[Congressional Record Volume 146, Number 132 (Thursday, October 19, 2000)]
[Extensions of Remarks]
[Pages E1840-E1841]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   DIGITAL POSTPRODUCTION TAX CREDIT

                                 ______
                                 

                           HON. JERRY WELLER

                              of illinois

                    in the house of representatives

                      Wednesday, October 18, 2000

  Mr. WELLER. Mr. Speaker, today, I am introducing legislation, along 
with my colleagues Representatives Foley, Becerra, Matsui, Ramstad, 
Rogan, Sensenbrenner, English, John Lewis, Coyne, Condit, Berman, 
Waxman, Sessions, Maloney, and Tubbs-Jones, to provide for a small 
business tax credit for digital postproduction. These small businesses 
standardize film, television, music and technology products for mass 
consumption by electronically enhancing the master copy. Postproduction 
companies need help dealing with a government mandate which, without 
our assistance, may put many of these small, technology related 
businesses out of business.
  On December 24, 1996, the FCC mandated a new terrestrial Digital 
Television standard, replacing the one that existed for 50 years. While 
adopting an Advanced Television Systems Committee (ATSC) standard, the 
FCC did not designate a single transmission format.

[[Page E1841]]

As a result, the postproduction industry has already invested in 
millions of dollars worth of equipment to be used in creating High 
Definition (HD) Broadcasting. Without HD broadcasting, the U.S. will be 
surrendering the advanced research and technological position which has 
sustained the preeminence of the American entertainment and information 
industry.
  The FCC specifically chose not to mandate a single digital display 
format. I agree that diversity in formats is a logical way to proceed 
by allowing the marketplace to decide on the best format(s). However, 
for the postproduction process the complexities created by the 
requirement to support these new standards has exponentially increased 
the cost and complexity of their transition to digital television in 
the short run.
  The legislation will help to keep the domestic digital postproduction 
industry strong. The proposed tax credit would provide for a 20 percent 
credit for current capital expenses incurred for digital postproduction 
machinery and equipment less a floor equal to their average annual 
gross receipts from digital postproduction services for the prior four 
years. The taxpayer would reduce the depreciable basis of the equipment 
by the credit claimed. Additionally, the credit would sunset at the 
effective date of the FCC mandate.
  Mr. Speaker, I ask my colleagues to join me in cosponsoring this 
important legislation.

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