S.Amdt. 3120

SA 3120. Mr. CARPER (for himself and Mrs. Hagan) submitted an
amendment intended to be proposed to amendment SA 3060 proposed by Mr.
Wyden to the bill H.R. 3474, to amend the Internal Revenue Code of 1986
to allow employers to exempt employees with health coverage under
TRICARE or the Veterans Administration from being taken into account
for purposes of the employer mandate under the Patient Protection and
Affordable Care Act; which was ordered to lie on the table; as follows:

On page 18, between lines 17 and 18, insert the following:
(d) Split 100 Percent Credit for Contract Research
Expenses.--Subparagraph (A) of section 41(b)(3) is amended to
read as follows:
``(A) In general.--
``(i) Taxpayers paying for contracted research.--The term
`contract research expenses' means 65 percent of any amount
paid or incurred by the taxpayer to any person (other than an
employee of the taxpayer) for qualified research.
``(ii) Taxpayers performing contracted research.--In the
case of a taxpayer (other than an entity described in
subparagraph (C) or (D) or paragraph (5)(C)) who receives
amounts from any person (other than an employer of the
taxpayer) for qualified research on behalf of such person,
the term `contract research expenses' means so much of the
qualified research expenses paid or incurred by the taxpayer
as does not exceed 35 percent of the amounts so received from
such person.
``(iii) Special rules.--For purposes of clause (ii)--

``(I) Trade or business.--The qualified research expenses
of the taxpayer shall be determined as if the trade or
business of the taxpayer were the conduct of qualified
research on behalf of other persons.
``(II) Research not treated as funded research.--
Subparagraph (H) of subsection (d)(4) shall not apply.
``(III) Qualified research.--The qualified research
expenses of a taxpayer shall be determined as if the
conditions of subparagraph (B) of subsection (d)(1) are
satisfied if the business component described in subparagraph
(B)(ii) thereof is a business component of either of the
taxpayers described in clauses (i) and (ii).

``(iv) Denial of double benefit.--The amount of any in-
house research expenses taken into account under this section
with respect to a taxpayer described in clause (ii) shall be
reduced by the amount of the contract research expenses taken
into account under such clause with respect to such taxpayer
for the taxable year.''.
(e) Inclusion of Basic Research Payments.--Subsection (b)
of section 41 is amended by redesignating paragraph (5), as
added by this section, as paragraph (6), and by inserting
after paragraph (4) the following new paragraph:
``(5) Basic research payments.--In the case of basic
research payments (as defined in subsection (e)(2)) made by
the taxpayer, paragraph (3)(A) shall be applied by
substituting `100 percent' for `65 percent'.''.
(f) Effective Date.--The amendments made by subsections (d)
and (e) shall apply to taxable years beginning after December
31, 2014.
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