Hungary gov’t overhauls film financing law

New org to provide greater oversight on biz

After months of debate, the Hungarian parliament has passed modifications to the Hungarian Film Law, which has dramatically reformed the local cinema industry and is expected to change the way movies are being made in the country.

Under the law, the cinema industry will be supervised by an office called the Hungarian National Film Fund, which will be overseen by the National Development Ministry, not the Resource Ministry that currently supervises cultural affairs.

The fund will be solely responsible for disbursing all public coin for film production, and will be financed from 80% of the tax revenue earned by the Number Six national lottery.

According to government sources, the estimated 2012 budget for the industry will be 4 billion forint ($17.8 million), which may be enough to greenlight up to eight films for production, as well as one animated film and a documentary.

Hungarian filmmakers will be able to apply for script development funds based on synopses or treatments. To strengthen the quality of scripts produced in Hungary, the fund will also appoint advisers who will assist and oversee development.

Other key points in the legislation include:

•The law grants the fund rights to Hungary’s state-owned archive of films for international sales. Given that this archive includes classics reaching back to the silent film era, the sale of foreign rights for these titles is expected to bring further financing to the cash-strapped industry.

• The law places the Film Office, which is mandated to certify films productions for eligibility for tax rebates of up to 20%, under a new office, the National Media and Communications Authority, which is expected to provide increased oversight.

• Authorities say Hungary’s tax deduction and rebate scheme, which provides budget savings that draws scores of foreign productions each year, will be unchanged.

The chief architect of the changes to the law is Hollywood producer Andy Vajna, who was born in Hungary and was reportedly mandated by prime minister Viktor Orban to reform the nation’s cash-strapped industry, which had previously been mired in financial scandal and charges of poor funding oversight.