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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1278 Introduced in Senate (IS)]

107th CONGRESS
  1st Session
                                S. 1278

  To amend the Internal Revenue Code of 1986 to allow a United States 
        independent film and television production wage credit.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 31, 2001

 Mrs. Lincoln (for herself, Ms. Snowe, Mr. Durbin, Mr. Breaux, and Ms. 
   Landrieu) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To amend the Internal Revenue Code of 1986 to allow a United States 
        independent film and television production wage credit.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``United States Independent Film and 
Television Production Incentive Act of 2001''.

SEC. 2. TAX INCENTIVES FOR QUALIFIED UNITED STATES INDEPENDENT FILM AND 
              TELEVISION PRODUCTION.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by adding at the end 
the following new section:

``SEC. 45G. UNITED STATES INDEPENDENT FILM AND TELEVISION PRODUCTION 
              WAGE CREDIT.

    ``(a) Amount of Credit.--
            ``(1) In general.--For purposes of section 38, the United 
        States independent film and television production wage credit 
        determined under this section with respect to any employer for 
        any taxable year is an amount equal to 25 percent of the 
        qualified wages paid or incurred during such taxable year.
            ``(2) Higher percentage for production employment in 
        certain areas.--In the case of qualified employees in any 
        qualified United States independent film and television 
        production located in an area eligible for designation as a 
        low-income community under section 45D or eligible for 
        designation by the Delta Regional Authority as a distressed 
        county or isolated area of distress, paragraph (1) shall be 
        applied by substituting `35 percent' for `25 percent'.
    ``(b) Only First $25,000 of Wages per Year Taken Into Account.--
With respect to each qualified United States independent film and 
television production, the amount of qualified wages paid or incurred 
to each qualified employee which may be taken into account for a 
taxable year shall not exceed $25,000.
    ``(c) Qualified Wages.--For purposes of this section--
            ``(1) In general.--The term `qualified wages' means--
                    ``(A) any wages paid or incurred by an employer for 
                services performed in the United States by an employee 
                while such employee is a qualified employee, and
                    ``(B) the employee fringe benefit expenses of the 
                employer allocable to such services performed by such 
                employee.
            ``(2) Qualified employee.--
                    ``(A) In general.--The term `qualified employee' 
                means, with respect to any period, any employee of an 
                employer if substantially all of the services performed 
                during such period by such employee for such employer 
                are performed in an activity related to any qualified 
                United States independent film and television 
                production in a trade or business of the employer.
                    ``(B) Certain individuals not eligible.--Such term 
                shall not include--
                            ``(i) any individual described in 
                        subparagraph (A), (B), or (C) of section 
                        51(i)(1), and
                            ``(ii) any 5-percent owner (as defined in 
                        section 416(i)(1)(B).
            ``(3) Coordination with other wage credits.--No credit 
        shall be allowed under any other provision of this chapter for 
        wages paid to any employee during any taxable year if the 
        employer is allowed a credit under this section for any of such 
        wages.
            ``(4) Wages.--The term `wages' has the same meaning as when 
        used in section 51.
            ``(5) Employee fringe benefit expenses.--The term `employee 
        fringe benefit expenses' means the amount allowable as a 
        deduction under this chapter to the employer for any taxable 
        year with respect to--
                    ``(A) employer contributions under stock bonus, 
                pension, profit-sharing, or annuity plan,
                    ``(B) employer-provided coverage under any accident 
                or health plan for employees, and
                    ``(C) the cost of life or disability insurance 
                provided to employees.
        Any amount treated as wages under paragraph (1)(A) shall not be 
        taken into account under this subparagraph.
    ``(d) Qualified United States Independent Film and Television 
Production.--For purposes of this section--
            ``(1) In general.--The term `qualified United States 
        independent film and television production' means any 
        production of any motion picture (whether released theatrically 
        or directly to video cassette or any other format), television 
        or cable programming, mini series, episodic television, movie 
        of the week, or pilot production for any of the preceding 
        productions if--
                    ``(A) the majority of the days of principal 
                photography of the production are within the United 
                States (or in the case of the credit under subsection 
                (a)(2), the area described in such subsection),
                    ``(B) the production is created primarily for use 
                as public entertainment or for educational purposes, 
                and
                    ``(C) the total cost of qualified wages of the 
                production is more than $200,000 but less than 
                $10,000,000.
        Such term shall not include any production if records are 
        required under section 2257 of title 18, United States Code, to 
        be maintained with respect to any performer in such production 
        (reporting of books, films, etc. with sexually explicit 
        conduct). For purposes of subparagraph (A), no day of 
        photography shall be considered a day of principal photography 
        unless the cost of wages for the production for that day 
        exceeds the average daily cost of wages for such production.
            ``(2) Public entertainment.--The term `public 
        entertainment' includes a motion picture film, video tape, or 
        television program intended for initial broadcast via the 
        public broadcast spectrum or delivered via cable distribution, 
        or productions that are submitted to a national organization in 
        existence on July 27, 2001, that rates films for violent or 
        adult content. Such term does not include any film or tape the 
        market for which is primarily topical, is otherwise essentially 
        transitory in nature, or is produced for private noncommercial 
        use.
            ``(3) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 2001, the 
                $10,000,000 amount contained in paragraph (1)(C) shall 
                be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment under 
                        section 1(f)(3) for the calendar year in which 
                        the taxable year begins, determined by 
                        substituting `calendar year 2000' for `calendar 
                        year 1992' in subparagraph (B) thereof.
                    ``(B) Rounding.--If any increase determined under 
                subparagraph (A) is not a multiple of $500,000, such 
                amount shall be rounded to the nearest multiple of 
                $500,000.
    ``(e) Controlled Groups.--For purposes of this section--
            ``(1) all employers treated as a single employer under 
        subsection (a) or (b) of section 52 shall be treated as a 
        single employer for purposes of this subpart, and
            ``(2) the credit (if any) determined under this section 
        with respect to each such employer shall be its proportionate 
        share of the wages giving rise to such credit.
    ``(f) Application of Certain Other Rules.--For purposes of this 
section, rules similar to the rules of section 51(k) and subsections 
(c) and (d) of section 52 shall apply.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 is amended by striking ``plus'' at the 
end of paragraph (14), by striking the period at the end of paragraph 
(15) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(16) the United States independent film and television 
        production wage credit determined under section 45G(a).''.
    (c) No Carrybacks.--Subsection (d) of section 39 of the Internal 
Revenue Code of 1986 (relating to carryback and carryforward of unused 
credits) is amended by adding at the end the following:
            ``(11) No carryback of section 45g credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the United States independent 
        film and television production wage credit determined under 
        section 45G may be carried back to a taxable year ending before 
        the date of the enactment of section 45G.''.
    (d) Denial of Double Benefit.--Subsection (a) of section 280C of 
the Internal Revenue Code of 1986 is amended by inserting ``45G(a),'' 
after ``45A(a),''.
    (e) Conforming Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

                              ``Sec. 45G. United States independent 
                                        film and television production 
                                        wage credit.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act in taxable years ending after such date.
                                 <all>
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