Amendment was passed on Friday by the National Assembly

Gallic industryites are up in arms about a game-changing amendment, passed on Friday by the National Assembly, allowing the government to divert money to offset the country’s budget deficit from coin collected by film board CNC to fund the biz.

If the bill is approved by the Senate next month, the CNC’s revenues from taxes on film tickets, TV channels, VOD, mobile, Internet, DVDs and film-related products will be individually capped and anything earned above the cap will go to the state.

For instance, revs from ticket sales will be capped at €130 million ($180 million), while revs from TV, mobile and Internet services distributors and telecom operators will be limited to $747 million. Folks argue that these sectors are interdependent, meaning that if one year the B.O. is down but the VOD sales are up, they would support each other.

A previous amendment voted on Thursday would limit the CNC’s resources from all taxes to $972 million with the excess going to the state.

“Such a measure would bring down the system that has allowed French cinema to maintain a strong film industry … since the CNC’s founding in 1946; and it would preclude the CNC from fulfilling its mission,” declared the filmmakers and producers union in a statement on Friday, during Dijon’s Rencontres Cinematographiques. Event is hosted by ARP, the guild for authors, directors and producers. Attending a debate in Dijon, CNC prexy Eric Garandeau, former communication and culture advisor to president Nicolas Sarkozy, said he understood that pols want the CNC to take part in the battle to improve the country’s economy as other state bodies are doing.”But it’s also crucial for the CNC to maintain its autonomy — our resources must continue to ensure the sector’s economic and creative growth.” Many industryites at the Rencontres in Dijon believed the bill would be amended before reaching the Senate.

Garandeau said a meeting at Matignon, the official residence of prime minister Francois Fillon, was planned for today to discuss the measure.

Last fall, the Senate’s finance committee tried to divert $180 million from the CNC’s 2010 revenues but was derailed by protests from movie unions. Instead, the state took $26.6 million.

The CNC has been under the Senate’s finance committee’s radar since last year, when its revenues skyrocketed largely thanks to coin from telco operators and ticket sales. In 2010, the CNC’s budget was up 6% on 2009 to $755 million.

“It’s the principle of this measure that worries the industry,” explains an insider.

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