< Back to S. 1203 (111th Congress, 2009–2010)

Text of the Grow Research Opportunities With Taxcredits’ Help Act

This bill was introduced on June 8, 2009, in a previous session of Congress, but was not enacted. The text of the bill below is as of Jun 8, 2009 (Introduced).

Source: GPO

II

111th CONGRESS

1st Session

S. 1203

IN THE SENATE OF THE UNITED STATES

June 8, 2009

(for himself, Mr. Hatch, Mr. Kerry, Mrs. Lincoln, Mr. Wyden, Mr. Schumer, Ms. Cantwell, Mr. Menendez, Mr. Ensign, and Mr. Cornyn) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to extend the research credit through 2010 and to increase and make permanent the alternative simplified research credit, and for other purposes.

1.

Short title; amendment of 1986 Code

(a)

Short title

This Act may be cited as the Grow Research Opportunities With Taxcredits' Help Act or GROWTH Act.

(b)

Amendment of 1986 Code

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

2.

Extension of research credit; increase in alternative simplified research credit

(a)

Extension of credit

(1)

In general

Subparagraph (B) of section 41(h)(1) is amended by striking December 31, 2009 and inserting December 31, 2010.

(2)

Conforming amendment

Subparagraph (D) of section 45C(b)(1) is amended by striking December 31, 2009 and inserting December 31, 2010.

(3)

Effective date

The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2009.

(b)

Alternative simplified research credit increased

(1)

Increased credit

Paragraph (5) of section 41(c) (relating to election of alternative simplified credit) is amended—

(A)

by striking 14 percent (12 percent in the case of taxable years ending before January 1, 2009) in subparagraph (A) and inserting 20 percent, and

(B)

by striking 6 percent in subparagraph (B)(ii) and inserting 10 percent.

(2)

Effective date

The amendment made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.

3.

Modification of research credit after 2010

(a)

Simplified credit for qualified research expenses

Subsection (a) of section 41 is amended to read as follows:

(a)

General rule

(1)

Credit determined

For purposes of section 38, the research credit determined under this section for the taxable year shall be an amount equal to 20 percent of so much of the qualified research expenses for the taxable year as exceeds 50 percent of the average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined.

(2)

Special rule in case of no qualified research expenses in any of 3 preceding taxable years

(A)

Taxpayers to which paragraph applies

The credit under this section shall be determined under this paragraph if the taxpayer has no qualified research expenses in any one of the 3 taxable years preceding the taxable year for which the credit is being determined.

(B)

Credit rate

The credit determined under this paragraph shall be equal to 10 percent of the qualified research expenses for the taxable year.

.

(b)

Conforming amendments

(1)

Termination of base amount calculation

Section 41 is amended by striking subsection (c) and redesignating subsection (d) as subsection (c).

(2)

Termination of basic research payment calculation

Section 41 is amended by striking subsection (e) and redesignating subsections (f) and (g) as subsections (d) and (e), respectively.

(3)

Special rules

(A)

Paragraph (1)(A)(ii) of subsection (d) of section 41, as so redesignated, is amended by striking shares of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, and inserting share of the qualified research expenses.

(B)

Paragraph (1)(B)(ii) of section 41(d), as so redesignated, is amended by striking shares of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, and inserting share of the qualified research expenses.

(C)

Paragraph (3) of section 41(d), as so redesignated, is amended—

(i)

by striking , and the gross receipts of the taxpayer and all that follows in subparagraph (A) and inserting a period,

(ii)

by striking , and the gross receipts of the taxpayer and all that follows in subparagraph (B) and inserting a period, and

(iii)

by striking subparagraph (C).

(D)

Paragraph (4) of section 41(d), as so redesignated, is amended by striking and gross receipts.

(E)

Subsection (d) of section 41, as so redesignated, is amended by striking paragraph (6).

(4)

Permanent extension

(A)

Section 41 is amended by striking subsection (h).

(B)

Paragraph (1) of section 45C(b) is amended by striking subparagraph (D).

(5)

Cross-references

(A)

Paragraphs (2)(A) and (4) of section 41(b) are each amended by striking subsection (f)(1) and inserting subsection (d)(1).

(B)

Paragraph (2) of section 45C(c) is amended by striking base period research expenses and inserting average qualified research expenses.

(C)

Paragraph (3) of section 45C(d) is amended by striking section 41(f) and inserting section 41(d).

(D)

Paragraph (2) of section 45G(e) is amended by striking section 41(f) and inserting section 41(d).

(E)

Subsection (g) of section 45O is amended by striking section 41(f) and inserting section 41(d).

(F)

Subparagraph (A) of section 54(l)(3) is amended by striking section 41(g) and inserting section 41(e).

(G)

Clause (i) of section 170(e)(4)(B) is amended to read as follows:

(i)

the contribution is to a qualified organization,

.

(H)

Paragraph (4) of section 170(e) is amended by adding at the end the following new subparagraph:

(E)

Qualified organization

For purposes of this paragraph, the term qualified organization means—

(i)

any educational organization which—

(I)

is an institution of higher education (within the meaning of section 3304(f)), and

(II)

is described in subsection (b)(1)(A)(ii), or

(ii)

any organization not described in clause (i) which—

(I)

is described in section 501(c)(3) and is exempt from tax under section 501(a),

(II)

is organized and operated primarily to conduct scientific research, and

(III)

is not a private foundation.

.

(I)

Subsection (f) of section 197 is amended by striking section 41(f)(1) each place it appears in paragraphs (1)(C) and (9)(C)(i) and inserting section 41(d)(1).

(J)

Section 280C is amended—

(i)

by striking 41(f) each place it appears in subsection (b)(3) and inserting 41(d),

(ii)

by striking or basic research expenses (as defined in section 41(e)(2)) in subsection (c)(1),

(iii)

by striking section 41(a)(1) in subsection (c)(2)(A) and inserting section 41(a), and

(iv)

by striking or basic research expenses in subsection (c)(2)(B).

(K)

Subclause (IV)(c) of section 936(h)(5)(C)(i) is amended by striking section 41(f) and inserting section 41(d).

(L)

Subparagraph (D) of section 936(j)(5) is amended by striking section 41(f)(3) and inserting section 41(d)(3).

(M)

Clause (i) of section 965(c)(2)(C) is amended by striking section 41(f)(3) and inserting section 41(d)(3).

(N)

Clause (i) of section 1400N(l)(7)(B) is amended by striking section 41(g) and inserting section 41(e).

(c)

Technical corrections

Section 409 is amended—

(1)

by inserting , as in effect before the enactment of the Tax Reform Act of 1984) after section 41(c)(1)(B) in subsection (b)(1)(A),

(2)

by inserting , as in effect before the enactment of the Tax Reform Act of 1984 after relating to the employee stock ownership credit in subsection (b)(4),

(3)

by inserting (as in effect before the enactment of the Tax Reform Act of 1984) after section 41(c)(1)(B) in subsection (i)(1)(A),

(4)

by inserting (as in effect before the enactment of the Tax Reform Act of 1984) after section 41(c)(1)(B) in subsection (m),

(5)

by inserting (as so in effect) after section 48(n)(1) in subsection (m),

(6)

by inserting (as in effect before the enactment of the Tax Reform Act of 1984) after section 48(n) in subsection (q)(1), and

(7)

by inserting (as in effect before the enactment of the Tax Reform Act of 1984) after section 41 in subsection (q)(3).

(d)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2010.

(2)

Technical corrections

The amendments made by subsection (c) shall take effect on the date of the enactment of this Act.