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Production and post production organizations in Georgia and across the nation are being called upon to join a grassroots movement in support of state and U.S. legislation to help ease the financial burden accompanying the equipment upgrade to DTV and HDTV (high definition television).
Two bills are under consideration. In Georgia, House Bill 995, sponsored by the Georgia Association of Broadcasters (GAB), provides sales & use tax exemptions to television and cable stations for purchases of digital broadcast equipment. In the U.S. legislature, a proposed Post Production Research & Development Credit would offer a tax rebate to companies that provide digital post production services.
“Both proposals would benefit the production and post production industry in Georgia, but if either is going to succeed, they need the support of professionals throughout the industry,” says Kevin Garguilo, President of the Atlanta chapter of Association of Imaging Technology & Sound (ITS). To this end, Garguilo and ITS are encouraging all local trade organizations and unions to back this effort — SAG & AFTRA actors unions, Women In Film, Association of Independent Commercial Producers (AICP), Georgia Production Partnership (GPP), International Television Association (ITVA), Society of Motion Picture & Television Engineers (SMPTE), GAB, as well as production and post production companies and freelance talent throughout the state.
“Eighteen states have already passed favorable tax legislation for the purchase of machinery, equipment, and services in motion picture or video production and post production,” said Garguilo. “The need to re-tool for digital production and post presents a critical juncture for these companies because most are privately held small businesses facing expenditures in the millions of dollars. The major broadcast networks have committed to at least three digital formats, so the facilities must support all of these to provide programming and commercials for air. Other states and other countries are providing tax breaks for this industry which nationally employs around 38,000 highly-skilled employees with a payroll of about $1.8 billion, powering an industry of about $4 billion in annual domestic revenue.”
“The initial cost of converting to total digital and eventually high definition equipment will be enormous…” James Deatherage, Operations Manager, VTA.
Georgia’s ITS board felt strongly enough about industry participation in this movement that they devoted September’s meeting to the subject. Held at iXL’s studios, the meeting gave members and guests the opportunity to hear about efforts and results in other cities.
National ITS President, Terry Rainey, discussed the legislation that has already passed in other states, including California, New York, and Virginia, as well as that which is currently before various legislative bodies, particularly the Post Production Research & Development Credit. Proposed by ITS National and sponsored by Rep. Jerry Weller (R-Ill.), Rep. Mark Foley (R-Fla.), Rep. Xavier Becerra (D-Calif.), and Robert Matsui (D-Calif.), it currently has the bi-partisan sponsorship of 15 representatives, including Georgia Congressman John Lewis (D) and representatives from Minnesota, Pennsylvania, New York, Texas, Wisconsin, and Ohio.
“The initial cost of converting to total digital and eventually high definition equipment will be enormous,” said James Deatherage, Operations Manager of Atlanta post facility VTA and a member of ITS who attended the September meeting. “Most of us in large centers like Atlanta have begun the process of converting to digital and high definition, but others, particularly in smaller cities, have not. And while the initial outlay for digital equipment is extremely expensive, the facility’s annual income is not expected to significantly increase. This bill would give us a way to ease some of that burden.”
Reiterating this sentiment, Paul Hansil, Chief Operating Officer of Crawford commented at the meeting that Crawford had already spent over $4 million getting ready for high definition television.
“The bill will most likely be packaged with other tax credits,” said Rainey during the ITS Annual Forum in July, and he was not overly optimistic concerning its chances for passage, given President Clinton’s recent trend toward vetoing all tax cuts. But Rainey emphasized that while this particular credit would not have a major impact on the nation’s overall economy, it would mean a great deal to the video industry. Although realistically cautious about the bill’s chances this year, he was more optimistic about its passage next year if it gets the required industry-wide support.
As of this writing, Rep. Weller is scheduled to present the tax credit proposal by October 11, supported by a growing number of co-sponsors of the bill. Congress is scheduled to adjourn in mid-October. Tracy Murley, Government Affairs Manager of the National ITS office, says she, too, is optimistic but realistic about its chances of passing this year. “If it does not pass or if it is tabled for next year, at least we have begun building a strong base of support, and it can be re-introduced next year,” said Ms. Murley. “We’ve gotten positive feedback from members of Congress and our ITS members, so we’re hoping for the best.”
In the meantime, she stressed, all interested parties, not just ITS members, should access the ITS web site at www.itsnet.org where there is information on the bill, as well as a template for writing letters to individual representatives and a page of talking points to help outline the industry’s position when speaking with local Congressional members.
Another guest at the ITS meeting was Rob Maynard of WGST-TV and a board member of the GAB. Maynard addressed the FCC mandate to television and radio stations to begin broadcasting digitally in the next five years and how House Bill 995 would make digital equipment purchases tax-exempt for radio and television stations. He said the bill is designed to assist stations in rural Georgia re-tool for digital broadcast, but he entertained the idea that post facilities could be included in that exemption.
House Bill 995, introduced to the Georgia legislature in early 2000 by Rep. Mary Jeanette Jamieson (D-Toccoa), proposed sales tax exemption on digital broadcast equipment purchased by “federally licensed commercial or public radio or television broadcast stations...to originate and broadcast or to receive and broadcast digital signals.” The bill, however, died in committee, despite GAB’s many bulletins to member broadcasters, calling on them to contact their legislators and ask for the order. GAB President, Bill Sanders, estimates only 10 heeded the call for action.
Despite the poor response, Rep. Jamieson plans to re-introduce the bill in the next session, and Garguilo advised industry members to contact the GAB as well as their district representatives in support of this bill. “Even if we can’t get production and post production companies added to this bill, it will pave the way for future legislation benefiting this industry,” he said.
While Governor Roy Barnes had indicated he would sign the original bill if it passed the House, the success of a revised bill might depend on what effect these credits would have on the state’s budget. In response, the GAB has requested that production and post facilities in the state provide the GAB with financial data specifying projections on revenue growth and the projected dollars allocated to digital television equipment. With this information, said Maynard, the GAB can build leverage in the legislature.
The groundswell has begun, but if this grassroots movement is going to grow and successfully attain its goal, said Garguilo, it has to become a mission of every member of the production and post production industry. To this end, ITS will be holding meetings, speaking to members of other organizations, and encouraging everyone to contact their legislative representatives in support of both these bills before sessions reconvene in January.
The GAB web site, www.gab.org, provides easy access to the e-mail addressees, phone numbers and addresses of Georgia’s national legislators. Information on U.S. Senators is available at www.congress.org; U.S. Representatives at www.house.gov/writerep. State legislators can be found at www2.state.ga.us/legis. The ITS web site, www.itsnet.org has sample letters, instructions, and links to legislative addresses. The e-mail address for the Atlanta chapter is itsmembership@mindspring.com.