Nearing adjournment at press time, the latest session of Congress produced some tangibly positive legislative results for the commercial production and post communities. As expected (SHOOT, 10/13, p. 1), President Clinton signed a bill into law that raised the annual allotment of H-1B visas to 195,000 for each of the next three years. The measure was supported by U.S. high-tech firms—including many visual effects and computer animation studios—that depend on recruiting foreign talent to help offset what they contend is a shortage of qualified American workers.
While the 70 percent increase in the H-1B quota buys some time until more homegrown talent is developed stateside, the legislation also hopes to offer a partial long-term remedy by launching a program to train U.S. workers for high-tech jobs. Both supporters and opponents of the larger visa allocation seem to agree that the big-picture solution is to commit more resources to the U.S. educational system—particularly in math, science and the arts—so that it can turn out more skilled workers necessary for the new-millennium job market.
Shortly after the visa bill gained Clinton’s signature, another key piece of proposed legislation—HR 5497—made some headway in the U.S. House of Representatives. Rep. Jerry Weller (R-Ill.) introduced the bill in the House on Oct. 18. If passed, HR 5497 would establish an investment tax credit for postproduction facilities. The tax credit would help make the Federal Communications Commission (FCC)-mandated transition to DTV, including HDTV, more economically feasible for the post community.
The Association of Imaging Technology and Sound (ITS) has played an integral role in mustering support for the bill on Capitol Hill, employing a grass-roots campaign to secure a series of co-sponsors (SHOOT, 9/15, p. 1), the latest being Rep. Henry Waxman (D-Calif.). Waxman brings the tally of HR 5497 co-sponsors in the House of Representatives to 16. The others are a core of four primary co-sponsors, consisting of Weller, Rep. Xavier Becerra (D-Calif.), Rep. Mark Foley (R-Fla.) and Rep. Robert Matsui (D-Calif.); and Reps. Howard Berman (D-Calif.), Gary Condit (D-Calif.), William J. Coyne (D-Penn.), Phil English (R-Penn.), Stephanie Tubbs Jones (D-Ohio), John Lewis (D-Ga.), Carolyn B. Maloney (D-N.Y.), Jim Ramstad (R-Minn.), James Rogan (R-Calif.), James Sensenbrenner (R-Wisc.) and Pete Sessions (R-Texas).
Though ITS government affairs manager Tracy Murley characterized the bill’s chances of passing the about-to-conclude congressional session as being "a long shot" given its 11th-hour introduction in the House, she and ITS president Terry Rainey are optimistic over the latest developments. Even if HR 5497 fails to gain passage this time around, or ultimately is vetoed, the work done thus far lays a strong foundation for the reintroduction of a progressive tax credit proposal in the next session of Congress, with improved prospects for passage. Additionally, legislators could consider other means to ease the financial burden of the DTV transition. These include a change in equipment depreciation schedules, and a loan program that could involve the Small Business Administration.
As currently worded, the proposed R&D investment tax credit would be computed at 20 percent of a domestic post company’s current capital expenses incurred for digital post machinery and equipment—less a dollar amount equal to the facility’s average annual gross receipts during the prior four years. The intent is to encourage the domestic construction of an advanced digital post infrastructure when the current demand for such services may not justify the required expense. The measure is structured to effectively increase the threshold for tax credit qualification as the revenue generated by digital TV post services grows. Digital postproduction equipment would be defined in the context of the Advanced Television Systems Committee standards, which have been adopted by the FCC for digital TV. Among those qualifying for the proposed tax credit would be digital video and audio post facilities, animation houses and post equipment rental companies.
PUBLIC LANDS
The tax credit proposal and the H-1B measure continue a congressional year that has proven fruitful for the industry. Back in June, a bill governing filming on federally owned lands—including those under the jurisdiction of the National Park Service (NPS) and the National Wildlife Refuge System—was signed into law by President Clinton. At press time, agencies under the U.S. Department of the Interior, like the NPS, were in the process of finalizing regulations reflecting their interpretation of how the legislation should best be implemented.
The public lands filming law is supported by the Association of Independent Commercial Producers, the Association of Film Commissioners International and other industry organizations. The legislation carries provisions that the spotmaking community embraces. For example, the measure bases "reasonable" filming fees for federal public lands—such as national parks—on crew size and length of stay on location. Both of these barometers are favorable to commercials, which are usually smaller-scale productions and have shorter lensing periods as compared to their TV program and theatrical feature counterparts. The legislation also calls for timely processing of film permits. The timetable for processing would be tied to the length of projected filming. For filming permits of shorter duration—typical with commercials—the turnaround for processing would be shorter than would a request to shoot for an extended period of time, which is the norm for theatrical movies and telefilms.
Another provision in the law establishes an 80-20 split of film fee revenue, with the 80 percent going to the local public land facility where lensing takes place, and the remaining 20 percent set aside for system-wide federal land needs. Some segments of the industry reason that this revenue distribution policy may serve as additional incentive for local public land managers to facilitate production. The locally retained revenue could be put towards the hiring of liaisons to handle and expedite reasonable filming requests. Currently, many public land managers have assorted responsibilities, making it difficult for them to divert time to facilitating quick turnaround for the issuance of film permits.
Enabling producers to access public lands for filming in a more timely manner is a significant legislative step to combat runaway production to foreign countries. Looking to the 2001 session of Congress, segments of the industry are hopeful that other anti-runaway measures will be developed and considered, particularly in light of spot production’s flight to Canada, as well as overseas, during the recently settled actors’ strike (SHOOT, 10/27, p. 1). Individual states are contemplating anti-runaway proposals, encouraged by such recently enacted initiatives as the Film California First program, which will reimburse certain film-related state and federal agency costs to production companies shooting on public, government-controlled land (SHOOT, 10/6, p. 1). The State of California has budgeted $15 million for each of the next three fiscal years (a total of $45 million) to fund the Film California First program.
