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Text of the AGREE Act

This bill was introduced on November 18, 2011, in a previous session of Congress, but was not enacted. The text of the bill below is as of Nov 18, 2011 (Introduced).

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I

112th CONGRESS

1st Session

H. R. 3476

IN THE HOUSE OF REPRESENTATIVES

November 18, 2011

(for himself and Mr. Keating) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on the Judiciary and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide incentives for economic growth, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the American Growth, Recovery, Empowerment, and Entrepreneurship Act or the AGREE Act.

(b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—Extending tax relief for small businesses

Sec. 101. Extension of bonus depreciation; temporary 100 percent expensing for certain business assets.

Sec. 102. Extension of increased expensing limitations and treatment of certain real property as section 179 property.

Sec. 103. Temporary exclusion of 100 percent of gain on certain small business stock.

TITLE II—Encouraging cutting-edge research and innovation

Sec. 201. Extension of research credit; alternative simplified research credit increased and made permanent.

Sec. 202. Enhanced research credit for domestic manufacturers.

TITLE III—Providing common-sense tax incentives for veterans

Sec. 301. Veterans franchise fee credit.

Sec. 302. Publication of information by Department of Veterans Affairs and Small Business Administration.

TITLE IV—Regulatory relief for small companies

Sec. 401. Exemption from the internal control reporting and assessment requirements.

TITLE V—Reducing barriers to high-skilled legal immigration

Sec. 501. Numerical limitation to any single foreign state.

TITLE VI—Protecting American business against illegal counterfeiting

Sec. 601. Preventing the importation of counterfeit products and infringing devices.

I

Extending tax relief for small businesses

101.

Extension of bonus depreciation; temporary 100 percent expensing for certain business assets

(a)

In general

Paragraph (2) of section 168(k) of the Internal Revenue Code of 1986 is amended—

(1)

by striking January 1, 2014 in subparagraph (A)(iv) and inserting January 1, 2016, and

(2)

by striking January 1, 2013 each place it appears and inserting January 1, 2015.

(b)

Temporary 100 percent expensing

Paragraph (5) of section 168(k) of the Internal Revenue Code of 1986 is amended—

(1)

by striking 2013 and inserting 2016, and

(2)

by striking 2012 each place it appears in the text and heading and inserting 2015.

(c)

Extension of election To accelerate the AMT credit in lieu of bonus depreciation

(1)

In general

Subclause (II) of section 168(k)(4)(D)(iii) of the Internal Revenue Code of 1986 is amended by striking 2013 and inserting 2015.

(2)

Round 3 extension property

Paragraph (4) of section 168(k) of such Code is amended by adding at the end the following new subparagraph:

(J)

Special rules for round 3 extension property

(i)

In general

In the case of round 3 extension property, this paragraph shall be applied without regard to—

(I)

the limitation described in subparagraph (B)(i) thereof, and

(II)

the business credit increase amount under subparagraph (E)(iii) thereof.

(ii)

Taxpayers previously electing acceleration

In the case of a taxpayer who made the election under subparagraph (A) for its first taxable year ending after March 31, 2008, a taxpayer who made the election under subparagraph (H)(ii) for its first taxable year ending after December 31, 2008, or a taxpayer who made the election under subparagraph (I)(iii) for its first taxable year ending after December 31, 2010—

(I)

the taxpayer may elect not to have this paragraph apply to round 3 extension property, but

(II)

if the taxpayer does not make the election under subclause (I), in applying this paragraph to the taxpayer the bonus depreciation amount, maximum amount, and maximum increase amount shall be computed and applied to eligible qualified property which is round 3 extension property.

The amounts described in subclause (II) shall be computed separately from any amounts computed with respect to eligible qualified property which is not round 2 extension property.
(iii)

Taxpayers not previously electing acceleration

In the case of a taxpayer who neither made the election under subparagraph (A) for its first taxable year ending after March 31, 2008, nor made the election under subparagraph (H)(ii) for its first taxable year ending after December 31, 2008, nor made the election under subparagraph (I)(iii) for its first taxable year ending after December 31, 2010—

(I)

the taxpayer may elect to have this paragraph apply to its first taxable year ending after December 31, 2011, and each subsequent taxable year, and

(II)

if the taxpayer makes the election under subclause (I), this paragraph shall only apply to eligible qualified property which is round 3 extension property.

(iv)

Round 3 extension property

For purposes of this subparagraph, the term round 3 extension property means property which is eligible qualified property solely by reason of the extension of the application of the special allowance under paragraph (1) pursuant to the amendments made by section 101(a) of the American Growth, Recovery, Empowerment, and Entrepreneurship Act (and the application of such extension to this paragraph pursuant to the amendment made by section 101(c)(1) of such Act).

.

(d)

Conforming amendments

(1)

The heading for subsection (k) of section 168 of the Internal Revenue Code of 1986 is amended by striking January 1, 2013 and inserting January 1, 2016.

(2)

The heading for clause (ii) of section 168(k)(2)(B) of such Code is amended by striking pre-January 1, 2013 and inserting pre-January 1, 2016.

(3)

Paragraph (5) of section 168(l) of such Code is amended—

(A)

by striking and at the end of subparagraph (A),

(B)

by redesignating subparagraph (C) as subparagraph (B), and

(C)

by inserting after subparagraph (A) the following new subparagraph:

(B)

by substituting January 1, 2013 for January 1, 2016 in clause (i) thereof, and

.

(4)

Subparagraph (C) of section 168(n)(2) of such Code is amended by striking January 1, 2013 and inserting January 1, 2016.

(5)

Subparagraph (D) of section 1400L(b)(2) of such Code is amended by striking January 1, 2013 and inserting January 1, 2016.

(6)

Subparagraph (B) of section 1400N(d)(3) of such Code is amended by striking January 1, 2013 and inserting January 1, 2016.

(e)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2011, in taxable years ending after such date.

102.

Extension of increased expensing limitations and treatment of certain real property as section 179 property

(a)

In general

Section 179(b) of the Internal Revenue Code of 1986 is amended—

(1)

by striking 2010 or 2011 each place it appears in paragraph (1)(B) and (2)(B) and inserting 2010, 2011, 2012, 2013, or 2014,

(2)

by striking 2012 each place it appears in paragraph (1)(C) and (2)(C) and inserting 2015, and

(3)

by striking 2012 each place it appears in paragraph (1)(D) and (2)(D) and inserting 2015.

(b)

Inflation adjustment

Subparagraph (A) of section 179(b)(6) of the Internal Revenue Code of 1986 is amended by striking 2012 and inserting 2015.

(c)

Computer software

Section 179(d)(1)(A)(ii) of the Internal Revenue Code of 1986 is amended by striking 2013 and inserting 2016.

(d)

Election

Section 179(c)(2) of the Internal Revenue Code of 1986 is amended by striking 2013 and inserting 2016.

(e)

Special rules for treatment of qualified real property

Section 179(f)(1) of the Internal Revenue Code of 1986 is amended by striking 2010 or 2011 and inserting 2010, 2011, 2012, 2013, or 2014.

(f)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2011.

103.

Temporary exclusion of 100 percent of gain on certain small business stock

(a)

In general

Paragraph (4) of section 1202(a) of the Internal Revenue Code of 1986 is amended—

(1)

by striking January 1, 2012 and inserting January 1, 2015, and

(2)

by striking and 2011 in the heading thereof and inserting , 2011, 2012, 2013, and 2014.

(b)

Effective date

The amendments made by this section shall apply to stock acquired after December 31, 2011.

II

Encouraging cutting-edge research and innovation

201.

Extension of research credit; alternative simplified research credit increased and made permanent

(a)

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, 2011 and inserting December 31, 2012.

(2)

Conforming amendment

Subparagraph (D) of section 45C(b)(1) of such Code is amended by striking December 31, 2011 and inserting December 31, 2012.

(3)

Effective date

The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2011.

(b)

Alternative simplified research credit increased and made permanent

(1)

Increased credit

Subparagraph (A) of section 41(c)(5) of the Internal Revenue Code of 1986 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, 2010.

202.

Enhanced research credit for domestic manufacturers

(a)

In general

Section 41, as amended by section 201, of the Internal Revenue Code of 1986 is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (f) the following new subsection:

(g)

Enhanced credit for domestic manufacturers

(1)

In general

In the case of a qualified domestic manufacturer, this section shall be applied by increasing the 20 percent amount in subsection (a)(1) by the bonus amount.

(2)

Qualified domestic manufacturer

For purposes of this subsection—

(A)

In general

The term qualified domestic manufacturer means a taxpayer who has domestic production gross receipts which are more than 50 percent of total production gross receipts.

(B)

Domestic production gross receipts

The term domestic production gross receipts has the meaning given to such term under section 199(c)(4).

(C)

Total production gross receipts

The term total production gross receipts means the gross receipts of the taxpayer which are described in section 199(c)(4), determined—

(i)

without regard to whether property described in subparagraph (A)(i)(I) or (A)(i)(III) thereof was manufactured, produced, grown, or extracted in the United States,

(ii)

by substituting any property described in section 168(f)(3) for any qualified film in subparagraph (A)(i)(II) thereof, and

(iii)

without regard to whether any construction described in subparagraph (A)(ii) thereof or services described in subparagraph (A)(iii) thereof were performed in the United States.

(3)

Bonus amount

For purposes of paragraph (1), the bonus amount shall be determined as follows:

If the percentage of total production gross receipts which are domestic production gross receipts is:The bonus amount is:
More than 50 percent and not more than 60 percent2 percentage points
More than 60 percent and not more than 70 percent4 percentage points
More than 70 percent and not more than 80 percent6 percentage points
More than 80 percent and not more than 90 percent8 percentage points
More than 90 percent10 percentage points.

.

(b)

Effective date

The amendment made by this section shall apply to expenditures paid or incurred in taxable years beginning after December 31, 2011.

III

Providing common-sense tax incentives for veterans

301.

Veterans franchise fee credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45S.

Veterans franchise fee credit

(a)

Veterans franchise fee credit

(1)

In general

For purposes of section 38, the veterans franchise fee credit determined under this section for the taxable year is an amount equal to 25 percent of the qualified franchise fees paid or incurred by a veteran during the taxable year.

(2)

Limitation

The amount allowed as a credit under paragraph (1) with respect to the purchase of any franchise shall not exceed $100,000.

(b)

Reduction where franchise not 100 percent veteran-Owned

In the case of any franchise in which veterans do not own 100 percent of the stock or of the capital or profits interests of the franchise, the credit under subsection (a) shall be the credit amount determined under such subsection, multiplied by the same ratio as—

(1)

the stock or capital or profits interests of the franchise held by veterans, bears

(2)

to the total stock or capital or profits interests of the franchise.

For purposes of this subsection, the spouse of a veteran shall be treated as a veteran.
(c)

Qualified franchise fee

For purposes of this section, the term qualified franchise fee means any one-time fee required by the franchisor when entering into a franchise agreement with a veteran as the franchisee.

(d)

Other definitions

For purposes of this section, the terms franchise, franchisee, franchisor, and franchise fee have the meanings given such terms in part 436 of title 16, Code of Federal Regulations (as in effect on January 1, 2009).

(e)

Veteran

The term veteran has the meaning given such term by section 101 of title 38, United States Code.

(f)

Election

This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.

.

(b)

Credit To be part of general business credit

Section 38(b) of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph:

(37)

the veterans franchise fee credit determined under section 45S(a).

.

(c)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Sec. 45S. Veterans franchise fee credit.

.

(d)

Effective date

The amendments made by this section shall apply to taxable years ending after December 31, 2010.

302.

Publication of information by Department of Veterans Affairs and Small Business Administration

The Administrator of the Small Business Administration and the Secretary of Veterans Affairs shall publicize in mailings and brochures sent to veterans service organizations and veteran advocacy groups information regarding discounted franchise fees under section 45S of the Internal Revenue Code of 1986 and other information about the program established under amendments made by this Act.

IV

Regulatory relief for small companies

401.

Exemption from the internal control reporting and assessment requirements

(a)

In general

Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262) is amended by adding at the end the following:

(d)

Exemption

Subsection (b) shall not apply to any issuer until the earlier of—

(1)

such time as the issuer has total revenues of $250,000,000; and

(2)

the expiration of the 5-year period beginning on the date of the initial public offering of that issuer.

.

(b)

Study and report

(1)

Study

The Securities and Exchange Commission shall conduct a study—

(A)

to determine how the Commission could reduce the burden of complying with section 404(b) of the Sarbanes-Oxley Act of 2002 for companies, the market capitalization of which is between $250,000,000 and $1,000,000,000 for the relevant reporting period while maintaining investor protections for such companies; and

(B)

to assess the annual cost of compliance with that section 404(b) for all companies whose market capitalization is less than or equal to $1,000,000,000.

(2)

Report

The Securities and Exchange Commission shall submit a report to Congress on the results of the study conducted under paragraph (1) not later than 9 months after the date of enactment of this Act.

V

Reducing barriers to high-skilled legal immigration

501.

Numerical limitation to any single foreign state

(a)

In general

Section 202(a)(2) of the Immigration and Nationality Act (8 U.S.C. 1152(a)(2)) is amended—

(1)

in the paragraph heading, by striking and employment-based;

(2)

by striking (3), (4), and (5), and inserting (3) and (4),;

(3)

by striking subsections (a) and (b) of section 203 and inserting section 203(a);

(4)

by striking 7 and inserting 15; and

(5)

by striking such subsections and inserting such section.

(b)

Conforming amendments

Section 202 of the Immigration and Nationality Act (8 U.S.C. 1152) is amended—

(1)

in subsection (a)(3), by striking both subsections (a) and (b) of section 203 and inserting section 203(a);

(2)

by striking subsection (a)(5); and

(3)

by amending subsection (e) to read as follows:

(e)

Special rules for countries at ceiling

If it is determined that the total number of immigrant visas made available under section 203(a) to natives of any single foreign state or dependent area will exceed the numerical limitation specified in subsection (a)(2) in any fiscal year, in determining the allotment of immigrant visa numbers to natives under section 203(a), visa numbers with respect to natives of that state or area shall be allocated (to the extent practicable and otherwise consistent with this section and section 203) in a manner so that, except as provided in subsection (a)(4), the proportion of the visa numbers made available under each of paragraphs (1) through (4) of section 203(a) is equal to the ratio of the total number of visas made available under the respective paragraph to the total number of visas made available under section 203(a).

.

(c)

Country-Specific offset

Section 2 of the Chinese Student Protection Act of 1992 (8 U.S.C. 1255 note) is amended—

(1)

in subsection (a), by striking subsection (e)) and inserting subsection (d)); and

(2)

by striking subsection (d) and redesignating subsection (e) as subsection (d).

(d)

Effective date

The amendments made by this section shall take effect as if enacted on September 30, 2011, and shall apply to fiscal years beginning with fiscal year 2012.

(e)

Transition rules for employment-Based immigrants

(1)

In general

Subject to the succeeding paragraphs of this subsection and notwithstanding title II of the Immigration and Nationality Act (8 U.S.C. 1151 et seq.), the following rules shall apply:

(A)

For fiscal year 2012, 15 percent of the immigrant visas made available under each of paragraphs (2) and (3) of section 203(b) of such Act (8 U.S.C. 1153(b)) shall be allotted to immigrants who are natives of a foreign state or dependent area that was not one of the two states with the largest aggregate numbers of natives obtaining immigrant visas during fiscal year 2010 under such paragraphs.

(B)

For fiscal year 2013, 10 percent of the immigrant visas made available under each of such paragraphs shall be allotted to immigrants who are natives of a foreign state or dependent area that was not one of the two states with the largest aggregate numbers of natives obtaining immigrant visas during fiscal year 2011 under such paragraphs.

(C)

For fiscal year 2014, 10 percent of the immigrant visas made available under each of such paragraphs shall be allotted to immigrants who are natives of a foreign state or dependent area that was not one of the two states with the largest aggregate numbers of natives obtaining immigrant visas during fiscal year 2012 under such paragraphs.

(2)

Per-country levels

(A)

Reserved visas

With respect to the visas reserved under each of subparagraphs (A) through (C) of paragraph (1), the number of such visas made available to natives of any single foreign state or dependent area in the appropriate fiscal year may not exceed 25 percent (in the case of a single foreign state) or 2 percent (in the case of a dependent area) of the total number of such visas.

(B)

Unreserved visas

With respect to the immigrant visas made available under each of paragraphs (2) and (3) of section 203(b) of such Act (8 U.S.C. 1153(b)) and not reserved under paragraph (1), for each of fiscal years 2012, 2013, and 2014, not more than 85 percent shall be allotted to immigrants who are natives of any single foreign state.

(3)

Special rule to prevent unused visas

If, with respect to fiscal year 2012, 2013, or 2014, the operation of paragraphs (1) and (2) of this subsection would prevent the total number of immigrant visas made available under paragraph (2) or (3) of section 203(b) of such Act (8 U.S.C. 1153(b)) from being issued, such visas may be issued during the remainder of such fiscal year without regard to paragraphs (1) and (2) of this subsection.

(4)

Rules for chargeability

Section 202(b) of such Act (8 U.S.C. 1152(b)) shall apply in determining the foreign state to which an alien is chargeable for purposes of this subsection.

VI

Protecting American business against illegal counterfeiting

601.

Preventing the importation of counterfeit products and infringing devices

Notwithstanding section 1905 of title 18, United States Code—

(1)

if United States Customs and Border Protection suspects a product of being imported or exported in violation of section 42 of the Act entitled An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes, approved July 5, 1946 (commonly referred to as the Trademark Act of 1946) (15 U.S.C. 1124), and subject to any applicable bonding requirements, the Secretary of Homeland Security is authorized to share information on, and unredacted samples of, products and their packaging and labels, or photos of such products, packaging and labels, with the rightholders of the trademark suspected of being copied or simulated, for purposes of determining whether the products are prohibited from importation under that section; and

(2)

upon seizure of material by United States Customs and Border Protection imported in violation of subsection (a)(2) or subsection (b) of section 1201 of title 17, United States Code, the Secretary of Homeland Security is authorized to share information about, and provide samples to affected parties, subject to any applicable bonding requirements, as to the seizure of material designed to circumvent technological measures or protection afforded by a technological measure that controls access to or protects the owner's work protected by copyright under such title.