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In a political climate where tireless work doesn't always guarantee results, the signing of The American Jobs Creation Act into law represents a celebrated victory for the DGA – proof that a reasoned, strategic and savvy approach to a problem can, in fact, lead to major inroads.
We have approached the issue of runaway production as part of a broadly based Alliance that is active at the federal, multi-state and local level; it includes other Guilds and unions, independent and commercial producers, post-production and equipment rental associations, talent agencies, and all the state and local Film Commissioners.
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For many years, runaway production was widely perceived as a problem, but our explanation of it was merely anecdotal – and you can't get legislation passed based on anecdotes. So in 1999, the DGA along with SAG took an important step by contracting the Monitor Company to research the impact of runaway production on the U.S. economy. The results of this report confirmed what we believed; they showed that the total economic impact as a result of runaway film and television production was $10.3 billion – almost six times greater than it was in 1990. With facts in hand, the DGA began what would become its most important legislative fight for the next five years.
In the fall of 2000, knowing that follow-up research done outside the industry would help our case, the DGA hosted a meeting with then Vice President Al Gore and key Alliance members. As a result of that meeting, Vice President Gore commissioned an independent study done by the Department of Commerce; it was released in 2001 by the Bush administration and it confirmed the findings of our original Monitor Report.
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Step Two:
The Role of Political Action
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In the late '90s, the DGA created a Political Action Committee (PAC) for the express purpose of strengthening our collective voice in Washington. Then DGA President Jack Shea, understanding the need to intensify our educational efforts with lawmakers, created the PAC Leadership Council in 2001. His action was supported by DGA President Martha Coolidge during her tenure as president. Co-chaired by Taylor Hackford and Paris Barclay and comprised of some of the DGA's most prominent directors and AD/UPM members, the Leadership Council has focused on one mission since its inception: to promote the DGA's legislative agenda, with the number one priority being the passage of runaway production legislation.
DGA President Michael Apted, National Executive Director Jay D. Roth, Assistant Executive Director/Government and International Affairs Kathy Garmezy and Western Executive Director G. Bryan Unger, dedicated countless hours to strengthening our voice in Washington through face-to-face meetings with key Congressional leaders.
Our strategy was to educate elected officials about the real face of our industry, and to help make our case in the nation's capital, we hired the lobbying firm Washington Council Ernst & Young. Our efforts there were managed by Bobby Rozen, John Porter, Gary Gasper and Francis Grab, all with extensive experience dealing with Congress and the executive branch. Together we worked hard to dispel the image of red carpets and box-office grosses and to underscore that ours is an industry of working men and women and small businesses housed not just in Hollywood and New York, but throughout the United States.
As part of our educational efforts, we published and disseminated both the Monitor Report and the DOC study to members of Congress, the press, our industry and a wide number of elected officials. Current DGA President Michael Apted spoke out extensively on the issue at every opportunity, and the Leadership Council held countless meetings with members of Congress at the Guild, on a totally bipartisan scale. All this in an attempt to shine a light on the problem – and to give Washington a more accurate idea of who we are and what we do.
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Step Three:
The Importance of Sponsorship
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After researching the problem and meeting with elected officials, the next — and arguably most important — step for us was to find those legislators who believed in our efforts enough to serve as our "champions" in Washington. The DGA did just that, finding in Senators Blanche Lambert Lincoln (D-AR) and Olympia Snowe (R-ME) on the Senate side, and Representatives Howard Berman (D-CA) and David Dreier (R-CA) on the House side, a bipartisan group of lawmakers who believed our efforts enough to champion legislation. The diversity of these four members of Congress—coming from different parts of the country and different parts of the political spectrum—was crucial to the success of our efforts. And as a result of their unwavering and bipartisan support, wage-credit based runaway production legislation was introduced in the 107th Congress and again in the 108th Congress. The bills garnered broad bipartisan support from 78 House members and 27 Senators across the country who recognized the impact of runaway production on their own communities. But at the time, there wasn't appropriate tax related legislation to which our bill could be attached.
Last year, the Senate and the House began work on legislation that presented the best opportunity we had to get runaway addressed and attached to a bill. That was the Jumpstart Our Business Strength Act, introduced by Senators Grassley (R-IA) and Baucus (D-MT). The JOBS Act replaced existing export subsidy rules with a favorable tax rate deduction for US manufacturers — which included film and television productions.
The DGA, working with our Senate co-sponsors Senators Lincoln (D-AR) and Snowe (R-ME), along with Senate Finance Committee Chairman Grassley and Ranking Member Baucus, worked out an alternative approach to deal with the runaway problem: an immediate write-off of all production costs for projects less than $15 million and a three-year write off for projects in excess of $15 million. We worked with IFTA (Independent Film & Television Alliance, formerly American Film Marketing Association) and their board leadership to craft this alternative approach, knowing it would be more acceptable to all members of the Senate Finance Committee and could be a viable incentive for producers.
In October 2003, the Senate Finance Committee included our runaway production proposal in the bill approved out of Committee. The legislation then passed on the Senate Floor. While Speaker Dennis Hastert (R-IL) and Congressman David Dreier (R-CA) worked with the Ways and Means Committee to include our proposal in the House bill, Chairman Thomas chose not to include items already in the bill passed by the Senate. However, sponsors such as Congressmen Howard Berman (D-CA), Charles Rangel (D-NY), Jerry Weller (R-IL), Mark Foley (R-FL) and Congresswoman Mary Bono (R-CA) all played key roles on our behalf as the bill moved to Conference. Congressman Jim McCrery (R-LA) also played an instrumental role, along with our Senate supporters, during the Conference.
Early in October 2004, in the House-Senate Conference Committee, where negotiations on a final bill took place, 400 amendments were rejected but our provision beat the odds and made it in. In mid-October of this year, the American Jobs Creation Act of 2004 passed both houses of Congress, and on October 22, President Bush signed it into law.
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Listed below are some of the legislators the DGA met with: many of these members of congress became instrumental in the passage of this bill:
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A Special Thank You To These Legislators Who Were Instrumental
In the Passage of The American Jobs Creation Act:
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