I 

113TH CONGRESS 

1ST SESSION H. R. 3537 

To amend the Internal Revenue Code of 1986 to make permanent the credit 

for increasing research activities, to increase such credit for amounts 

paid or incurred for qualified research occurring in the United States, 

and to increase the domestic production activities deduction for the 

manufacture of property substantially all of the research and development 

of which occurred in the United States. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 19, 2013 

Ms. EDWARDS (for herself, Ms. NORTON, Mr. CUMMINGS, Ms. TSONGAS, Mr. 

CICILLINE, Mr. WELCH, and Mr. HOLT) 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 make 

permanent the credit for increasing research activities, 

to increase such credit for amounts paid or incurred 

for qualified research occurring in the United States, 

and to increase the domestic production activities deduction for the manufacture of property substantially all 

of the research and development of which occurred in 

the United States. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘21st Century Invest3 ment Act of 2013’’. 

4 SEC. 2. RESEARCH CREDIT MADE PERMANENT. 

5 (a) IN GENERAL.—Section 41 of the Internal Rev6 enue Code of 1986 is amended by striking subsection (h). 

7 (b) CONFORMING AMENDMENTS.— 

8 (1) Section 41(c) of such Code is amended by 

9 striking paragraph (4). 

10 (2) Paragraph (1) of section 45C(b) of such 

11 Code is amended by striking subparagraph (D). 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this subsection shall apply to amounts paid or incurred 

14 after December 31, 2013. 

15 SEC. 3. INCREASE IN RESEARCH CREDIT FOR CONTRACTED 

16 RESEARCH WITH UNITED STATES BUSI17 NESSES. 

18 (a) IN GENERAL.—Section 41 of the Internal Rev19 enue Code of 1986, as amended by section 2 of this Act, 

20 is amended by inserting after subsection (g) the following 

21 new subsection: 

22 ‘‘(h) SPECIAL RULE FOR CONTRACTED RESEARCH

23 WITH UNITED STATES MANUFACTURING BUSINESS.— 

24 ‘‘(1) IN GENERAL.—If the taxpayer elects the 

25 application of this subsection, subsection (a)(1) shall 

26 be applied by substituting ‘25 percent’ for ‘20 perVerDate Mar 15 2010 00:52 Nov 21, 2013 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3537.IH H3537

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1 cent’ with respect to qualified United States re2 search expenses. 

3 ‘‘(2) QUALIFIED UNITED STATES RESEARCH

4 EXPENSES.—For purposes of this subsection, the 

5 term ‘qualified United States research expenses’ 

6 means any amount paid or incurred by the taxpayer 

7 to any person (other than an employee of the tax8 payer) for qualified research, substantially all of 

9 which occurs in the United States. 

10 ‘‘(3) SEPARATE APPLICATION OF SECTION.—In 

11 the case of any election of the application of this 

12 subsection, this section shall be applied separately 

13 with respect qualified United States research ex14 penses.’’. 

15 (b) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to amounts paid or incurred for 

17 taxable years beginning after the date of the enactment 

18 of this Act. 

19 SEC. 4. INCREASE IN DOMESTIC PRODUCTION ACTIVITIES 

20 DEDUCTION FOR MANUFACTURED PROP21 ERTY RESEARCHED AND DEVELOPED IN 

22 UNITED STATES. 

23 (a) IN GENERAL.—Subsection (d) of section 199 of 

24 the Internal Revenue Code of 1986 is amended by redesigVerDate Mar 15 2010 00:52 Nov 21, 2013 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3537.IH H3537

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1 nating paragraph (10) as paragraph (11) and by inserting 

2 after paragraph (9) the following new paragraph: 

3 ‘‘(10) SPECIAL RULE FOR CERTAIN MANUFAC4 TURING.— 

5 ‘‘(A) IN GENERAL.—In the case qualified 

6 production activities income attributable to the 

7 manufacture or production of qualifying pro8 duction property substantially all of the re9 search and development of which occurred in 

10 the United States, subsection (a) shall be ap11 plied by substituting ‘15 percent’ for ‘9 per12 cent’. 

13 ‘‘(B) SPECIAL RULE WHEN TAXABLE IN14 COME USED TO DETERMINE DEDUCTION.—In 

15 the case of any taxable year for which the tax16 payer’s qualified production activities income 

17 exceeds the taxpayer’s taxable income (deter18 mined without regard to this section), the 

19 amount of taxable income to which the 15 per20 cent amount in subparagraph (A) applies under 

21 subsection (a)(1) shall be an amount equal to 

22 the amount which bears the same ratio to such 

23 taxable income (as so determined) as— 

24 ‘‘(i) the amount of qualified produc25 tion activities income of the taxpayer for 


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1 the taxable year which is attributable to 

2 the manufacture or production of quali3 fying production property substantially all 

4 of the research and development with re5 spect to which occurred in the United 

6 States, bears to 

7 ‘‘(ii) all qualified production activities 

8 income of the taxpayer for the taxable 

9 year. 

10 ‘‘(C) TERMINATION.—This paragraph shall 

11 not apply to taxable years beginning after De12 cember 31, 2022.’’. 

13 (b) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 the date of the enactment of this Act. 

Æ 


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