S.Amdt. 3123

SA 3123. Mr. CARPER 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) Enhanced Credit for Highly Innovative Research.--
(1) In general.--Section 41, as amended by this Act, is
amended by adding at the end the following new subsection:
``(j) Enhanced Credit for Highly Innovative Research.--
``(1) In general.--In the case of any qualified research
expenses that are certified highly innovative research
expenses, subsection (a)(1) shall be applied by substituting
`35 percent' for `20 percent'.
``(2) Certified highly innovative research expenses.--For
purposes of this subsection--
``(A) In general.--The term `certified highly innovative
research expenses' means any qualified research expenses
that--
``(i) are paid or incurred during the taxable year for the
creation of--

``(I) a qualified new product category, or
``(II) product technology that represents a significant
improvement over previously existing product technology, and

``(ii) are certified as provided in subparagraph (D).
``(B) Qualified new product category.--The term `qualified
new product category' means a category of product that--
``(i) has not previously been produced by the taxpayer, and
``(ii) incorporates functions that are substantially
different from other products previously produced by the
taxpayer.
``(C) Significant improvement over previously existing
product technology.--Product technology satisfies the
requirements of subparagraph (A)(i)(II) if such technology is
an enhancement of a product that--
``(i) requires the use of new techniques or design methods
to achieve such enhancement, and
``(ii) represents a significant advance in terms of the
performance, energy consumption, environmental benefit,
public health impact, cost, or size of the product.
``(D) Certification by national science foundation or
national institutes of health.--
``(i) In general.--Qualified research expenses shall not be
treated as certified highly innovative research expenses for
any taxable year unless such expenses, and the project to
which they relate, are certified by--

``(I) the National Science Foundation, or
``(II) the National Institutes of Health,

whichever has appropriate jurisdiction over the subject
matter to which such expenses relate, as meeting the
requirements of subparagraph (A)(i) (and any regulations or
guidance issued by the Secretary pursuant to such
subparagraph). Such certification shall be provided by the
National Science Foundation under the program established by
section 111(d)(2) of the EXPIRE Act of 2014, or by the
National Institutes of Health under the program established
by section 111(d)(3) of such Act, whichever is appropriate,
and shall be attached to the return of tax for such taxable
year. In no event shall any taxpayer apply for certification
to more than one of the entities described in this
subparagraph with respect to the same expenses.
``(ii) Advance certification.--

``(I) In general.--The certification of expenses under
clause (i) may be made and provided to the taxpayer not more
than 3 taxable years before the first taxable year for which
the enhanced credit under this subsection will be claimed
with respect to such expenses.
``(II) Reapplication.--The National Science Foundation and
the National Institutes of Health shall each establish and
make publicly available a cap on the number of times a
taxpayer who has been denied certification under clause (i)
with respect to any qualified research expenses may reapply
for certification for such expenses. The cap established by
each such entity shall permit not fewer than 1 reapplication
with respect to any expenses.

``(iii) Duration of certification.--

``(I) In general.--The certification under clause (i) shall
apply to expenses relating to the same project (as identified
in such certification) for not more than 7 consecutive
taxable years, beginning with the first taxable year for
which the enhanced credit under this subsection is claimed
with respect to such expenses.
``(II) Supporting documentation.--In the case of a
certification that applies for more than 1 taxable year, the
Secretary may require the taxpayer to provide such
documentation as the Secretary deems necessary to demonstrate
that the expenses to which such certification relates
continue to meet the requirements of subparagraph (A)(i).

``(iv) Limitation on certifications.--

``(I) In general.--The total dollar amount of expenses
which are certified by each entity under clause (i)
(including by means of advance certification under clause
(ii)) as highly innovative research expenses for purposes of
credits determined in any taxable year shall not exceed
$2,000,000,000.
``(II) Adjustment for inflation.--In the case of a taxable
year beginning after December 31, 2016, the $2,000,000,000
amount in subclause (I) shall be increased by an amount equal
to the product of such dollar amount and the cost-of-living
adjustment determined under section 1(f)(3) for the calendar
year, determined by substituting `calendar year 2015' for
`calendar year 1992' in subparagraph (B) thereof.
``(III) Rounding.--If any amount as adjusted under
subclause (II) is not a multiple of $1,000, such amount shall
be rounded to the next highest multiple of $1,000.''.

(2) Certification by national science foundation as highly
innovative research and promotion of enhanced credit.--The
National Science Foundation Authorization Act of 2002 (Public
Law 107-368) is amended by adding at the end the following:

``SEC. 27. CERTIFICATION AS HIGHLY INNOVATIVE RESEARCH AND
PROMOTION OF ENHANCED CREDIT.

``(a) Certification.--
``(1) In general.--The Director shall establish a program
that provides certification of research expenses as highly
innovative research expenses for purposes of the enhanced
credit for highly innovative research under section 41(j) of
the Internal Revenue Code of 1986.
``(2) Application.--A person that desires to have research
expenses certified as highly innovative research expenses for
purposes of the enhanced credit for highly innovation
research under section 41(j) of the Internal Revenue Code of
1986, shall submit to the Director an application containing
such request at such time, in such manner, and accompanied by
such information as the Director may require.
``(3) Review of submissions.--In carrying out paragraph
(1), the Director shall establish a review process that
involves--
``(A) a set group of reviewers from various fields and
backgrounds, and
``(B) published criteria, developed in consultation with
the Secretary of the Treasury and the Secretary of Commerce,
in accordance with the requirements of section 41(j)(2)(A)(i)
of the Internal Revenue Code of 1986 and any regulations or
guidance issued by the Secretary of the Treasury pursuant to
such section.
``(4) Time for review.--A certification under this
subsection shall be denied or approved within 120 days of the
submission of the application under paragraph (2) (270 days,
in the case of an application for advance certification under
section 41(j)(2)(D)(ii) of the Internal Revenue Code of
1986).
``(b) Promotion of Enhanced Credit for Highly Innovative
Research.--The Director shall post on the website of the
National Science Foundation information on the enhanced
credit for highly innovative research under section 41(j) of
the Internal Revenue Code of 1986, and the process for
applying for certification of research as highly innovative
research.
``(c) Confidentiality.--The Director and each reviewer
described in subsection (a)(3)(A) shall keep confidential any
information provided by a person that desires to have
research expenses certified as highly innovative research
expenses pursuant to this section.''.
(3) Certification by national institutes of health as
highly innovative research and promotion of enhanced
credit.--Part H of title IV of the Public Health Service Act
(42 U.S.C. 289 et seq.) is amended by adding at the end the
following:

``SEC. 498E. CERTIFICATION AS HIGHLY INNOVATIVE RESEARCH AND
PROMOTION OF ENHANCED CREDIT.

``(a) Certification.--
``(1) In general.--The Director of NIH shall establish a
program that provides certification of research expenses as
highly innovative research expenses for purposes of the
enhanced credit for highly innovative research under section
41(j) of the Internal Revenue Code of 1986.
``(2) Application.--A person that desires to have research
expenses certified as highly innovative research expenses for
purposes of the enhanced credit for highly innovative
research under section 41(j) of the Internal Revenue Code of
1986, shall submit to the Director of NIH an application
containing such request at such time, in such manner, and
accompanied by such information as the Director may require.
``(3) Review of submissions.--In carrying out paragraph
(1), the Director shall establish a review process that
involves--
``(A) a set group of reviewers from various fields and
backgrounds, and
``(B) published criteria, developed in consultation with
the Secretary of the Treasury and the Secretary of Commerce,
in accordance with the requirements of section 41(j)(2)(A)(i)
of the Internal Revenue Code of 1986 and any regulations or
guidance issued

[[Page S3094]]

by the Secretary of the Treasury pursuant to such section.
``(4) Time for review.--A certification under this
subsection shall be denied or approved within 120 days of the
submission of the application under paragraph (2) (270 days,
in the case of an application for advance certification under
section 41(j)(2)(D)(ii) of the Internal Revenue Code of
1986).
``(b) Promotion of Enhanced Credit for Highly Innovative
Research.--The Director shall post on the website of the
National Institutes of Health information on the enhanced
credit for highly innovative research under section 41(j) of
the Internal Revenue Code of 1986, and the process for
applying for certification of research as highly innovative
research.
``(c) Confidentiality.--The Director of NIH and each
reviewer described in subsection (a)(3)(A) shall keep
confidential any information provided by a person that
desires to have research expenses certified as highly
innovative research expenses pursuant to this section.''.
(4) Effective date.--The amendment made by paragraph (1)
shall apply to expenses paid or incurred in taxable years
beginning after December 31, 2015.
______