S.Amdt. 1693

SA 1693. Mr. CARPER submitted an amendment intended to be proposed by
him 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. SPLIT 100 PERCENT RESEARCH CREDIT FOR CONTRACT
RESEARCH EXPENSES.

(a) In General.--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 subsection (e)(6)) 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) Limitation.--The qualified research expenses of a
taxpayer shall not include any expenses that would not be
eligible as in-house research expenses for purposes of
paragraph (2).

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