AFM: Judy Chu to Push to Make Section 181 Permanent

Stand Honda/ AFP

In a meet and greet with industry execs at AFM, the California Congresswoman warned that Republicans will try to cut the federal income tax break for films, which expires Dec. 31.

Congresswoman Judy Chu (D-Calif.) was in fighting spirit when she stopped by the American Film Market this weekend, talking to industry execs and pledging to do battle on two key fronts: to make Section 181 permanent and to combat “horrible” piracy.

PHOTOS: 20 Biggest Political Players in Hollywood

Section 181, the federal tax credit that allows investment in a motion picture shot in the U.S. to be 100 percent tax deductible on the same year invested, is a key component of any American indie film budget. But the tax break expires on Dec. 31 and, given the House Republicans attitude towards government spending, Chu said Section 181 could be at risk of being chopped in the heated budget battles to come.

“There are some [in Washington] who are kind of extreme when it comes to cutting the federal budget, as you may have noticed recently,” she told The Hollywood Reporter, making reference to the recent government shutdown and near national debt default that resulted from Republicans and Democrats being unable to reach a deal. “There are some who would like to shrink government drastically and even this critical piece of help is put into question. So we want to make sure they see the value of the film industry for this country and that this particular tax credit gets renewed and made permanent.”

PHOTOS: Top 10: Indies at the Box Office

On copyright infringement, Chu expressed hopes that Google, which has been criticized as being a gateway to piracy, would change its tune as it begins to invest more in content production, a recurring theme at this year's AFM. But she said there were no plans to revive the Stop Online Piracy Act, or SOPA, which Google and others helped defeat. Instead, she took a more conciliatory tone, suggesting copyright holders and open web advocates could find a middle ground.

“I think we shouldn't be so polarized on this issue. There is a way to protect copyright in a better way. Even the simple way of alerting people who are going onto pirate sites that they are doing something illegal. That does a lot to change behavior. And that doesn't necessarily have to be punitive. But we don't have that going on right now.”