S.Amdt. 379

SA 379. Mr. HATCH submitted an amendment intended to be proposed to
amendment SA 98 proposed by Mr. Inouye (for himself and Mr. Baucus) to
the bill H.R. 1, making supplemental appropriations for job
preservation and creation, infrastructure investment, energy efficiency
and science, assistance to the unemployed, and State and local fiscal
stabilization, for fiscal year ending September 30, 2009, and for other
purposes; which was ordered to lie on the table; as follows:

On page 570, after line 8, insert the following:

SEC. --. MODIFICATION OF RESEARCH CREDIT.

(a) Simplified Credit for Qualified Research Expenses.--
Subsection (a) of section 41 is amended to read as follows:
``(a) General Rule.--
``(1) Credit determined.--For purposes of section 38, the
research credit determined under this section for the taxable
year shall be an amount equal to 20 percent of so much of the
qualified research expenses for the taxable year as exceeds
50 percent of the average qualified research expenses for the
3 taxable years preceding the taxable year for which the
credit is being determined.
``(2) Special rule in case of no qualified research
expenses in any of 3 preceding taxable years.--
``(A) Taxpayers to which paragraph applies.--The credit
under this section shall be determined under this paragraph
if the taxpayer has no qualified research expenses in any one
of the 3 taxable years preceding the taxable year for which
the credit is being determined.
``(B) Credit rate.--The credit determined under this
paragraph shall be equal to 10 percent of the qualified
research expenses for the taxable year.''.
(b) Conforming Amendments.--
(1) Termination of alternative incremental credit.--
Paragraph (4) of subsection (c) is amended by adding at the
end the following new subparagraph:
``(C) Termination.--No election under this paragraph shall
apply to taxable years beginning after December 31, 2008.''.
(2) Termination of base amount calculation.--Section 41 is
amended by striking subsection (c) and redesignating
subsection (d) as subsection (c).
(3) Termination of basic research payment calculation.--
Section 41 is amended by striking subsection (e) and
redesignating subsections (f) and (g) as subsections (d) and
(e), respectively.
(4) Special rules.--
(A) Paragraph (1)(A)(ii) of subsection (d) of section 41,
as so redesignated, is amended by striking ``shares of the
qualified research expenses, basic research payments, and
amounts paid or incurred to energy research consortiums,''
and inserting ``share of the qualified research expenses''.
(B) Paragraph (1)(B)(ii) of section 41(d), as so
redesignated, is amended by striking ``shares of the
qualified research expenses, basic research payments, and
amounts paid or incurred to energy research consortiums,''
and inserting ``share of the qualified research expenses''.
(C) Paragraph (3) of section 41(d), as so redesignated, is
amended--
(i) by striking ``, and the gross receipts of the
taxpayer'' and all that follows in subparagraph (A) and
inserting a period,
(ii) by striking ``, and the gross receipts of the
taxpayer'' and all that follows in subparagraph (B) and
inserting a period, and
(iii) by striking subparagraph (C).
(D) Paragraph (4) of section 41(d), as so redesignated, is
amended by striking ``and gross receipts''.
(E) Subsection (d) of section 41, as so redesignated, is
amended by striking paragraph (6).
(5) Termination of increased credit for energy research.--
Section 41, as amended by section 1131 of this Act, is
amended by striking subsection (h).
(6) Permanent extension.--Section 41, as amended by section
1131 of this Act, is amended by striking subsection (i).
(7) Cross references.--
(A) Paragraphs (2)(A) and (4) of section 41(b) are each
amended by striking ``subsection (f)(1)'' and inserting
``subsection (d)(1)''.
(B) Paragraph (1) of section 45C(b) is amended by striking
subparagraph (D).
(C) Subsection (c) of section 45C is amended to read as
follows:
``(c) Coordination With Credit for Increasing Research
Expenditures.--Any qualified clinical testing expenses for a
taxable year to which an election under this section applies
shall not be taken into account for purposes of determining
the credit allowable under section 41 for such taxable
year.''.
(D) Paragraph (3) of section 45C(d) is amended by striking
``section 41(f)'' and inserting ``section 41(d)''.
(E) Paragraph (2) of section 45G(e) is amended by striking
``section 41(f)'' and inserting ``section 41(d)''.
(F) Subsection (g) of section 45O is amended by striking
``section 41(f)'' and inserting ``section 41(d)''.
(G) Subparagraph (A) of section 54(l)(3) is amended by
striking ``section 41(g)'' and inserting ``section 41(e)''.
(H) Clause (i) of section 170(e)(4)(B) is amended by
striking ``subparagraph (A) or subparagraph (B) of section
41(e)(6)'' and inserting ``clause (i) or clause (ii) of
section 41(b)(4)(C)''.
(I) Subsection (f) of section 197 is amended by striking
``section 41(f)(1)'' each place it appears in paragraphs
(1)(C) and (9)(C)(i) and inserting ``section 41(d)(1)''.
(J) Section 280C is amended--
(i) by striking ``41(f)'' each place it appears in
subsection (b)(3) and inserting ``41(d)'',
(ii) by striking ``or basic research expenses (as defined
in section 41(e)(2))'' in subsection (c)(1) and inserting
``or basic research payments (as defined in section
41(b)(4)(B))'',
(iii) by striking ``section 41(a)(1)'' in subsection
(c)(2)(A) and inserting ``section 41(a)'', and
(iv) by striking ``or basic research expenses'' in
subsection (c)(2)(B) and inserting ``or basic research
payments''.
(K) Subclause (IV)(c) of section 936(h)(5)(C)(i) is amended
by striking ``section 41(f)'' and inserting ``section
41(d)''.
(L) Subparagraph (D) of section 936(j)(5) is amended by
striking ``section 41(f)(3)'' and inserting ``section
41(d)(3)''.
(M) Clause (i) of section 965(c)(2)(C) is amended by
striking ``section 41(f)(3)'' and inserting ``section
41(d)(3)''.
(N) Subparagraph (C) of section 1202(e)(2) is amended by
striking ``section 41(b)(4)'' and inserting ``section
41(b)(5)''.
(O) Clause (i) of section 1400N(l)(7)(B) is amended by
striking ``section 41(g)'' and inserting ``section 41(e)''.
(c) Technical Corrections.--Section 409 is amended--
(1) by inserting ``, as in effect before the enactment of
the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)''
in subsection (b)(1)(A),
(2) by inserting ``, as in effect before the enactment of
the Tax Reform Act of 1984''

[[Page S1713]]

after ``relating to the employee stock ownership credit'' in
subsection (b)(4),
(3) by inserting ``(as in effect before the enactment of
the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)''
in subsection (i)(1)(A),
(4) by inserting ``(as in effect before the enactment of
the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)''
in subsection (m),
(5) by inserting ``(as so in effect)'' after ``section
48(n)(1)'' in subsection (m),
(6) by inserting ``(as in effect before the enactment of
the Tax Reform Act of 1984)'' after ``section 48(n)'' in
subsection (q)(1), and
(7) by inserting``(as in effect before the enactment of the
Tax Reform Act of 1984)'' after ``section 41'' in subsection
(q)(3).
(d) Effective Date.--
(1) In general.--Except as provided in paragraphs (2) and
(3), the amendments made by this section shall apply to
taxable years beginning after December 31, 2019.
(2) Termination.--The amendments made by paragraphs (1) and
(6) of subsection (b) shall apply to taxable years beginning
after December 31, 2009.
(3) Technical corrections.--The amendments made by
subsection (c) shall take effect on the date of the enactment
of this Act.
On page 435, beginning on line 4, strike through page 441,
line 15.
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