For the past two years, in many DGA Council and Board meetings, various approaches to combating runaway production have been discussed, and a federal legislative approach has always been endorsed.

The DGA's lobbyists, professionals and staff, along with congressional supporters, did a thorough analysis of various federal remedies and came to the conclusion that the most viable approach was to seek some form of federal wage-tax credit. Additionally, the Guild, and the Alliance of organizations representing a full cross section of the entertainment industry, small businesses, film commissions, labor organizations and mayors to which we belong, has been told repeatedly by members of Congress that we needed to provide them with "one approach" and a unified voice.

Since the last runaway production update in DGA Magazine, backing for federal wage tax legislation (Senate Bill 1278 and House Bill 3131) has continued to grow. The Guild and the Alliance know that getting any federal legislation passed will be a long fight, fraught with difficulties; however, SB 1278 now has 17 co-sponsors, and HR 3131 has 28, with both bills gaining bipartisan support every week.

On December 4, 2001, a "Countervailing Tariff Petition" was filed with the U.S. Department of Commerce (DOC) by the Film and Television Action Committee (FTAC), the Screen Actors Guild (SAG) and the Made in the USA Foundation. The stated purpose of the countervailing tariff petition is to raise tariffs on the import into the United States of films and TV programs made in Canada. The petition also asks for an investigation into whether countervailing tariffs are needed against Canada to keep the U.S. film industry competitive. As part of this investigation, the petitioners have asked the DOC to look into whether the Canadian wage-tax credits given to film productions are legal under various treaties.

The DGA and other members of the Alliance including IATSE, AFMA, AFTRA, Film U.S., the Producers Guild and organizations representing post-production and equipment rental houses, along with the MPAA and the individual studios, have for the following reasons officially submitted to the DOC their opposition to the tariff petition:

• The U.S. film industry earns more than 40% of its revenues by exporting its products to foreign markets. The U.S. entertainment industry's domination of foreign markets helps generate the revenues that producers need to invest in new productions.
  
  
• Raising tariffs against foreign films is shortsighted and invites retaliation by our trade partners, whose markets are truly dominated by U.S. film and television products. In the long term, a U.S. trade policy that raises tariffs on films and TV programming made in Canada or other countries will only invite a vicious spiral of escalating trade barriers. Such a policy will cost many more jobs than it will save, and will ultimately be self-defeating and harmful to DGA members' economic interests.
  
  
• Finally, despite the claims of some petitioners that putting the petition forward somehow helps the Alliance's efforts to seek support for a legislative approach, in truth, the countervailing tariff approach is wholly incompatible with federal wage-based tax credits. If Canadian wage-tax credits were found to be an illegal trade subsidy, then U.S. wage-tax credits would also be illegal. The reverse is also true: if U.S. wage-tax credits do not violate trade rules, then similar Canadian wage-tax credits are also not in violation of trade rules.
  

We will continue to keep you updated as events unfold.

Reception for Senator Blanche Lambert Lincoln - DGA Magazine November 2001
Runaway Production Bill introduced in U.S. House of Representatives - DGA Magazine November 2001
Links to Anti Runaway Production Legislation Supporters in the Senate and House - November 1, 2001
U.S. Representatives Mary Bono, Xavier Becerra and Robert Matsui say H.R. 3131 will strengthen U.S. Economy by keeping film production local - November 1, 2001
Runaway Production Bill introduced in U.S. House of Representatives (H.R. 3131 - October 16, 2001
H.R. 3131 Fact Sheet - October 16, 2001
Alliance Statements of Support for H.R. 3131 - October 16, 2001
Photo Gallery from DGA PAC Reception for Senator Blanche Lambert Lincoln (D-AR) - October 14, 2001

Industry Alliance Announces Support for New Senate Bill Aimed at Problem of Runaway Film and Television Production - July 31, 2001

The United States Independent Film and Television Production Incentive Act of 2001 (USIFTPA) Fact Sheet- July 31, 2001

Alliance Statements of Support for USIFTPA - July 31, 2001

Senate Statements of Support for USIFTPA - August 6, 2001

Other Statements of Support for USIFTPA - August 6, 2001

The Dangers of Runaway Production - July 31, 2001

Industry Specific Tax Incentives - July 31, 2001

Industry Letter of Support for Wage Credit Legislation

Department of Commerce Press Release On the Impact of the Migration of U.S. Film and Television Production

Bipartisan Statements on Department of Commerce Runaway Production Report

Congressional record: Independent Films and Television Programming

DGA/SAG Commissioned Study Shows Total Economic Impact Of U.S. Economic Runaway Production Reached $10.3 Billion In 1998
For a complete Acrobat PDF copy of the Monitor report, click here.

We also recommend that you visit the Department of Commerce's International Trade Administration site and download the report titled The Migration of U.S. Film and Television Production Impact of "Runaways" on Workers and Small Business in the U.S. Film Industry.