H.R. 3757 – Reading Mode

113th CONGRESS

1st Session

H. R. 3757

IN THE HOUSE OF REPRESENTATIVES

December 12, 2013

Mr. Peters of California (for himself, Mr. Honda, Ms. DelBene, Mr. Murphy of Florida, and Ms. Lofgren) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to extend the research credit one year, to increase and make permanent the alternative simplified research credit, and to provide a 20 percent credit for payments to biotechnology research consortiums for biotechnology research.

Short title

This Act may be cited as the Igniting American Research Act.

1-Year extension of research credit; alternative simplified research credit increased and made permanent

(a)

1-Year extension of credit

(1)

In general

Subparagraph (B) of section 41(h)(1) of the Internal Revenue Code of 1986 is amended by striking December 31, 2013 and inserting December 31, 2014.

(2)

Conforming amendment

Subparagraph (D) of section 45C(b)(1) of such Code is amended by striking December 31, 2013 and inserting December 31, 2014.

(3)

Effective date

The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2013.

(b)

Alternative simplified research credit increased and made permanent

(1)

Increased credit

Subparagraph (A) of section 41(c)(5) of such Code (relating to election of alternative simplified credit) is amended by striking 14 percent (12 percent in the case of taxable years ending before January 1, 2009) and inserting 20 percent.

(2)

Credit made permanent

(A)

In general

Subsection (h) of section 41 of such Code is amended by redesignating the paragraph (2) relating to computation of taxable year in which credit terminates as paragraph (4) and by inserting before such paragraph the following new paragraph:

(3)

Termination not to apply to alternative simplified credit

Paragraph (1) shall not apply to the credit determined under subsection (c)(5).

(B)

Conforming amendment

Paragraph (4) of section 41(h) of such Code, as redesignated by subparagraph (A), is amended to read as follows:

(4)

Computation for taxable year in which credit terminates

In the case of any taxable year with respect to which this section applies to a number of days which is less than the total number of days in such taxable year, the amount determined under subsection (c)(1)(B) with respect to such taxable year shall be the amount which bears the same ratio to such amount (determined without regard to this paragraph) as the number of days in such taxable year to which this section applies bears to the total number of days in such taxable year.

(3)

Effective date

The amendments made by this subsection shall apply to taxable years ending after December 31, 2013.

Biotechnology research

(a)

20 percent credit for payments to biotechnology research consortium for biotechnology research

(1)

In general

Section 41(a)(3) of the Internal Revenue Code of 1986 is amended by inserting or a biotechnology research consortium for biotechnology research before the period at the end.

(2)

Limitation

Section 41(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following flush sentence: The amounts taken into account for purposes of paragraph (3) for a taxable year may not exceed the greater of 20 percent of the amounts paid or incurred by the taxpayer during the taxable year (including as contributions) to an energy research consortium for energy research or 20 percent of the amounts paid or incurred by the taxpayer during the taxable year (including as contributions) to a biotechnology research consortium for biotechnology research..

(b)

Biotechnology contract research expenses

Section 41(b)(3)(D)(i) of the Internal Revenue Code of 1986 is amended by striking energy research and inserting energy or biotechnology research.

(c)

Special rules

Subparagraphs (A)(ii) and (B)(ii) of section 41(f)(1) of the Internal Revenue Code of 1986 are both amended by striking consortiums, and inserting consortiums and to biotechnology research consortiums,.

(d)

Biotechnology research consortium defined

Section 41(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(7)

Biotechnology research consortium

(A)

In general

The term biotechnology research consortium means any organization—

(i)

which is—

(I)

described in section 501(c)(3) and is exempt from tax under section 501(a) and is organized and operated primarily to conduct biotechnology research, or

(II)

organized and operated primarily to conduct biotechnology research in the public interest (within the meaning of section 501(c)(3)),

(ii)

which is not a private foundation,

(iii)

to which at least 3 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 biotechnology research, and

(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 biotechnology research.

(B)

Applicable rules

For purposes of subparagraph (A), rules similar to the rules of subparagraphs (B), (C) (applied by substituting biotechnology for research), and (D) of paragraph (6) shall apply.

(C)

Biotechnology research

The term biotechnology research does not include—

(i)

any research which is not qualified research, and

(ii)

any research which is energy research.

(e)

Energy research consortium

Section 41(f)(A)(iii) of the Internal Revenue Code of 1986 is amended by striking 5 unrelated persons and inserting 3 unrelated persons.

(f)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2013.