The DGA and the Runaway Production Industry Alliance have been successful in getting a specific runaway production proposal (an accelerated write off of all production costs) included in the Senate FSC/ETI bill, S. 1637, the "Jumpstart Our Business Strength Act" (JOBS Act) sponsored by Senate Finance Chairman Chuck Grassley (R-IA) and Finance Ranking Member Max Baucus (D-MT). This bill passed out of the Senate Finance Committee by a vote of 19-2 on October 1, 2003.
S. 1637 is a bi-partisan bill that is revenue neutral, meaning that, on balance, over a ten-year period, the bill does not cost the U.S. Treasury any money. Senate Majority Leader Frist (R-TN), as well as Senators Grassley and Baucus, have indicated that they would like to take up the JOBS Act on the floor as early as the first week of March. However, as of yet, there is not final agreement on timing nor on the rules of the debate under which this bill will be considered. DGA is reaching out to our Senate supporters and working to attract new Senate support as the bill moves forward.
The companion House bill, H.R. 2896, the "American Jobs Creation Act of 2003", passed the House Ways and Means Committee on October 28 by a party line vote of 24-15. Ways and Means Chairman Bill Thomas (R-CA), the author of this bill, included few provisions ( our runaway proposal was not among them) that were in the Senate bill, since those provisions will be debated in the House-Senate Conference Committee where negotiations on the final bill take place. However, during committee markup Congressman Jim McCrery (R-LA) added another anti-runaway production provision to the House bill. His amendment provides that to qualify for a reduced tax rate on foreign royalty income, "50% or more of the total compensation related to the production of a film must constitute compensation for services performed in the United States by actors, production personnel, directors, and producers."
H.R. 2896 is not scheduled for a House floor vote yet. This bill is not revenue neutral – over a ten-year period, it carries a $60 billion price tag. With increasing Congressional concern over the rising federal budget deficit, there currently does not appear to be enough support to pass H.R. 2896 on the House floor. Chairman Thomas has indicated the bill may still be modified before coming to the floor in order to secure more support. Although the DGA's lobbyists have been working to help get the bill to the floor, it remains unclear whether this will happen before April 2004.
With Congress now back in session, DGA has renewed efforts with our supporters in both the House and the Senate to ensure that our provision remains intact both on the floors and especially in the joint House/Senate Conference.
There are growing state efforts to create incentives. Recently Governor Rod R. Blagojevich of Illinois announced that production has increased 100% since passage of their wage credit. At least two major motion pictures are headed there as well as other productions. More and more states are pushing various incentive legislation forward. In 2004 we hope to be of help in Pennsylvania, Georgia, Utah, Tennessee, Mississippi and Vermont where legislative efforts of varying kinds are underway.
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