S.Amdt. 3215

1. Adds TITLE _--INNOVATE AMERICA at the end of the bill

   Adds a title

   In H.R. 3474 · Placed on Calendar Senate

   Passed the House of Representatives March 11, 2014.

   Inserted: TITLE _--INNOVATE AMERICA

   Inserted: SEC. _01. FINDINGS.

   Inserted: Congress finds the following:

   Inserted: (1) Innovation has historically been a catalyzing force in the American economy, driving the production of game-changing technologies, the creation of millions of jobs and the opening of countless new avenues for growth. In an increasingly competitive global economy, our Nation's continued leadership and prosperity will hinge on progress in key innovative areas, most notably exporting, entrepreneurship, research and development, and education in science, technology, engineering, and mathematics (STEM), including computer science.

   Inserted: (2) Technology-based startups play a critical role in driving innovation. Increasing the flow of capital to these firms would bridge the gap that often exists between their initial startup costs and their long-term capital needs, giving the firms the resources necessary to research, develop, and commercialize new products.

   Inserted: (3) Simplifying, expanding, and stabilizing the tax credits that businesses and institutions of higher education rely on to offset the cost of research and would promote greater clarity in the Internal Revenue Code of 1986 and deliver a powerful incentive for private sector innovation.

   Inserted: (4) Increasing the emphasis on STEM education in high schools and institutions of higher education would ensure that more students have the skills and training to not only compete for jobs in a 21st century economy, but also to create the startup companies and revolutionary technologies that will sustain American prosperity for centuries to come.

   Inserted: (5) The United States Bureau of Labor Statistics predicts that in the year 2020, of the 9,200,000 "STEM" jobs there will be in the United States, half of them will be in computing. With more than 150,000 job openings expected annually in computing, it is one of the fastest growing occupations in the United States. Increasing the teaching and learning of computer science in schools would strengthen the American workforce by helping our students gain the skills and training necessary to fulfill new computer programming jobs.

   Inserted: (6) An effective regulatory climate should protect consumers and promote transparency without overburdening the businesses that create jobs. Federal agencies with rulemaking authority should be vigilant in assessing the impact of new regulations on innovation and job creation, particularly in anchor industries like manufacturing.

   Inserted: (7) The economic impact of a new product or technology is often dependent on its commercial success. To ensure American products can be bought and sold in markets around the world, the government should identify and remove over burdensome regulations that create barriers for United States exporting companies.

   Inserted: SEC. _02. SIMPLIFICATION OF TAX CREDIT FOR CONTRIBUTIONS TO UNIVERSITIES FOR RESEARCH AND DEVELOPMENT PURPOSES.

   Inserted: (a) In General.--Subparagraph (A) of section 41(e)(7) is amended by striking "not having a specific commercial objective".

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   Inserted: (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

   Inserted: SEC. _03. CREDIT FOR CHARITABLE CONTRIBUTIONS OF EQUIPMENT TO SECONDARY SCHOOLS AND TECHNICAL AND COMMUNITY COLLEGES.

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

   Inserted: "SEC. 45S. CREDIT FOR CHARITABLE CONTRIBUTIONS OF EQUIPMENT TO SECONDARY SCHOOLS AND TECHNICAL AND COMMUNITY COLLEGES.

   Inserted: "(a) In General.--For purposes of section 38, the charitable equipment contribution credit determined under this section for any taxable year is an amount equal to 30 percent of the fair market value (determined at the time of the contribution) of any qualified equipment which is contributed by the taxpayer to a secondary school, technical college, or community college.

   Inserted: "(b) Qualified Equipment.--For purposes of this section, the term 'qualified equipment' means any tangible personal property described in paragraph (1) of section 1221(a), but only if--

   Inserted: "(1) the property is purchased, constructed, or assembled by the taxpayer,

   Inserted: "(2) the property is equipment or apparatus substantially all of the use of which by the donee is for research or experimentation, research training, or education in science or technology,

   Inserted: "(3) the property is suitable for use in the donee's research or experimentation or educational programs,

   Inserted: "(4) the property is not transferred by the donee in exchange for money, other property, or services, and

   Inserted: "(5) the taxpayer receives from the donee a written statement representing that its use and disposition of the property will be in accordance with the provisions of paragraphs (2), (3), and (4).

   Inserted: "(c) Gain Not Taken Into Account.--The amount of any contribution of qualified equipment otherwise taken into account under subsection (a) shall be reduced, but not below zero, by the sum of--

   Inserted: "(1) \1/2\ of the amount of any gain which would not have been long-term capital gain (determined without regard to section 1221(b)(3)) if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of such contribution), and

   Inserted: "(2) the amount, if any, by which the amount of such contribution (determined by taking into account paragraph (1) but without regard to this paragraph) exceeds twice the taxpayer's basis in the qualified equipment.

   Inserted: "(d) Definitions.--For purposes of this section--

   Inserted: "(1) Secondary school.--The term 'secondary school' has the meaning given such term by section 9101 of the Elementary and Secondary Education Act of 1965.

   Inserted: "(2) Technical college.--The term 'technical college' means a postsecondary vocational institution (as defined in section 102(c) of the Higher Education Act of 1965).

   Inserted: "(3) Community college.--The term 'community college' means a junior or community college (as defined in section 312 of the Higher Education Act of 1965).

   Inserted: "(e) Denial of Double Benefit.--No deduction shall be allowed under section 170 for any contribution for which a credit is allowed under this section.".

   Inserted: (b) Credit Treated as Part of General Business Credit.--Section 38(b), as amended by this Act, is amended--

   Inserted: (1) by striking "plus" at the end of paragraph (36),

   Inserted: (2) by striking the period at the end of paragraph (37) and inserting ", plus", and

   Inserted: (3) by adding at the end the following new paragraph:

   Inserted: "(38) the charitable equipment contribution credit determined under section 45S(a).".

   Inserted: (c) Clerical Amendment.--The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

   Inserted: "Sec. 45S. Credit for charitable contributions of equipment to secondary schools and technical and community colleges.".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to contributions made after the date that is 30 days after the date of the enactment of this Act.

   Inserted: SEC. _04. TAX CREDIT FOR COLLABORATIVE RESEARCH AND DEVELOPMENT.

   Inserted: (a) In General.--Paragraph (3) of section 41(a) is amended by striking "to an energy research consortium for energy research" and inserting "to a qualified collaborative research partner for qualified research".

   Inserted: (b) Definition.--Paragraph (6) of section 41(f) is amended to read as follows:

   Inserted: "(6) Qualified collaborative research partner.--

   Inserted: "(A) In general.--The term 'qualified collaborative research partner' means--

   Inserted: "(i) a collaborative research consortium,

   Inserted: "(ii) an institution of higher education (as defined in section 3304(f)), or

   Inserted: "(iii) an organization which is a Federal laboratory (as defined in section 4(6) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3703(6)), as in effect on the date of the enactment of the Energy Tax Incentives Act of 2005).

   Inserted: "(B) Collaborative research consortium.--The term 'collaborative research consortium' means any organization--

   Inserted: "(i) which is--

   Inserted: "(I) described in section 501(c)(3) and is exempt from tax under section 501(a) and is organized and operated primarily to conduct scientific research, or

   Inserted: "(II) organized and operated primarily to conduct scientific research in the public interest (within the meaning of section 501(c)(3)),

   Inserted: "(ii) which is not a private foundation,

   Inserted: "(iii) to which at least 5 unrelated persons paid or incurred during the calendar year in which the taxable year of the organization begins amounts (including as contributions) to such organization for qualified research, and

   Inserted: "(iv) to which no single person paid or incurred (including as contributions) during such calendar year an amount equal to more than 50 percent of the total amounts received by such organization during such calendar year for qualified research.

   Inserted: "(C) Treatment of persons.--All persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as related persons for purposes of subparagraph (B)(iii) and as a single person for purposes of subparagraph (B)(iv).

   Inserted: "(D) Foreign research.--For purposes of subsection (a)(3), amounts paid or incurred for any research conducted outside the United States, the Commonwealth of Puerto Rico, or any possession of the United States shall not be taken into account.

   Inserted: "(E) Denial of double benefit.--Any amount taken into account under subsection (a)(3) shall not be taken into account under paragraph (1) or (2) of subsection (a).".

   Inserted: (c) Conforming Amendments.--

   Inserted: (1) Subparagraph (D) of section 41(b)(3) is amended to read as follows:

   Inserted: "(D) Amounts paid to eligible small businesses.--

   Inserted: "(i) In general.--In the case of amounts paid by the taxpayer to an eligible small business for qualified research, subparagraph (A) shall be applied by substituting '100 percent' for '65 percent'.

   Inserted: "(ii) Eligible small business.--For purposes of this subparagraph, the term 'eligible small business' means a small business with respect to which the taxpayer does not own (within the meaning of section 318) 50 percent or more of--

   Inserted: "(I) in the case of a corporation, the outstanding stock of the corporation (either by vote or value), and

   Inserted: "(II) in the case of a small business which is not a corporation, the capital and profits interests of the small business.

   Inserted: "(iii) Small business.--For purposes of this subparagraph--

   Inserted: "(I) In general.--The term 'small business' means, with respect to any calendar year, any person if the annual average number of employees employed by such person during either of the 2 preceding calendar years was 500 or fewer. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the person was in existence throughout the year.

   Inserted: "(II) Startups, controlled groups, and predecessors.--Rules similar to the rules of subparagraphs (B) and (D) of section 220(c)(4) shall apply for purposes of this clause.".

   Inserted: (2) Subparagraphs (A)(ii) and (B)(ii) of section 41(f)(1) are each amended by striking "energy research consortiums" and inserting "qualified collaborative research partners".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

   Original wording

   At the end, add the following:

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As printed