals. What makes it worse than 1995 is that it extends medical malpractice protection to insurance and HMO companies. Secondly, it lowers punitive damage caps to only two times the economic damages, or $250,000, where the 1995 bill in its generosity limited it to three times economic damages, or $250,000. Third, it has new limitations on accruing interest on noneconomic damages. Finally, it applies limitations to private settlements as well as court cases. So here in a system where each State has heretofore determined what the economic damages would be, what the noneconomic damages would be, what the punitive damages would be, here the majority party in this body has now determined that we are not only going to protect HMOs, we are going to cap suits against doctors and hospitals. In a single stroke, the Thomas amendment, which is joined in by several chairmen on the other side as well, would place an arbitrary and capricious cap on the ability of the millions of persons harmed by medical negligence to recover in their own State courts. This amendment is even worse than the coverage in the Norwood amendment; and as I have said, this is the most severe and limiting malpractice amendment ever considered by the House. If it were adopted, Congress would be saying to the American people, We don't care if you lose your ability to bear children; we don't care if you're forced to bear excruciating pain for the remainder of your life; we don't care if you're permanently disfigured or crippled, because under this amendment, a medical professional who fell asleep in the operating room or operated on the wrong patient would be completely insulated from punitive damages. The language goes so far as to cap the liability of a doctor, heaven forbid, who even rapes his patient. Do Members not know that punitive damages are the only way to deter such outrageous conduct? The new statute of limitations takes no account of the fact that many injuries caused by malpractice or faulty drugs take years, sometimes decades, to manifest themselves. Under this proposal, a patient who is negligently inflicted with HIV-infected blood and develops AIDS 6 years later would be forever barred from filing a liability claim. The so-called periodic payment provisions are nothing less than a Federal installment plan for HMOs. The bill allows insurance companies teetering on the verge of bankruptcy to delay and then completely avoid future financial obligations. Have you no shame? They would have no obligation to pay interest on amounts they owe their victims. And guess what else happens under this sweetheart deal of an amendment? The drug companies, the producers of killer devices like the Dalkon Shield, the Cooper-7 IUD, high absorbency tampons linked to toxic shock syndrome and silicone gel implants, all would have completely avoided billions of dollars in damages had this bill been law. Somewhere between 80 to 100,000 people die in this country each year from medical malpractice. It is the third leading cause of preventable deaths in America. If we pass this amendment, there is no question that the pain and suffering and deaths will increase. And this Congress will be to blame. Therefore, I urge a ``no'' vote on the Thomas amendment. Mr. Chairman, this ``poison pill'' amendment represents the most far reaching and dangerous malpractice provision ever considered by the Congress, and is even worse than previous malpractice limitations passed during the ``Contract with America.'' Unlike previous malpractice amendments taken up the Republican House, this would apply to limit HMO and insurance company liability. It would also supersede state laws to severely limit recoveries by harmed patients. The following is a more detailed description. Scope and Preemption (Secs. 802,809)--the amendment preempts state law and the federal torts claims act with regard to any health care actions, even privately negotiated claims and those submitted to arbitration. This means the bill would limit the liability of physicians, drug companies, and hospitals. In addition, it would limit the liability of HMO's and insurance companies in a far more severe fashion that the Norwood amendment or the Fletcher bill. Statute of limitations/repose (Sec. 803)--provides for a statute of limitations that prohibits victims from bringing any health care lawsuit more than two years after an injury is discovered. It also provides for a statute of repose that prohibits victims from bringing any health care lawsuit more than five years after the negligent conduct that caused the injury first occurred. The above time limitations for initiating a health care lawsuit will not apply in cases where there is a ``malicious'' intent to injure--an almost impossible standard to meet. Thus under the proposal, a patient who is negligently inflicted with HIV-inflected blood and develops AIDS 6 years later would be forever barred from filing a medical malpractice or product liability claim. Cap on Non-economic Damages (Sec. 804(b), (c))--caps the award of non-economic damages in health care lawsuits at $250,000 regardless of the number of defendants involved. These caps are far more restrictive than the caps on non-economic damages proposed in the Norwood amendment of $1.5 million. Although harder to scientifically measure, non- economic damages compensate victims for real losses--such as loss of sight, disfigurement, inability to bear children, incontinence, inability to feed or bathe oneself, or loss of a limb--that are not accounted for in lost wages. Caps on non-economic damages would unfairly penalize those victims who suffer the most severe injury and are most in need of financial security. Non-economic damage caps have also been found to have a disproportionately negative impact on women, minorities, the poor, the young, and the unemployed; since they generally have lower wages, a greater proportion of their losses is non-economic. The bill also provides that an award for future non- economic damages will not be discounted to present value, which would appear to mean that there will be no adjustment made for inflation when non-economic damages are awarded. This restriction has never been proposed in any previous malpractice amendment. Joint and Several Liability (804)(d))--provides that in any health care lawsuit concerning the provision of health care goods or services, each party shall be liable only for the amount of damages allocated to such party in direct proportion to such party's percentage of responsibility. This provision eliminates the state doctrine of joint and several liability for non-economic damages, and raises the concern that instead of placing the burden of financial loss on the identifiable defendant, victims who prevail on a liability claim may not be able to recover all of their damages. Collateral Source (804(e))--eliminates the collateral source rule by allowing defendants in medical malpractice cases to unilaterally introduce evidence of collateral source payments received or to be received by the claimant, such as health or disability insurance. In most states under the collateral source rule, a victim is able to obtain compensation for the full amount of damages incurred, and his or her health insurance provider is able to seek subrogation in respect of its own payments to the victim. This ensures that the true cost of damages lies with the wrongdoer while eliminating the possibility of double recovery by the victim. The Thomas amendment would turn this system on its head by allowing tortfeasors to introduce evidence of potential collateral payments owing from the insurer to the victim. This would have the effect of shifting costs from negligent health care providers at the expense of injured victims. Limits on Punitive Damages (804(f))--caps punitive damage awards at the greater of $250,000 or two times economic damages and limits the state law standard for the award of punitive damages to intentional or ``consciously indifferent'' conduct; and allows for a bifurcated proceeding to determine issues relating to punitive damages. Again, the cap on punitive damages in the Thomas amendment is far worse than even the Norwood amendment which caps punitive damages at $1.5 million. It is also more severe than previously considered malpractice amendments. Punitive damages impose punishment for outrageous and deliberate misconduct and they deter others from engaging in similar behavior. Collectively, these restrictions on punitive damages are likely to completely eliminate not only the incentive for seeking punitive damages, but any realistic possibility of obtaining them. Permitting defendants to bifurcate proceedings concerning the award of punitive damages will lead to far more costly and time-consuming proceedings, again working to the disadvantage of injured victims. Periodic Payments (805)--grants wrongdoers the option of paying damage awards in excess of $50,000 on an ``installment plan.'' This provision would apply not only to future economic damages realized over time, such as lost wages, but to non-economic losses, like the loss of a limb, that are realized all at once. Also, in contrast to many state law periodic payment provisions, the Thomas proposal does not seek to protect the victim from the risk of nonpayment resulting from future insolvency by the wrongdoer or to specify that future payments should be increased to account for inflation or to reflect changed circumstances. Elimination of Punitive Damages for FDA approved health care products--completely bans punitive damages in the case of drugs or other devices that have been approved by the FDA or any other drug ``generally recognized as safe and effective'' pursuant to FDA- established conditions. Injuries from medical devices have an estimated cost of $26 billion annually. It is problematic to use compliance with the FDA as a basis for immunity from punitive damages when those regulations have proven inadequate to protect patients numerous times in the past. Government safety standards, at their best, establish only a minimum level of protection for the public. At their worst, they can become outdated, under-protective or under-enforced. Providing immunity from punitive damages to these manufacturers would eliminate the possibility of recovering these costs and would shift the burden to the injured patient. Banning punitive damages for FDA-approved products will also have a disproportionate impact on women and seniors, since they make up the largest class of victims of medical products. The Thomas amendment also ignores a number of complex legal issues. For example, in the state law context, various damage caps have been held to violate state constitutional guarantees relating to equal protection, due process, and rights of trial by jury and access to the courts; and these very same concerns will surely be present at the Federal level. And by layering a system of Federal rules on top of a two-century old system of State common law, the Thomas amendment will inevitably lead to confusing conflicts, not only within the Federal and State courts, but between Federal and State courts. Mr. Chairman, I reserve the balance of my time.

Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentleman from Virginia (Mr. Scott), a member of the Committee on the Judiciary.

Mr. CONYERS. Mr. Chairman, I yield myself 1 minute. I just want to ask the floor manager, the gentleman from California (Mr. Cox), if I heard him correctly when he said that this measure before us preempts no State law. I yield to him for a yes or no response.

Mr. CONYERS. Mr. Chairman, I reserve my time.

Mr. CONYERS. Mr. Chairman, I yield 2 minutes to the gentlewoman from California (Mrs. Davis).

Mr. CONYERS. Mr. Chairman, I yield myself 20 seconds merely to point out to the distinguished floor manager, the gentleman from California (Mr. Cox), that on page 10, section 809, lines 21 and 22, it says, ``This title shall apply to any health care lawsuit brought in a Federal or State court.'' I presume the State court is operating under State law. Mr. Chairman, I yield 2 minutes to the distinguished gentleman from New York (Mr. Nadler), a member of the Committee on the Judiciary.

Mr. CONYERS. Mr. Chairman, I am pleased to yield 2 minutes to the gentlewoman from Texas (Ms. Jackson-Lee), a valued member of the Committee on the Judiciary. (Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. CONYERS

Mr. CONYERS. Mr. Speaker, I submit the following insightful and poignant article, by Lance Simmens and Pamela Conley Ulich, from the Loyola of of Los Angeles Entertainment Law Review, for publication in the Congressional Record. ``Bye, Bye Miss American pic, drove my Daimler to the movies to see a foreign- made flic; And good old actors were drinking whiskey and beer, singing this is the day we're unemployed here, this will be the day we're unemployed here.'' I. Introduction Globalization profoundly impacts traditional ways of conducting business, and the entertainment industry is not immune from the new economics drastically changing the world. Could Hollywood become ``Hollyhasbeen''? Will television and theatrical motion pictures shot in the United States go the way of the American car and American-made clothing? Runaway production has caused serious labor issues, including the dislocation of thousands of workers and jobs. In 1998, twenty-seven percent of films released in the United States were produced abroad, and an estimated 20,000 jobs were lost to foreign countries. Lower exchange rates, direct government subsidies and lower labor wages enticed American production companies to film in foreign locales. In 1998, the direct economic loss of runaway production was $2.8 billion. When coupled with the loss of ancillary business, the losses likely totaled $10.3 billion for 1998 alone. These loses juxtapose with the issues of free trade versus fair trade in an uneasy balance. This article considers why many television and theatrical motion pictures targeted primarily at U.S. audiences are not made in America. It also examines the economic impact resulting from the flight of such productions. Finally, it considers possible solutions in an effort to reverse the trend. II. The History of ``Runaway Production'' Runaway production is not a new phenomenon. In December 1957, the Hollywood American Federation of Labor (``AFL'') Film Council, an organization of twenty-eight AFL-CIO unions, prepared a report entitled ``Hollywood at the Crossroads: An Economic Study of the Motion Picture Industry.'' This report addressed runaway production and indicated that prior to 1949, there were an ``insignificant'' number of American- interest features made abroad. However, the report indicated a drastic increase in productions shot abroad between 1949 and 1957. At that time four major studios--Columbia Pictures, Inc. (``Columbia''), Twentieth-Century Fox, Inc. (``Fox''), Metro-Goldwyn-Mayer (``MGM'') and United Artists, Inc. (``United Artists'')--produced 314 films. Of these films, 159, or 50.6 percent, were shot outside the United States. It also revealed runaway films were shot primarily in the United Kingdom, Italy, Mexico, France and On December 1, 1961, H. O'Neil Shanks, John Lehners and Robert Gilbert of the Hollywood AFL Film Council testified regarding runaway productions before the Education and Labor Subcommittee on the Impact of Imports and Exports on American Employment. Shanks explained to the subcommittee: ``Apart from the fact that thousands of job opportunities for motion picture technicians, musicians, and players are being ``exported'' to other countries at the expense of American citizens residing in the State of California, the State of New York, and in other States because of runaway production this unfortunate trend . . . threatens to destroy a valuable national asset in the field of world-wide mass communications, which is vital to our national interest and security. If Hollywood is thus permitted to become ``obsolete as a production center'' and the United States voluntarily surrenders its position of world leadership in the field of theatrical motion pictures, the chance to present a more favorable American image on the movie screens of non- Communist countries in reply to the cold war attacks of our Soviet adversaries will be lost forever.'' John ``Jack'' L. Dales, Executive Secretary of the Screen Actors Guild (``SAG''), and actor Charlton Heston also testified before this subcommittee. Dales stated: ``We examined and laid out, without evasion, all the causes [of runaway production] we knew. Included as impelling foreign production were foreign financial subsidies, tax avoidance, lower production costs, popularity of authentic locale, frozen funds--all complex reasons. We urged Congressional action in two primary areas: 1) fight subsidy with subsidy. Use the present 10 percent admissions tax to create a domestic subsidy; 2) taxes . . . We proposed consideration of a spread of five or seven years over which tax would be paid on the average, not on the highest, income for those years.'' Despite these impassioned pleas, runaway production has continued to grow in importance, scope and visibility. Today it ranks among the most critical issues confronting the entertainment industry. The issue received increased attention in June 1999, when SAG and the Directors Guild of America (``DGA'') commissioned a Monitor Company report, ``The Economic Impact of U.S. Film and Television Runaway Production'' (``Monitor Report''), that analyzed the quantity of motion pictures shot abroad and resulting losses to the American economy. In January 2001, concerns over runaway production were addressed in a report prepared by the United States Department of Commerce. The eighty-eight page document (``Department of Commerce Report'') was produced at the request of a bipartisan congressional group. Like the Monitor Report, the Department of Commerce Report acknowledged the ``flight of U.S. television and cinematic film production to foreign shores.'' Both reports quantify the nature and depth of the problem and warn of further proliferation if left unchecked. Additionally, the media is bringing the issue of runaway production to the attention of the general public. Numerous newspaper articles have focused on the concerns cited in the Monitor Report. For example, in The Washington Post, Lorenzo di Bonaventura, Warner Bros. president of production, explained the runaway production issue as follows: ``For studios, the economics of moving production overseas are tempting. The Matrix cost us 30 percent less than it would have if we shot in the United States. . . . The rate of exchange is 62 cents on the dollar. Labor costs, construction materials are all lower. And they want us more. They are very embracing when we come to them.'' Di Bonaventura indicated Warner Bros. received $12 million in tax incentives for filming The Matrix in Australia. This is a significant savings for a film that cost approximately $62 million to produce. III. Causes of Runaway Production In the Department of Commerce Report, the government delineated factors leading to runaway film and television production. These factors have contributed to the ``substantial transformation of what used to be a traditional and quintessentially American industry into an increasingly dispersed global industry.'' A. Vertical Integration: Globalization Vertical integration is defined by the International Monetary Fund as ``the increasing integration of economics around the world, particularly through trade and financial flows.'' The term may also refer to ``the movement of people (labor) and knowledge (technology) across international borders.'' Consequently, companies must now be productive and international in order to profit. Because companies are generally more interested in profits than in people, companies are often not loyal to communities in which they have flourished. Instead, they solely consider the bottom line in the process of making business decisions. Columbia is an excellent example of the conversion from a traditional U.S.-based company to a global enterprise. Columbia began in 1918 when independent producer Harry Cohn, his brother Jack and their associate Joe Brandt, started the company with a $100,000 loan. In 1926, Columbia purchased a small lot on Gower Street in Hollywood, California, with just two sound stages and a small office building. In 1929, Columbia's success began when it produced its first ``talkie'' feature, The Donovan Affair, directed by Frank Capra, who would become an important asset to Columbia. Capra went on to produce other box office successes for Columbia such as You Can't Take It With You and Mr. Smith Goes to Washington. In 1966, Columbia faced a takeover attempt by the Banque de Pan's et de Pays-Bas, owner of twenty percent of Columbia, and Maurice Clairmont, a well-known corporate raider. The Communications Act of 1934 prohibited foreign ownership of more than one-fifth of an American company with broadcast holdings. The Banque de Pan's could not legally take over Columbia because one of Columbia's subsidiaries, Screen Gems, held a number of television In 1988, Columbia's share of domestic box office receipts fell to 3.5 percent and Columbia registered a $104 million loss. In late 1989, Columbia entered into an agreement with Sony USA, Inc., a subsidiary of Japan's Sony Corporation, for the purchase of all of Columbia's outstanding stock. This acquisition apparently did not violate the amended Communications Act. Following in Columbia's footsteps, other studios have globalized through foreign ownership. Universal Studios, Inc. (``Universal''), previously the Music Corporation of America, was acquired by the Japanese electronics company Matsushita in 1991, and four years later was purchased by Seagram, a Canadian company headquartered in Montreal. In 1985, Australian media mogul Rupert Murdoch acquired a controlling interest in Fox, and Time, Inc., a publishing and cable television giant, acquired Warner Bros. in 1989. As studios become multinational, their loyalty to the community or country in which they were born wanes. The international corporations are no longer concerned with the ramifications of moving production outside of their community or country; they are instead concerned only with bottom-line profits, Columbia exemplifies globalization. Columbia no longer owns a studio lot, let alone its humble beginnings on Gower Street. The Studio simply rents office space in a building in Culver City, California. Not surprisingly, global corporations think globally, not locally. Shooting abroad is not only acceptable, but preferable to companies who are not loyal to any one country. B. Rising Production and Distribution Costs and Decreasing Profits By the end of the 1990s, studio executives began to alter their business methods. Despite aggressive cost-cutting, layoffs, strategic joint ventures and movement of production to foreign shores, rising production and distribution costs have consumed profits over the last decade. Production costs rose from an average of $26.8 million to $51.5 million. Distribution costs for new feature films more than doubled. In 1990, the average motion picture cost $11.97 million to distribute, and by 1999, the costs rose to $24.53 million. At the same time, profit margins dropped. For example, Disney Studio's profits decreased from 25 percent in 1987 to 19 percent in 1997, and Viacom's profits dropped from 13 percent in 1987 to less than 6.5 percent in 1997. Additionally, both Time Warner and News Corporation, parent of Fox, showed declining profits as well. C. Technological Advances According to the Department of Commerce Report, ``New technologies and tools may well be contributing to the increase in the amount of foreign production of U.S. entertainment programming.'' Ten years ago, even if a foreign country had lower labor costs, it would have been prohibitively expensive to transport equipment and qualified technicians to produce a quality picture abroad. However, new technology is defeating that obstacle. Scenes shot on film must be transferred or scanned into a videotape format; this process creates what is referred to as dailies. However, many foreign production centers are unable to instantaneously produce dailies D. Government Sweeteners Canada is extremely aggressive in its application of both Federal and provincial subsidies to entice production north of the border: At the federal level, the Canadian government offers tax credits to compensate for salary and wages, provides funding for equity investment, and provides working capital loans. At the provincial level, similar tax credits are offered, as well as incentives through the waiving of fees for parking, permits, location, and other local costs. These enticements equal a sizeable economic benefit. According to the Monitor Report, ``U.S.-developed productions located in Canada have been able to realize total savings, including incentives and other cost reducing characteristics of producing in Canada, of up to twenty-six percent.'' The Department of Commerce Report carefully delineates a plethora of incentives employed by a host of countries. It concludes the undeniable impact of these programs is to weaken the market position of the U.S. film-making industry and those who depend on the industry for employment. E. Exchange Rates Because the U.S. dollar is stronger than Canadian, Australian and U.K. currencies, American producers have more purchase power when they opt to film abroad. As a result, producers are tempted to locate where the dollar has the most value. The Canadian, Australian and U.K. currencies have all declined by fifteen to twenty-three percent, relative to the U.S. dollar, since 1990. IV. The Impact of Runaway Production A. The Economic Impact In total, U.S. workers and the government lost $10.3 billion to economic runaways in 1998. According to the Monitor Report, ``$2.8 billion in direct expenditures were lost to the United States in 1998 from both theatrical films and television economic runaways.'' For example, if a theatrical picture is shot in New York, then carpenters are employed to make the set, caterers are employed to prepare and serve food, and costume designers are hired to provide wardrobe. As the Department of Commerce Report explains, ``Behind the polished, finished film product there are tens of thousands of technicians, less well-known actors, assistant directors and unit production managers, artists, specialists, post-production workers, set movers, extras, construction workers, and other workers in fields too numerous to mention.'' This fiscal loss ripples through the economy affecting peripheral industries. In addition to the direct economic loss discussed above, the Monitor Report calculated an additional $5.6 billion lost in indirect expenditures. Indirect expenditures include real estate, restaurants, clothing and hotel revenues, which are not realized. In addition to these private industry losses, the govenment lost $1.9 billion in taxes to runaway production. As opposed to the $10.3 billion lost in 1998, the study estimated those figures will be between $13 and $15 billion in 2001. B. The U.S. Production Drought The Monitor Report stated that between 1990 and 1998, U.S. film production growth fell sharply behind the growth occurring in the top U.S. runaway production locations of Canada, Australia and the U.K. It stated that Australia ``is growing 26.4 percent annually in production of U.S.-developed feature films, or more than three times the U.S. growth rate.'' Similarly, ``Canada is growing at 18.2 percent annually in production of U.S.-developed television projects, more than double the U.S. rate.'' During the same period, annual growth rates in the United States were 8.2 percent for feature films, and 2.6 percent for television. C. Job Loss Runaway production also impacts the U.S. labor market. It is estimated there are 270,000 jobs directly tied to film production. It is further estimated that 20,000 jobs were lost in 1998 alone due to runaway production. However, these statistics do not fully reflect the impact of economic runaway production on employment. They fail to account for spin-off employment that accompanies film production. It is estimated by the Commerce Department that the ripple effect of secondary and tertiary jobs associated with the industry might easily double or triple the number of jobs dependent upon the industry. Regardless of the understated nature of the economic impact, the Commerce Department acknowledges that at least $18 billion in direct and indirect export revenues and $20 billion in economic activity are generated by the industry annually. D. Loss of Pension and Health Benefits Performers and others who work on foreign productions may lose valuable pension and health benefits. As provided in the SAG collective bargaining agreements, performers are entitled to receive pension and health contributions made to the plans on behalf of performers when they work on productions. Although SAG does allow for some pension and health reciprocity with the Canadian performers union, performers must negotiate this term into their contracts. More often than not, performers are unable to negotiate this benefit for work performed in Canada. E. Cultural Identity In 1961, Congress was warned that the trend of runaway production threatened to destroy a valuable ``national asset'' in the field of worldwide mass communications. As H. O'Neil Shanks, John Lehners and Robert Gilbert of the Hollywood AFL Film Council testified in 1961, if V. Solutions A. The Film California First Program California remains a leading force in the industry, and last year took a legislative step to remedy the problem of runaway production. The state passed a three-year, $45 million program aimed at reimbursing film costs incurred on public property. The Film California First (``FCF'') program is specifically geared toward increasing the state's competitive edge in attracting and retaining film projects. To accomplish this goal, the legislation provides various subsidies to production companies for filming in California, including offering property leases at below-market rates. This legislation should serve as a model for other states, as they too struggle with an issue of increasing economic importance. B. Wage-Based Tax Credit A possible solution could be patterned after a legislative proposal offered, but never advanced, in the 106th Congress. Specifically, this proposal called for a wage-based tax credit for targeted productions and provided: (1) a general business tax credit that would be a dollar-for-dollar offset against any federal income tax liability; (2) a credit cap at twenty-five percent of the first $25,000 in wages and salaries paid to any employee whose work is in connection with a film or television program substantially produced in the United States and (3) availability of credit only to targeted film and television productions with costs of more than $500,000 and less than $10 million. C. Future Solutions To rectify the problems of runaway productions, legislation at the local, state and federal levels is paramount. Over the past thirty years, the film industry has expanded beyond California to become a major engine of economic growth in states such as New York, Texas, Florida, Illinois and North Carolina. To achieve effective legislative remedies, it is critical to examine the successful programs implemented by other nations. Maybe it is the inexorable result of a changing world. Regardless, the proliferation of foreign subsidies for U.S. film production, which is occurring at an increasing rate worldwide, raises troubling questions of fairness and equity. From a competitive standpoint, it appears as though the deck is stacked against a class of workers who seek to derive their livelihood from this industry but find their jobs have moved overseas. It is understandable that producers will take the opportunity to film abroad when the reduction in costs is as much as twenty-five percent. Consequently, the only remedy for America's workforce is to pass legislation that provides commensurate benefits in the United States. It is apparent that a laissez-faire, market-oriented approach has failed the American worker. Unemployment is extraordinarily high within the creative community, leading to seventy percent of SAG's 100,000 plus members earning less than $ 7,500 annually. This economic hardship is exacerbated by runaway production. Thus, it is abundantly clear that legislative remedies attempting to more adequately level the playing field must be pursued. Amid encouraging signs that a tax bill of significant consequence is likely to pass Congress in the coming months, it is imperative that the creative community take a proactive position to ensure that the tax bill provides incentives for domestic film production. It must use all resources to cure the concerns presented in the two reports outlined in this Article. Organizations, such as SAG, must work with Congress to develop a proposal that is acceptable in terms of cost and other political considerations. While it seems unlikely that there is the political will or desire to match the incentives offered by many of our competitors, it is conceivable to the authors that an effective approach can be designed to substantially close the gap on cost savings without eliminating them. Thus, the approach advocated involves identifying the level where cost savings of filming abroad are minimized so as not to be the determinative location factor. An appropriate level may be in the range of ten percent cost savings versus the twenty-six percent cost savings now common in some Canadian locations. It is important to note the strategy used to fashion a remedy is just as important as the relief sought. The industry should be willing to approach the tax-writing committee staff with the afore-mentioned concept and work closely with them in designing a legislative remedy. This strategy represents a holistic approach to a global problem. It is important to remember the United States risks losing its economic advantage in a vital industry which carries with it enormous economic consequences. As noted in the Department of Commerce Report: If the most rapid growth in the most dynamic area of film production is occurring outside the United States, then employment, infrastructure, and technical skills will also grow more rapidly outside the United States, and the country could lose its competitive edge in important segments of the film industry. VI. Conclusion Politics represents the art of the possible. The approach advocated in this Article should find a receptive ear in the halls of Congress if for nothing else than its simplicity. Timing is crucial. Left unchecked, the only certainty is continuing runaway production with the attendant economic costs, lost jobs, and diminished tax revenues at all levels of government. In a time of waning economic growth and warning signs of dwindling surpluses and future economic weakness, including production incentives into any upcoming tax relief is essential to preserving the U.S. workforce in the American entertainment industry.

Mr. CONYERS

Mr. CONYERS. Mr. Speaker, finally we have a reasonable approach to prohibiting human cloning without prohibiting the ability to conduct valuable medical research. Although H.R. 2505 bans reproductive cloning, it goes too far by banning necessary therapeutic research which could grant new hope to patients who have been told there is no cure for their illnesses. We all agree that reproductive cloning, cloning to produce a pregnancy, should be prohibited. But, in prohibiting reproductive cloning, we must not exclude valuable research cloning that could lead to significant medical advances. The Greenwood/Deutsch Substitute Amendment narrows the prohibition and focuses on actions which would result in a cloned child by limiting the prohibition to cloning to initiate or the intent to initiate a pregnancy. This would ensure that the cloning of humans is prohibited, while the use of cloning for medical purposes is preserved. The substitute also protects state laws on human cloning that have been enacted prior to the passage of this legislation. The Greenwood/Deutsch Substitute includes a registration provision for performing a human somatic cell nuclear transfer, so that the Secretary of Health and Human Services is able to monitor the use of the technology and enforce the prohibition against reproductive cloning. In addition, this substitute would contain a sunset provision as recommended by the National Bioethics Advisory Commission. According to their report, this provision is essential because it guarantees that Congress will return to this issue and reconsider it in light of new scientific advancements. Finally, the Greenwood/Deutsch substitute includes a study by the Institute of Medicine to review, evaluate, and assess the current state of knowledge regarding therapeutic cloning. Join me in supporting this logical approach to cloning technology. This substitute takes a narrower approach by simply prohibiting the use or attempted use of DNA transfer technology with intent to initiate a pregnancy. Adopting the Greenwood/Deutsch alternative preserves the scientific use of the embryonic stem cells and at the same time prevents the unsafe practice of human cloning.

Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would like to commend the Members for an excellent debate during the debate on the rule, as well as I hope this one will be constructive. I ask the Members, suppose you learned that you had contracted a deadly disease, Alzheimer's, multiple sclerosis, but the Congress had banned the single most promising avenue for curing the disease. And that is precisely what we will be doing if we pass the Weldon bill in its present form, because it is a sweeping bill. Let us give it credit. It is half right, it is half wrong. But it is so sweeping that it would not only ban reproductive cloning, but all uses of nuclear cell transfer for experimental purposes. This would stop ongoing studies designed to help persons suffering from a whole litany of diseases. So far-reaching is this measure that it bans the importation even of lifesaving medicine from other countries if it has had anything to do with experimental cloning. What does it mean? If another nation's scientist developed a cure for cancer, it would be illegal for persons living in this country to benefit from the drug. Question: Does this make good policy? Is this really what we want to do here this afternoon? Besides that, the legislation would totally undermine lifesaving stem cell research that so many Members in both bodies strongly support. One need not be a surgeon to understand that it is far preferable to replace diseased and cancer-ridden cells with new cells based on a patient's own DNA. We simply cannot replicate the needed cells with adult cells only, and this is why we need to keep experimenting with nuclear cell transfer. That is why I am trying to give the gentleman from Florida (Mr. Weldon), as much credit as humanly possible. It is half right, it is half wrong; and we are trying, in this debate, to make that correction. Now, if we really wanted to do something about cloning, about the problem of reproducing real people, then we invite the other side to join with us in passing the Greenwood-Deutsch substitute to criminalize reproductive cloning that will also be considered by the House today, for there is broad bipartisan support on both sides of the aisle for such a proposition, and we could come together and do something that I believe most of our citizens would like. Mr. Speaker, I reserve the balance of my time.

Mr. CONYERS. Mr. Speaker, I am pleased to yield such time as she may consume to the gentlewoman from California (Ms. Lofgren), a member of the committee. (Ms. LOFGREN asked and was given permission to revise and extend her remarks.)

Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the gentleman from Massachusetts (Mr. Delahunt), a member of the Committee on the Judiciary.

Mr. CONYERS. Mr. Speaker, I yield such time as he may consume to the gentleman from New York (Mr. Nadler), a senior member of the Committee on the Judiciary.

Mr. CONYERS. Mr. Speaker, I yield 30 seconds to the gentleman from New York (Mr. Nadler).

Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Greenwood), who had an excellent discussion during the Committee on Rules.

Mr. CONYERS. Mr. Speaker, I yield 4 minutes to the gentleman from Washington (Mr. McDermott). (Mr. McDermott asked and was given permission to revise and extend his remarks.)