Esta ley ordena a la Corporación para el Desarrollo de las Artes, Ciencias y la Industria Cinematográfica de Puerto Rico y a la Administración de Desarrollo Comercial a diseñar y ejecutar un plan estratégico para la comercialización y desarrollo de la Industria Cinematográfica. El objetivo es promover nuevos mecanismos de mercadeo, financiamiento, generación de empleo y fortalecimiento de esta industria en Puerto Rico. La ley detalla los aspectos que debe abordar el plan, como la medición del personal, la demanda local e internacional, los niveles de producción, los sistemas de mercadeo, el perfil de las películas exhibidas y la viabilidad de modificaciones al Código de Rentas Internas. También establece la colaboración obligatoria de otras agencias gubernamentales y la creación de un equipo de trabajo con representantes de la industria para asesorar en la elaboración del informe final. Se faculta a las entidades a adoptar reglamentos y contratar personal técnico, y se dispone que el plan estratégico deberá actualizarse cada dos años.
(Approved March 29, 2004)
To direct the Corporation for the Development of the Arts, Sciences and the Filmmaking Industry of Puerto Rico and the Commercial Development Administration to design and execute a strategic plan for the marketing and development of the Filmmaking Industry in order to promote new mechanisms for the marketing, financing, generation of jobs and the bolstering of the Filmmaking Industry in Puerto Rico.
Filmmaking is an artistic expression that combines diverse techniques of presentation, acting, musical scores and creativity at their maximum splendor. But, it is also an industry allied to the State in the creation of a prosperous and functional economy capable of withstanding the challenges of globalization.
In our specific case, it should be stressed that filmmaking in Puerto Rico should have the best structural conditions for its development, since it is one of the industries with most potential for growth. Artistic talent, technical intelligence and the avant-guard skills of the personnel that works locally in the production of films compare favorably with the best minds of international cinematography.
However, its development is still incipient, therefore, neither the State nor the other socioeconomic sectors of the country have recognized its enormous potential to spring forth as a competitive, productive industry and
make a significant contribution to the creation, improvement and preservation of jobs in our country.
To refocus this lack of awareness and concentrate due attention on this industry and its potential for development, the State may take steps toward its most favorable growth and solidity as an industry. These steps shall then represent the catalytic agent that will boost its development, thus contributing to the expansion of its offers, and broaden its demand.
This Act initiates one of the steps leading to the opening of this industry to the inexhaustible universe of development opportunities. Through this Act, the Puerto Rican Corporation for the Development of the Arts, Sciences and Filmmaking Industry and the Commercial Development Administration of Puerto Rico are directed to draft a strategic plan for the marketing and development of the Filmmaking Industry in Puerto Rico.
By virtue of Act No. 121 of August 17, 2001, the Corporation for the Development of the Arts, Sciences and Filmmaking Industry of Puerto Rico was created with the ministerial duty to provide the necessary incentives to enable the development and the expansion of cinematographic productions in Puerto Rico. For the pursuit of the abovestated purposes, the "Fund of the Corporation for the Development of the Arts, Sciences and the Filmmaking Industry of Puerto Rico" was created as a primary instrument to finance, promote, develop and stimulate all activity pertaining to the production of films. Said fund allows a myriad of services, such as the granting of funds, as loans, for the film productions of local entities and the promotion of quality productions.
However, such structures require additional support from the State to truly achieve the formation of a highly-profitable, successful and financiallysolid Filmmaking Industry. By means of the strategic plan for the marketing
and development of our filmmaking industry, designed and implemented by the Corporation and the Commercial Development Administration, pursuant to this Act, shall hereby have a scientifically reliable mechanism that will allow the State, which thus have more elements of judgment and a vital informational base, to better serve film producers, to maximize their financing potential, their operational funds, improve their productivity, broaden their budget flexibility and design new methods to market their offerings. Thus, the commitment of this Legislature to genuinely promote the development of a competitive filmmaking industry is emphasized.
Section 1.- Statement of Public Policy It is the policy of the Commonwealth that the Commercial Development Administration, as an agency involved with the development of the commercial competitiveness of small and medium-size business, with their respective programs, initiatives and components, and the Corporation for the Development of Arts, Sciences and Filmmaking Industry of Puerto Rico, as the central agency in the development of our cinematography, shall activate their ministerial role and discharge their institutional duties with promptness and agility, to bring about the specific circumstances to promote the stability, continuation and development of the Filmmaking Industry in Puerto Rico.
Therefore, it is hereby declared as the public policy, that these entities shall exercise their organic powers, in the interest of analyzing, among other matters, the economic situation of the Filmmaking Industry of Puerto Rico, its possibilities for growth and the available options to revitalize its components and reenergize its offerings as an industry.
Moreover, it is considered as the public policy of the State that the Filmmaking Industry must be submitted to a strategic plan, drafted by the
government through which the present state of this sector may be assessed with regard to many of the most significant economic indicators and through which measures may be proposed, to be adopted in order to guide its development along the most favorable course.
Section 2.- Strategic Plan It is hereby provided that the Corporation for the Development of the Arts, Sciences and Filmmaking Industry of Puerto Rico and the Commercial Development Administration, shall design, manage and execute a strategic plan for the marketing and development of the Local Filmmaking Industry.
Section 3.- Issues With the purpose of making the abovementioned strategic plan viable, the Corporation and the Administration shall divide said plan into different parts or components, as follows:
a) Measure and calculate the direct, indirect and induced Filmmaking Industry personnel. In turn, the industrial scenarios, financial measures and marketing options that would enable an exponential increase of jobs generated by said Industry shall be examined and identified. b) To verify the present demand in the local and international spheres for the products and services that comprise the offerings of said industry and the quality and quantity of the offer of its products and services. To complement it, alternate mechanisms or proposals must be devised to make the offer of its production more attractive and profitable and, consequentially, broaden its universe of consumers. c) To quantify the level of production of its different segments or components and the diversity of its offerings. Likewise, unique
ways of multiplying production levels and diversifying its offer shall be evaluated and consigned. d) To evaluate the marketing systems and mechanisms that are presently operating in said industry at the national and international level in order to evaluate and verify their effectiveness and rationality, in order to identify options to make them more sophisticated, fine tuned and tempered to the modern marketing techniques of industries that are similarly placed and categorized. e) To prepare a complete profile of the films shown in our country, by means of which the local or external origin of the productions, their source of financing and their earnings shall be identified. f) Furthermore, the distribution of the income from ticket sales between the exhibitor and the producing company shall be estimated in terms of the local and international cinematographic Industry. g) To assess the viability and impact of certain modifications to the Internal Revenue Code of Puerto Rico, in the item of exclusions of gross income for the purpose of having local film exhibitors exclude, wholly or partially, ninety (90) percent of their technical and human components from the gross income of films produced in Puerto Rico.
Section 4.- Interagency Assistance and Counseling In the design, management and execution of the above plan, the Corporation and the Administration shall depend on the mandatory collaboration, constant advice and technical-operational assistance of the
Industrial Development Company, the Exports Development Corporation, the Department of Labor and Human Resources and the respective bodies and units of these agencies and of any other agency or public instrumentality, with information that is essential to the strategic plan or substantially concerned in the matters or areas to be addressed in the abovesaid plan.
The Administration and the Corporation for the Development of Puerto Rican Arts, Sciences and Filmmaking Industry of Puerto Rico shall produce a report with the results of the efforts directed in this Act, with concrete conclusions and recommendations on the basis of the study performed. Provided, that by virtue of said report, the Corporation shall render institutional deference to the results thereof, to reconfigure the programs and initiatives of the entity, so that its conclusions be taken into account in the planning of its projects, the granting of its incentives, the granting of financing, in the technical assistance provided, and in all the other areas in which it may serve the Filmmaking Industry.
In turn, the Commercial Development Administration shall give great deference and weighty consideration to said conclusions and recommendations at the time of fixing the programmatic priorities for the remaining components and units, at the time of initiating and sponsoring special commercial development projects and at the moment of the distributing the financial, economic or operational resources corresponding to its different units. All this shall be done without prejudice to the ministerial duties and functions required of the Commercial Development Administration, by virtue of its Organic Act, its regulations and its mission in the articulation and implementation of the public policy.
In turn, it is provided that the Commercial Development Administration shall have a prevailing function to give technical advice and collaboration to
the Corporation, which shall have the primary responsibility in the design and implementation of said Act. It is further provided that the Commercial Development Administration shall have the primary duty to identify the persons with the necessary expertise to execute the plan, identify the most important external markets of this Industry, and to arrange for the use of the international offices of the Department of Economic Development and Commerce, with the pertinent entities and officials, to promote the Filmmaking Industry of Puerto Rico.
It shall be understood that the above undertaking shall solely be for purposes of preventing the historic exclusion that this industry has faced in the commercial development model adopted and implemented, and shall not be an authorization to grant a special position to this industry in the proposed planning. It has only been empowered to insert this industry in the plans of this entity, without impairing the equality of conditions and importance that the other industries have in these government initiatives.
Section 5.- Reports Said entities shall remit, within ninety (90) days of the effectiveness of this Act, a detailed report to the Governor and the Legislature on the results of their respective work pursuant to the Act established hereby and on the measures and recommendations that they may draft to expand the possibilities of growth and development of the Filmmaking Industry and to broaden the administrative measures adopted pursuant to Section 6 of this Act.
As a prior step to the drafting and delivery of the above report, the Corporation and the Administration shall convene a Puerto Rico Filmmaking Industry Work Team as an advisory and consulting entity of such bodies in the determination of the conclusions and recommendations to be submitted.
The said Work Team shall be constituted by three (3) representatives of the local Filmmaking Industry, the Secretary of the Department of Economic Development and Commerce or a duly authorized representative thereof, the Executive Director of the Industrial Development Company or a representative thereof and the Secretary of the Department of Labor and Human Resources, or his/her representative. Provided, that the representatives of the Filmmaking Industry shall be designated by the Secretary of the Department of Economic Development and Commerce and the President of the Board of Directors of the Filmmaking Corporation.
Section 6.- Regulations These organisms are hereby granted the power to correspondingly adopt the internal normative regulations or administrative orders that are necessary and instrumental to give full compliance to the provisions of this Act.
If any provision of this Act were declared unconstitutional by any court with jurisdiction, it shall be understood and construed that the remaining articles shall subsist in effectiveness and validity.
The Administration and the Corporation are hereby empowered to contract all the necessary and instrumental technical personnel to carry out the mandate contemplated herein. Provided, that natural or juridical persons specialized in the marketing of this Industry shall be hired among the technical personnel to be recruited for such purposes.
Likewise, it shall be deemed mandatory that in the performance of the duties provided in this Act, the local producers and professionals of the Filmmaking Industry shall have an active participation in the design and implementation of the strategic plan created herein as advisors and collaborators of the government entities, that shall, in the last instance reserve the final authority to decide the scope and operation of the established plan.
It shall be understood that the strategic plan provided herein shall be updated recurrently and uninterruptedly every two (2) years after the approval of this Act. It being understood that the work team created pursuant to Section 5 of this Act shall be convened as an advisory entity in the updating of said plan.
Section 10.- Effectiveness This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 90 (H.B. 3773) of the $7^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to direct the Corporation for the Development of the Arts, Sciences and the Filmmaking Industry of Puerto Rico and the Commercial Development Administration to design and execute a strategic plan for the marketing and development of the Filmmaking Industry in order to promote new mechanisms for the marketing, financing, generation of jobs and the bolstering of the Filmmaking Industry in Puerto Rico, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $3^{ ext {rd }}$ of August of 2005.
Francisco J. Domenech Director