S.Amdt. 1664

SA 1664. Ms. BALDWIN submitted an amendment intended to be proposed
to amendment SA 1618 proposed by Mr. McConnell (for Mr. Hatch (for
himself and Ms. Murkowski)) to the bill H.R. 1, to provide for
reconciliation pursuant to titles II and V of the concurrent resolution
on the budget for fiscal year 2018; which was ordered to lie on the
table; as follows:

At the end of subpart B of part IX of subtitle C of title
I, insert the following:

SEC. 13824. INCREASE OF ALTERNATIVE SIMPLIFIED CREDIT.

(a) In General.--Subparagraph (A) of section 41(c)(5) is
amended by striking ``14 percent (12 percent in the case of
taxable years ending before January 1, 2009)'' and inserting
``20 percent''.
(b) Conforming Amendment.--Clause (ii) of section
41(c)(5)(B) is amended by striking ``6 percent'' and
inserting ``10 percent''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2017.

SEC. 13825. ALLOCATION OF RESEARCH EXPENSES AMONG BUSINESS
COMPONENTS.

(a) In General.--Subparagraph (A) of section 41(d)(2) is
amended by inserting ``, and may be applied using a method
that relies on reasonable estimation techniques in lieu of
contemporaneous accounting to measure employee hours per
business component'' before the period.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2017.

SEC. 13826. INCLUSION OF QUALIFIED UPPER-LEVEL EMPLOYEES IN
RESEARCH EXPENSE CALCULATION.

(a) In General.--Clause (ii) of section 41(b)(2)(B) is
amended by inserting ``, without regard to the employee's
position or management level'' before the period.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2017.

SEC. 13827. REPEAL OF EXCLUSION OF ADAPTIVE RESEARCH.

(a) In General.--Paragraph (4) of section 41(d) is amended
by striking subparagraph (B) and by redesignating
subparagraphs (C), (D), (E), (F), (G), and (H) as
subparagraphs (B), (C), (D), (E), (F), and (G), respectively.
(b) Conforming Amendment.--Section 174(a)(2)(B), as amended
by this Act, is amended by striking ``41(d)(4)(F)'' and
inserting ``41(d)(4)(E)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2017.

SEC. 13828. INCLUSION OF COST REDUCTION RESEARCH.

(a) In General.--Subparagraph (A) of section 41(d)(3) is
amended--
(1) by striking ``or'' at the end of clause (ii),
(2) by striking the period at the end of clause (iii) and
inserting ``, or'', and
(3) by adding at the end the following new clause:
``(iv) reduction of costs associated with--

``(I) a business component of the taxpayer, or
``(II) research relating to a purpose described in clause
(i), (ii), or (iii).''.

(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2017.

SEC. 13829. INCLUSION OF OBSOLESCENCE MITIGATION.

(a) In General.--Clause (iv) of section 41(d)(3)(A), as
added by section 13828, is amended by inserting ``or
obsolescence mitigation'' after ``reduction of costs''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2017.

SEC. 13830. ELECTION OF REDUCED CREDIT MAY BE MADE ON AMENDED
RETURN.

(a) In General.--Subparagraph (C) of section 280C(c)(4), as
redesignated by this Act, is amended to read as follows:
``(C) Election.--An election under this paragraph shall
made in such manner as the Secretary may prescribe and, once
made with respect to a taxable year, shall be irrevocable.
Such election may be made on the return of tax for the
taxable year to which it applies or on an amended return.''.

[[Page S7572]]

(b) Effective Date.--The amendment made by this section
shall apply to amended returns which are permitted to be
filed under the applicable provisions of the Internal Revenue
Code of 1986 after the date of the enactment of this Act.

SEC. 13831. INVESTMENT IN CONNECTED MANUFACTURING EQUIPMENT.

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

``SEC. 45T. CONNECTED MANUFACTURING EQUIPMENT.

``(a) Amount of Credit.--For purposes of section 38, the
connected manufacturing equipment credit for any taxable year
is an amount equal to 10 percent of the qualified connected
manufacturing equipment expenditures made by the taxpayer
during such year.
``(b) Qualified Connected Manufacturing Equipment
Expenditures.--
``(1) In general.--Subject to paragraph (2), for purposes
of this section, the term `qualified connected manufacturing
equipment expenditures' means an expenditure relating to the
purchase or installation of--
``(A) industrial equipment components which contain a
microprocessor and can be connected to an electronic
communication network, and
``(B) any software, routing, or local area network
components necessary to connect components described in
subparagraph (A) to an electronic communication network.
``(2) Eligibility.--The Secretary, in consultation with the
Secretary of Commerce, shall identify the types of components
described in paragraph (1) which are eligible for the credit
under this section.
``(c) Basis Adjustment.--For purposes of this subtitle, if
a credit is allowed under this section for any expenditure
with respect to any property, the increase in the basis of
such property which would (but for this subsection) result
from such expenditure shall be reduced by the amount of the
credit so allowed.''.
(b) Conforming Amendments.--
(1) Section 38(b), as amended by this Act, is amended--
(A) by striking ``plus'' at the end of paragraph (36),
(B) by striking the period at the end of paragraph (37) and
inserting ``, plus'', and
(C) by adding at the end the following new paragraph:
``(38) the connected manufacturing equipment credit
determined under section 45T(a).''.
(2) 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:

``Sec. 45T. Connected manufacturing equipment credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2018.
______