On, October 3, 2008, Congress approved “Section 181” a key reform of legislation to prevent runaway production. The legislation to modify and extend the federal tax incentive for domestic film production, was approved by Senate on October 1 and the House of Representatives on October 3 as part of the $700 billion rescue plan for the U.S. economy.
Upon learning of the passage of legislation, DGA President Michael Apted issued the following statement:
Given the very tough economic climate affecting every sector of this economy, we are extremely grateful that this legislation will help save so many jobs that would have otherwise been sent abroad as a result of runaway production,” Apted said. “After many, many long months of waiting, the ground-breaking legislation that was first enacted in The American Jobs Creation Act of 2004 will finally fulfill its potential by creating a small but significant benefit for film and television productions that choose to remain in the United States rather than going abroad. We thank our bipartisan supporters in Congress for making this a reality.”
Section 181, which had previously been approved by both the House and the Senate as part of a much larger bill to extend certain expiring tax provisions but was ultimately attached to the $700 billion financial markets rescue plan, achieves three important goals:
- First, it expands the program by applying the tax incentive to the first $15 million of all films and television productions in the United States. The previous law applied the tax incentive only to productions whose total costs, including hard-to-predict future expenses for residuals and participations, fell below a $15 million cap. This restriction limited the films that could benefit and made the program more difficult to use.
- Second, the provision extends the tax incentive through December 2009. The incentive had been scheduled to expire at the end of this year.
- Third, the provision is retroactive to January 2008, allowing many productions to take advantage of the tax incentive that had not previously been eligible under the $15 million cap.
The DGA has worked with a coalition of film industry organizations for nearly ten years to stem the tide of runaway production. The current effort focused on amending Section 181 to make the United States a competitive place for film and television production. Combined with the incentives that many states have enacted, the federal incentive will serve as an effective tool to keep more television and film production in the United States. Immediately after its passage on Friday, October 3, 2008, President George W. Bush signed the new legislation into law.
The DGA would like to thank the following legislators for their bipartisan support for reducing runaway production:
- Senator Max Baucus (D-MT)
- Congressman Xavier Becerra (D-CA)
- Congressman Howard Berman (D-CA)
- Senator Jeff Bingaman (D-NM)
- Congresswoman Mary Bono-Mack (R-CA)
- Senator Richard Durbin (D-IL)
- Senator Orrin Hatch (R-UT)
- Senator Blanche Lincoln (D-AR)
- Congressman Jim McCrery (R-LA)
- Congressman Richard Neal (D-MA)
- Congressman Charles Rangel (D-NY)
- Senator Gordon Smith (R-OR)
- Senator Olympia Snowe (R-ME)
Runaway Production Alliance Members:
- Academy of Television Arts and Sciences
- American Federation of Musicians
- American Federation of Television and Radio Artists
- Association of Independent Commercial Producers
- Association of Talent Agents
- The Caucus for Television Producers, Writers and Directors
- Directors Guild of America
- Film Musicians Secondary Markets Fund
- Hollywood Post Alliance
- International Alliance of Theatrical Stage Employees
- Producers Guild of America
- Independent Film and Television Alliance
- International Brotherhood of Teamsters, Local 399
- Recording Musicians Association
- Screen Actors Guild
- US Film Commission Caucus, Association of Film Commissioners International
