FEDERAL ADVOCACY UPDATE

Government Affairs
Amidst a Presidential campaign and a $700 billion economic bailout, OPERA America, in coalition with the Performing Arts Alliance, has remained active on arts-related issues. There has been movement on the White Space Issue, the IRA Rollover provision has been re-instated and important updates on tax withholdings for foreign guest artists and arts education research has been gathered. As anticipated, the majority of federal appropriation bills have been grouped into a continuing resolution where they will be maintained at FY08 funding levels until March 2009.

Congress Reinstates the IRA Charitable Rollover Provision
On September 29, Congress passed the Emergency Economic Stabilization Act of 2008, which included not only a $700 billion bailout bill, but the IRA Charitable Rollover Provision as part of the attached Tax Extender Package. Reinstated through December 2009, this giving incentive is great news for our field during the current climate of declining charitable donations. The IRA Charitable Rollover Provision, enacted in August 2006 as part of the Pension Protection Act, expired December 31, 2007. The IRA Rollover allows individuals age 70-1/2 years and older to make charitable gifts from their IRAs tax-free, up to a total of $100,000 per year.

Continuing Resolution Funds the Arts at FY08 Levels
On September 27, the Senate passed a continuing resolution which will fund the National Endowment for the Arts, National Endowment for the Humanities, Cultural Exchange Programs and Arts in Education Programs at level amounts until March 2009. A new administration and Congress will reconsider all Federal spending bills next spring.

Funding Levels through March 2009
• National Endowment for the Arts, $144.7 million
• Arts in Education Programs, Department of Education, $37.5 million
• Cultural Exchange Programs, Department of State, $8 million

ARTS Act
The Arts Require Timely Service Act (ARTS Act) did not see passage this session. Though a small window did exist for the ARTS Act to pass just before Congress departed for the elections, the broader controversy over amendments to the Immigration and Nationality Act stopped the bill from moving forward. There is growing bipartisan support in the Senate for the ARTS Act, which passed the House on April 1, 2008. The ARTS Act would guarantee streamlined visa processing by reducing the maximum processing time to 45 days for nonprofit arts-related petitions. The Performing Arts Alliance is working closely with Judiciary committee staff to prepare for potential passage next session.

WHITE SPACE ISSUE

References to wireless audio devices used by the performing arts include: microphones, intercoms, in-ear monitors and cueing/IFB systems. The following does not refer to cellular phones, wireless data cards, LAN equipment, ticket verification, assisted listening and other devices that do not operate in the white space spectrum.

Background
For over 35 years, wireless audio devices used in the performing arts have been operating on radio frequencies between the television broadcast channels, on the so-called “white spaces” (from 150MHz to 175MHz and 470MHz to 806MHz). Following the transition from analog to digital TV on February 17, 2009, television broadcasts will be occupying less space within the TV band. Due to this transition, the Federal Communications Commission (FCC) has been conducting proceedings to re-examine shared use of the re-allocated broadcast spectrum. This re-examination includes consideration by the FCC to either auction off the white spaces to the highest bidder or to open the white spaces to millions of unlicensed electronic devices.

For over a year now, the performing arts community has been urging the FCC to conduct due diligence with testing to ensure wireless audio devices will be protected from interference after the transition. Several technical solutions have been proposed including beaconing devices, spectrum-sensing devices and a geo-location online database.

In July, the Public Interest Spectrum Coalition (PISC) filed a formal complaint with the FCC, against Shure Microphones and other Part 74 equipment manufacturers for selling wireless microphones to ineligible users of Part 74 devices. As a result, the FCC issued a Notice of Proposed Rulemaking in August, announcing it has launched a formal investigation. Additionally, the FCC Notice of Proposed Rulemaking tentatively amends FCC rules to ban low power auxiliary stations (intended for use by wireless microphones and cue/control communication) from the 700 MHz Band frequencies after February 17, 2009.

Update
On October 15, the FCC issued its formal technical report which states: "At this juncture, we [the FCC] believe that the burden of 'proof of concept' has been met. We are satisfied that spectrum sensing in combination with geo-location and database access techniques can be used to authorize equipment today under appropriate technical standards." Additionally, FCC Chairman Martin has announced he is in support of opening the white spaces to new unlicensed devices. The FCC will be holding a vote on Chairman Martin’s plan to open the white spaces on November 4.

Change is coming for wireless audio devices used by the performing arts. Parts of the spectrum are already being restructured due to the FCC’s auction of channels 52-69 this summer. If the FCC implements the rules in their Notice of Proposed Rulemaking from August, wireless audio devices operating in the 700MHz Band frequencies will have to relocate immediately following the February 17 transition to digital TV.

OPERA America continues to work closely with organizations and tech advisors from different sectors to advocate for our position:
• To ensure the performing arts continue to present high quality performances without interference.
• To address regulatory issues so the performing arts sector is recognized as a legitimate user of the broadcast spectrum.
• To protect our members from prohibitive costs associated with restructuring of the broadcast spectrum.

GENERAL ADVOCACY NEWS

Arts Education Research Update
The U.S. Department of Education (USED) is beginning plans to implement the Fast Response Survey System (FRSS) in the arts in the 2009-2010 school year. The FRSS will provide important information revealing how much arts education is being delivered in schools. The next survey will be expanded to include seven survey instruments for the following respondents: elementary school principals, elementary classroom teachers, elementary music teachers, elementary visual arts teachers, secondary school principals, secondary music teachers and secondary visual arts teachers. A First Look at results from the survey of principals will be available in winter 2011 and a First Look at results from the survey of school specialists will be available in June 2011. The final report (and data available for license for public use) will be ready in spring 2012.

National Endowment for the Arts Leadership
On September 12, Dana Gioia publicly announced he will be stepping down in January 2009 from the chairman’s seat of the National Endowment for the Arts (NEA). Gioia was appointed by President Bush in February 2003, and during his tenure oversaw such agency initiatives as the Big Read and Shakespeare in American Communities. Following his departure, Gioia intends to divide his time between California, where he will be writing, and Washington D.C., where he will serve as director for the Aspen Institute’s Program in the Arts. It is presumed that one or all of the following individuals will lead the NEA until a new chairman is confirmed: Eileen Mason, senior deputy chairman; Robert Frankel, acting deputy chairman for grants & awards; Laurence Baden, deputy chairman for management & budget; and Patrice Walker Powell, deputy chairman for states, regions and local arts agencies.

Tax Withholdings for Foreign Guest Artists Update
OPERA America has obtained important clarification from the Internal Revenue Service (IRS) regarding expense payments for foreign guest artists. Published and verbal guidance from the IRS has been confusing and contradictory on the question of whether expense reimbursements and payments made to third parties on behalf of foreign artists are subject to withholding. Previous guidance from the IRS has indicated that these payments are subject to withholding. The newest word from the IRS, however, indicates otherwise. The most recent verbal guidance from the IRS, as well as the IRS’s written guidance, indicates that the "accountable plan rules" are applicable to nonresident aliens working as independent contractors in the United States. In effect, an expense reimbursement made to a foreign artist in accordance with these rules is not reportable as income – and is not subject to 30% withholding. The accountable plan rules also apply to expenses paid to third parties on the artist’s behalf (e.g., hotel accommodations and/or travel paid for or provided by a presenter). Learn more about the rules - and exceptions - in our updated guidance regarding payments subject to withholding on the Artists from Abroad web site. Complete Background and Details.

Tax FAQ Online
Answers to your most frequently asked questions regarding the tax requirements for foreign guests artists are now available online. Thanks to expert assistance provided by Artists from Abroad author and attorney Robyn Guilliams, the tax FAQ posted on the Artists from Abroad web site provides an overview of the most common inquiries regarding withholding requirements, tax returns, and identification numbers for foreign guest artists. View the FAQ.

Federal Advocacy Update, August 1, 2008 Federal Advocacy Update, August 1, 2008

On August 1st, Congress began a month-long recess before advancing spending bills for the majority of federal programs.  Spending bills for the NEA, NEH, and Arts in Education in addition to the ARTS Act and the IRA Rollover provision are still awaiting decision.  Discussions over drilling, energy costs and immigration issues are partly to blame for the hold.  Most likely, the majority of spending bills will receive level funding with last year’s spending amounts until a new Congress and President are in office.  With the upcoming November elections and many unresolved bills, September looks to be a very busy month for Congress.

August 1, 2008:  Current Status on Arts-Related Issues

 

·         Funding to the National Endowment for the Arts

Funding for the National Endowment for the Arts passed the House Interior Subcommittee with a recommended $15.3 million for FY 2009.  If approved by the full House and Senate, the increase would bring the NEA funding to $160 million. 

·         Funding for Arts in Education through the Department of Education

The House Appropriations Subcommittee has approved $38.9 million for Arts in Education through the U.S. Department of Education.   This is the second time in eight years the House has included funds for Arts in Education.

·         ARTS Act (Arts Require Timely Service)

The ARTS Act was approved by the House on April 1^st and is now up for consideration in the Senate.  If passed, the bill would improve the visa processing time for foreign guest artists while alleviating some of the petition expenses currently in place.

·         IRA Rollover

The Senate continues to discuss a package of tax extenders which includes a provision for the IRA Charitable Rollover.  Passed by the House in May, the IRA Charitable Rollover provision allows taxpayers, ages 70.5 and older, to make tax-free gifts up to $100,000 to charitable organizations as part of their required annual minimum distribution.

·         The Opening of the White Spaces

The FCC continues to conduct field tests, one of which was held in a performing arts venue, to explore the feasibility of opening the white space spectrum.  If approved by the FCC, many new devices will be allowed to enter the spectrum currently occupied by wireless microphones.  In an effort to protect the performing arts from interference and increased financial burden, OPERA America is asking the FCC for due diligence with all feasibility and device testing.

·         Artist-Museum Partnership Act

As of July 18^th, The Artist-Museum Partnership Act has received a record number of co-sponsors with 104 in the House and 32 in the Senate.   If passed, this Act would allow individual artists to claim a fair-market value tax deduction for tangible works they donated to nonprofit organizations.

 
April 21, 2008: IRA Rollover Update
The U.S. Senate will soon introduce a package of tax-related measures, including a provision to reinstate the IRA Rollover which expired in December 2007. The IRA Rollover provision allowed donors age 70.5 years and older to make tax-free charitable donations directly from their IRAs, up to an annual ceiling of $100,000. During its brief period of enactment, the IRA Rollover spurred millions of dollars in new charitable gifts to nonprofit organizations. The President included the IRA Rollover is his FY09 budget request and the Senate called for reinstating the provision during debate over the non-binding budget resolution. With this momentum, the legislation is expected to move through the Senate in the next 60 days.

April 1, 2008: ARTS Act Approved!
The U.S. House of Representatives approved the ARTS Act (HR 1312), which would reduce the total processing times for O and P arts-related visa petitions to a maximum of 45 days. The bill was approved by the House Judiciary Committee last fall but had been awaiting consideration by the full House of Representatives. Representatives John Conyers (D-MI), Dan Lungren (D-MA) and Lamar Smith (R-TX) spoke on the House Floor in support of the ARTS Act while Representative Steve King (R-IA) spoke in opposition of the bill. The next step is for the legislation to be approved by the U.S. Senate. A similar bill (S 2178) has already been introduced by Senators John Kerry (D-MA) and Orrin Hatch (R-UT). Stay tuned for updates on Senate progress of the ARTS Act.

 

March 21, 2008: Google Weighs in on White Spaces
Google Inc. filed with the Federal Communications Commission (FCC) an ex-parte letter egarding its desire to use the TV "White Space" for mobile broadband services. The letter argues that there is "no risk" to enhancing the spectrum usage and "can provide huge economic and social gains if used more efficiently." However, there is no assurance that Google's proposal will avoid interference with wireless microphones used in the performing arts and adequate testing is still needed.

February 4, 2008: President's FY09 Budget Released
On February 4, the President released his FY09 budget request, which serves as a starting point for the Congressional Appropriations process. Large cuts have been proposed to the National Endowment for the Arts and the Arts in Education Programs at the Department of Education, while cultural exchange and charitable giving incentives fared slightly better.

• National Endowment for the Arts — Following a historic $20.3 million increase for the NEA for FY08, the President requested a $16.3 million dollar decrease in funding for the agency for a total budget of $128.4. This figure is identical to the President's FY08 budget request even though Congress approved a final budget of $144.4 million for the agency for FY08. This decrease could affect grants to opera companies nationwide.
• Arts in Education Programs — For the eighth consecutive year, the President zeroed out funding for Arts in Education programs at the U.S. Department of Education. Congress approved $37.5 million for this program in FY08.
• Bureau of Educational and Cultural Affairs (ECA) — The President has requested $522.4 million for the Bureau of Educational and Cultural Affairs at the State Department, a $17 million increase over last year's appropriation. It is unclear how much of this money will be directed to cultural exchange programs.
• IRA Charitable Rollover — The President's FY09 budget requests a permanent enactment of the IRA Charitable Rollover provision which expired in December 2007.

Stay up-to-date on all federal advocacy information through OPERA America's monthly advocacy enewsletter: AdvocacyLink. AdvocacyLink is an OPERA America member benefit. To join OPERA America , please contact Paul Gosselin at PGosselin@operaamerica.org.