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New Congress, Legislature raise stakes for broadcasters

 - Performance Tax advocate takes reins of key DC committee

While the big story at the state level this week is, rightly, the convening of a new Texas Legislature, TAB is eyeing the new power structure in Congress warily as tax reform endangers the full deductibility of advertising costs and a staunch proponent of a Performance Tax on Radio stations assumes leadership of the House subcommittee that oversees the broadcast industry.

State lawmakers this week began organizing for their 140-day session with more than 1,400 bills already filed, including two measures TAB is advancing to undo recent Texas Supreme Court rulings that have shut off access to how tax dollars are being spent.

TAB will undertake additional Open Government efforts important to newsrooms in the coming weeks while also protecting hard-fought wins on state sales tax issues and tort reform. Examples of the latter range from the Anti-SLAPP and defamation mitigation laws to the law protecting reporters’ confidential sources.

These efforts will be the focus of TAB’s 2017 Legislative Day conference in Austin on Jan. 24 from 10 a.m. to 2 p.m. A morning of major policy briefings will be followed by lunch where broadcasters are seated with their lawmakers. REGISTER

DC Concerns

Tax reform, the TV spectrum repack and the RIAA’s continuing fight for a Performance Tax dominate broadcasters’ DC agenda, though other threats may emerge in this season of breaking with convention.

The long running effort to reform the federal tax code is expected to take flight this spring as House Republicans “go bold” on behalf of business interests, to paraphrase Rep. Kevin Brady, R-The Woodlands, who as chair of the tax-writing committee is leading the effort.

“We vault America back into the world lead by moving from the current income tax based on where companies produce to a simpler cash-flow tax based on where company products are consumed,” Brady said in a recent press release.

“We are also proposing the lowest tax rates on local businesses in modern history, permanent repeal of the AMT and death tax and the first-ever immediate write off of all new investment in buildings, equipment, software and technology,” said Brady in a widely distributed column.

While Brady’s tax reform proposal doesn’t tinker with the provision allowing the full deductibility of advertising costs, he has cautioned that other major interests may push for such in order to pay for additional tax relief or spending measures.

The TV spectrum auction, which is falling far below FCC Chairman Tom Wheeler’s expectations, will likely require Congress to increase the $1.75 billion budget to keep remaining broadcasters financially whole and to extend the spectrum repack time beyond the current 39-months set in law.

The ascendancy of Rep. Marsha Blackburn, R-Tenn., to chairmanship of the House Subcommittee on Communications and Technology may be the greatest concern for Radio broadcasters, though there are now two Texans serving on the committee, with Rep. Bill Flores, R-Waco, joining Rep. Pete Olson, R-Sugar Land.

Blackburn, whose district is centered in Nashville, is a staunch advocate for requiring Radio stations to pay a performance royalty in addition to the hundreds of millions of dollars the industry collectively pays annually to songwriters, composers and publishers.

Opposition to the effort is again being led by two Texas Congressmen – Mike Conaway, R-Midland, and Gene Green, D-Houston – who have re-filed HConRes 17, The Local Radio Freedom Act, a nonbinding resolution expressing Congressional opposition to a Performance Tax. The measure has attracted robust majorities in the House each time it’s been introduced, with Texas leading the nation in the number of co-sponsors.

Because this is a new Congress, broadcasters must ask their lawmakers to renew their co-sponsorship of the resolution.

These are the major issues as we know them today, but it is possible – even likely – that greater threats or opportunities may arise in the coming weeks.

For this reason, Texas broadcasters are encouraged to read and respond to TAB’s reports in the Bulletin and special email alerts. While TAB can help them understand why a proposal is concerning to their local broadcasters, only you – as a constituent – can make a particular lawmaker care about it.

Questions? Contact TAB's Oscar Rodriguez or call (512) 322-9944.

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