The Association of Imaging Technology and Sound (ITS) enlisted the support and suggestions of key lawmakers during its Legislative Action Day last week (10/21) on Capitol Hill in Washington, D.C. A delegation of 15 ITS representatives—headed by ITS president Terry Rainey and chairman David Case (president of Pittsburgh facility Production Masters Inc.)—split into three groups and met with some two dozen legislators in both houses of Congress.
A prime topic was the costly transition to DTV (including HDTV), mandated by the Federal Communications Commission. The ITS stated its case to legislators, asking them to help make that transition less economically traumatic for the post community. Each lawmaker was presented with an ITS white paper which outlined the postproduction/effects industry and documented the fact that most post/effects facilities, editing
and audio houses are smaller to mid-sized entrepreneurial ventures. These companies will play integral roles in DTV, hi-def and other emerging digital media and technologies—business sectors that figure to be an important part of the global economy in the new millennium.
Long topping the ITS wish list have been investment tax credits for facilities as they re-tool themselves for DTV. The ITS contingent received encouragement on that front—as well as a reality-check from legislators. Case noted that Congressmen Jerry Weller (R-Ill.) and Mark Foley (R-Fla.) expressed willingness to sponsor an investment tax credit bill, which the ITS currrently has in draft form. As earlier reported (SHOOT, 9/17/99, p. 1), Weller and Foley are both members of the House of Representatives’ Entertainment Industry Task Force Committee and have been vocal advocates of legislation that would help the U.S. stem the tide of runaway production. They’re particularly interested in making the American production and post industries more competitive in the global marketplace.
At the same time, other legislators observed that getting investment tax credits passed by both houses would be a long shot in the current Congress. An alternative proposal—which might have a stronger likelihood of passage—would be to accelerate or shorten the depreciation schedule, whereby equipment purchases are amortized. Such an adjustment would help facilities ease their financial burdens by reflecting the higher rate of turnover in equipment today, Rainey explained. Gaining a change in depreciation schedules would require an amendment to the U.S. tax code.
Another possible form of relief could come from the federal government’s Small Business Administration (SBA). In that this is a new DTV and hi-def era, pointed out Case, "there are no financial models to demonstrate that our pro formas would go exactly according to plan." Case said that SBA involvement in financing could not only help in and of itself, but would probably also ease trepidation on the part of banks to underwrite DTV and HDTV equipment purchases. According to Rainey, Congressman Danny Davis (D-Ill.), a member of the SBA committee, has offered to help champion the ITS cause.
Rainey added that the Legislative Action Day also entailed the ITS contingent receiving input from legislators as to what the industry needs to do in order to bring about desired reform. He said that several lawmakers suggested that the ITS develop an economic model which would show what it would cost the "average" facility to diversify into HDTV. That model was deemed by several in Congress to be important in stating an articulate case for legislative or regulatory action.
Case was pleased with the receptiveness and responsiveness of congressional members. He said that ITS representatives had face-to-face meetings with 20 lawmakers as well as top aides for four other legislators. "Going in, we were told to expect short meetings of about ten to fifteen minutes," related Case. "Instead, most of our meetings lasted a half hour. It was fulfilling to see that there is considerable interest in our industry on the part of legislators."
Much of that interest has been generated in recent months by the runaway production issue. The aforementioned House Entertainment Industry Task Force has four field hearings on runaway production tentatively scheduled for next year, the first slated for January in Los Angeles. Lawmakers have asked that the ITS have a representative testify at each of those hearings.
As earlier reported (SHOOT, 9/3/99, p. 1), the ITS formed a coalition with Film US, an organization of nearly 200 film commissioners, to help keep production and postproduction work in the U.S. Both groups committed to combine resources and pursue action to help combat runaway production. Case reported that Film US chair Dawn Keezer said the organization would lend its support to the proposed ITS investment tax credit bill. Keezer is director of the Pittsburgh Film Office.
Last week’s Legislative Action Day was the second staged by the ITS. The first, which took place in ’97, was quite different in that it didn’t entail meetings with legislators. Instead, that inaugural session featured guest speakers (i.e. an attorney, a legislative consultant, a congressional communications director) who helped educate an ITS contingent on the inner workings of Washington, D.C., and on how to forge relationships with lawmakers. The ITS did not hold a Legislative Action Day in ’98, opting to put most of its energies and resources into the successful California effort to gain a state sales tax exemption on new equipment purchases made by independent post and visual effects facilities (SHOOT, 1/29/99, p. 1).
ITS decided to take this year’s Legislative Action Day to the next level, initiating direct contact with lawmakers. In preparation for this push, the ITS entered into a long-term relationship with a D.C.-based lobbying firm, The Advocacy Group (SHOOT, 8/6/99, p. 1).
"We feel we took a positive first step last week at our Legislative Action Day," assessed Rainey. "We opened up some doors and raised awareness of our industry with lawmakers. But there’s more real work to be done. And we need to follow up and continue to bring our message to Capitol Hill. That’s a focus of our organization."
