I 

108TH CONGRESS 

1ST SESSION H. R. 715

To amend the Internal Revenue Code of 1986 to allow a United States 

independent film and television production wage credit. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 12, 2003

Mr. DREIER (for himself, Mr. RANGEL, Ms. DUNN, Mr. BERMAN, Mr. FOLEY, 

Mr. MATSUI, Mrs. BONO, Mr. BECERRA, Mr. WELLER, Mr. ABERCROMBIE, Mr. BACA, Mr. BLUMENAUER, Ms. BORDALLO, Mr. BOUCHER, 

Mr. CALVERT, Mrs. CAPPS, Mr. COBLE, Mr. DOYLE, Mr. FARR, Mr. FILNER, Mr. FROST, Mr. GIBBONS, Mr. GREENWOOD, Ms. HARMAN, Mr. 

JOHN, Mrs. JOHNSON of Connecticut, Mr. KELLER, Mr. LANTOS, Mr. 

MCINTYRE, Mr. MCKEON, Mr. MCGOVERN, Ms. MILLENDER-MCDONALD, Mrs. MYRICK, Mr. NADLER, Mr. PRICE of North Carolina, Mr. 

RADANOVICH, Ms. ROYBAL-ALLARD, Mr. SCHIFF, Mr. SHERMAN, Ms. 

SLAUGHTER, Mr. SMITH of Texas, Mr. TAUZIN, Mr. THOMPSON of California, Ms. WATSON, Mr. WAXMAN, Mr. WEXLER, and Ms. WOOLSEY) 

introduced the following bill; which was referred to the Committee on 

Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to allow a 

United States independent film and television production 

wage credit.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘United States Inde3 pendent Film and Television Production Incentive Act of 

4 2003’’. 

5 SEC. 2. TAX INCENTIVES FOR QUALIFIED UNITED STATES 

6 INDEPENDENT FILM AND TELEVISION PRO7 DUCTION. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 (relating to business related credits) is amended by 

11 adding at the end the following new section: 

12 ‘‘SEC. 45G. UNITED STATES INDEPENDENT FILM AND TELE13 VISION PRODUCTION WAGE CREDIT. 

14 ‘‘(a) AMOUNT OF CREDIT.—

15 ‘‘(1) IN GENERAL.—For purposes of section 38, 

16 the United States independent film and television 

17 production wage credit determined under this section 

18 with respect to any taxpayer for any taxable year is 

19 an amount equal to 25 percent of the qualified 

20 wages paid or incurred per qualified United States 

21 independent film and television production during 

22 such taxable year. 

23 ‘‘(2) HIGHER PERCENTAGE FOR PRODUCTION

24 EMPLOYMENT IN CERTAIN AREAS.—In the case of 

25 qualified employees in any qualified United States 

26 independent film and television production located in 
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1 an area eligible for designation as a low-income com2 munity under section 45D or eligible for designation 

3 by the Delta Regional Authority as a distressed 

4 county or isolated area of distress, paragraph (1) 

5 shall be applied by substituting ‘35 percent’ for ‘25 

6 percent’. 

7 ‘‘(b) ONLY FIRST $25,000 OF WAGES PER PRODUC8 TION TAKEN INTO ACCOUNT.—With respect to each quali9 fied United States independent film and television produc10 tion, the amount of qualified wages paid or incurred to 

11 each qualified employee or personal service corporation 

12 which may be taken into account per such production shall 

13 not exceed $25,000. 

14 ‘‘(c) QUALIFIED WAGES.—For purposes of this sec15 tion—

16 ‘‘(1) IN GENERAL.—The term ‘qualified wages’ 

17 means—

18 ‘‘(A) any wages paid or incurred by an em19 ployer for services performed in the United 

20 States by an employee while such employee is a 

21 qualified employee, 

22 ‘‘(B) the employee fringe benefit expenses 

23 of the employer allocable to such services per24 formed by such employee, 
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1 ‘‘(C) any payments made to personal serv2 ice corporations as defined in section 

3 269A(b)(1) for services performed in the United 

4 States, and 

5 ‘‘(D) renumeration, other than wages, for 

6 services personally rendered in the United 

7 States. 

8 ‘‘(2) QUALIFIED EMPLOYEE.—

9 ‘‘(A) IN GENERAL.—The term ‘qualified 

10 employee’ means, with respect to any period, 

11 any individual who renders personal services if 

12 substantially all of such services are performed 

13 during such period in an activity related to any 

14 qualified United States independent film and 

15 television production. 

16 ‘‘(B) CERTAIN INDIVIDUALS NOT ELIGI17 BLE.—Such term shall not include—

18 ‘‘(i) any individual described in sub19 paragraph (A), (B), or (C) of section 

20 51(i)(1), and 

21 ‘‘(ii) any 5-percent owner (as defined 

22 in section 416(i)(1)(B). 

23 ‘‘(3) COORDINATION WITH OTHER WAGE CRED24 ITS.—No credit shall be allowed under any other 

25 provision of this chapter for wages paid to any em-
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1 ployee during any taxable year if the employer is al2 lowed a credit under this section for any of such 

3 wages.

4 ‘‘(4) WAGES.—The term ‘wages’ has the same 

5 meaning as when used in section 51. 

6 ‘‘(5) EMPLOYEE FRINGE BENEFIT EXPENSES.—

7 The term ‘employee fringe benefit expenses’ means 

8 the amount allowable as a deduction under this 

9 chapter to the employer for any taxable year with re10 spect to—

11 ‘‘(A) employer contributions under stock 

12 bonus, pension, profit-sharing, or annuity plan, 

13 ‘‘(B) employer-provided coverage under 

14 any accident or health plan for employees, and 

15 ‘‘(C) the cost of life or disability insurance 

16 provided to employees. 

17 Any amount treated as wages under paragraph 

18 (1)(A) shall not be taken into account under this 

19 subparagraph. 

20 ‘‘(d) QUALIFIED UNITED STATES INDEPENDENT

21 FILM AND TELEVISION PRODUCTION.—For purposes of 

22 this section—

23 ‘‘(1) IN GENERAL.—The term ‘qualified United 

24 States independent film and television production’ 

25 means any production of any motion picture (wheth-
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1 er released theatrically or directly to video cassette 

2 or any other format), television or cable program3 ming, mini series, episodic television, movie of the 

4 week, or pilot production for any of the preceding 

5 productions if—

6 ‘‘(A) 75 percent of the total wages of the 

7 production are qualified wages, 

8 ‘‘(B) the production is created primarily 

9 for use as public entertainment or for edu10 cational purposes, and 

11 ‘‘(C) the total cost of wages of the produc12 tion is more than $200,000 but less than 

13 $10,000,000. 

14 Such term shall not include any production if 

15 records are required under section 2257 of title 18, 

16 United States Code, to be maintained with respect 

17 to any performer in such production (reporting of 

18 books, films, etc. with sexually explicit conduct). For 

19 purposes of subparagraph (A), no day of photog20 raphy shall be considered a day of principal photog21 raphy unless the cost of wages for the production for 

22 that day exceeds the average daily cost of wages for 

23 such production. 

24 ‘‘(2) PUBLIC ENTERTAINMENT.—The term 

25 ‘public entertainment’ includes a motion picture 
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1 film, video tape, or television program intended for 

2 initial broadcast via the public broadcast spectrum 

3 or delivered via cable distribution, or productions 

4 that are submitted to a national organization in ex5 istence on July 27, 2001, that rates films for violent 

6 or adult content. Such term does not include any 

7 film or tape the market for which is primarily top8 ical, is otherwise essentially transitory in nature, or 

9 is produced for private noncommercial use. 

10 ‘‘(3) INFLATION ADJUSTMENT.—

11 ‘‘(A) IN GENERAL.—In the case of any 

12 taxable year beginning in a calendar year after 

13 2003, the $10,000,000 amount contained in 

14 paragraph (1)(C) shall be increased by an 

15 amount equal to—

16 ‘‘(i) such dollar amount, multiplied by 

17 ‘‘(ii) the cost-of-living adjustment 

18 under section 1(f)(3) for the calendar year 

19 in which the taxable year begins, deter20 mined by substituting ‘calendar year 2002’ 

21 for ‘calendar year 1992’ in subparagraph 

22 (B) thereof. 

23 ‘‘(B) ROUNDING.—If any increase deter24 mined under subparagraph (A) is not a multiple 
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1 of $500,000, such amount shall be rounded to 

2 the nearest multiple of $500,000. 

3 ‘‘(e) CONTROLLED GROUPS.—For purposes of this 

4 section—

5 ‘‘(1) all employers treated as a single employer 

6 under subsection (a) or (b) of section 52 shall be 

7 treated as a single employer for purposes of this 

8 subpart, and 

9 ‘‘(2) the credit (if any) determined under this 

10 section with respect to each such employer shall be 

11 its proportionate share of the wages giving rise to 

12 such credit. 

13 ‘‘(f) APPLICATION OF CERTAIN OTHER RULES.—For 

14 purposes of this section, rules similar to the rules of sec15 tion 51(k) and subsections (c) and (d) of section 52 shall 

16 apply.’’. 

17 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec18 tion 38(b) of the Internal Revenue Code of 1986 is amend19 ed by striking ‘‘plus’’ at the end of paragraph (14), by 

20 striking the period at the end of paragraph (15) and in21 serting ‘‘, plus’’, and by adding at the end the following 

22 new paragraph:

23 ‘‘(16) the United States independent film and 

24 television production wage credit determined under 

25 section 45G(a).’’. 
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1 (c) NO CARRYBACKS.—Subsection (d) of section 39 

2 of the Internal Revenue Code of 1986 (relating to 

3 carryback and carryforward of unused credits) is amended 

4 by adding at the end the following: 

5 ‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT

6 BEFORE EFFECTIVE DATE.—No portion of the un7 used business credit for any taxable year which is 

8 attributable to the United States independent film 

9 and television production wage credit determined 

10 under section 45G may be carried back to a taxable 

11 year ending before the date of the enactment of sec12 tion 45G.’’. 

13 (d) DENIAL OF DOUBLE BENEFIT.—Subsection (a) 

14 of section 280C of the Internal Revenue Code of 1986 is 

15 amended by inserting ‘‘45G(a),’’ after ‘‘45A(a),’’. 

16 (e) CONFORMING AMENDMENT.—The table of sec17 tions for subpart D of part IV of subchapter A of chapter 

18 1 of the Internal Revenue Code of 1986 is amended by 

19 adding at the end the following new item:

‘‘Sec. 45G. United States independent film and television production wage credit.’’.

20 (f) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to amounts paid or incurred after 

22 the date of the enactment of this Act in taxable years end23 ing after such date.

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