I 

116TH CONGRESS 

1ST SESSION H. R. 942 

To amend the Internal Revenue Code of 1986 to provide an enhanced research 

credit for the development of smart gun technologies. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 31, 2019 

Mr. HIMES (for himself, Ms. KUSTER of New Hampshire, Ms. HILL of California, Ms. CLARKE of New York, Mr. DEUTCH, Mr. PERLMUTTER, Mr. 

SOTO, and Mrs. MURPHY) 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 provide 

an enhanced research credit for the development of smart 

gun technologies. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Start Advancing Fire5 arms Enhancements and Technology Act of 2018’’ or the 

6 ‘‘SAFETY Act’’. 


kjohnson on DSK79L0C42 with BILLS
2 

•HR 942 IH

1 SEC. 2. ENHANCED RESEARCH CREDIT FOR DEVELOPMENT 

2 OF SMART GUN TECHNOLOGIES. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by inserting after section 45S the fol6 lowing new section: 

7 ‘‘SEC. 45T. RESEARCH EXPENSES FOR SMART GUN TECH8 NOLOGIES. 

9 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

10 in the case of a taxpayer who is a Federal firearms li11 censee, the smart gun technology credit determined under 

12 this section for the taxable year is an amount equal to 

13 30 percent of the excess of— 

14 ‘‘(1) the smart gun technology expenses for the 

15 taxable year, over 

16 ‘‘(2) the base amount. 

17 ‘‘(b) SMART GUN TECHNOLOGY EXPENSES; BASE

18 AMOUNT.—For purposes of this section— 

19 ‘‘(1) SMART GUN TECHNOLOGY EXPENSES.— 

20 ‘‘(A) IN GENERAL.—Except as otherwise 

21 provided in this paragraph, the term ‘smart gun 

22 technology expenses’ means the amounts which 

23 are paid or incurred by the taxpayer during the 

24 taxable year which would be described in sec25 tion 41(b) if such section were applied with the 

26 modifications set forth in subparagraph (B). 


kjohnson on DSK79L0C42 with BILLS
3 

•HR 942 IH

1 ‘‘(B) MODIFICATIONS.—For purposes of 

2 subparagraph (A), section 41(b) shall be ap3 plied— 

4 ‘‘(i) by substituting ‘smart gun tech5 nology research’ for ‘qualified research’ 

6 each place it appears in paragraphs (2) 

7 and (3) of such subsection, and 

8 ‘‘(ii) by substituting ‘100 percent’ for 

9 ‘65 percent’ in paragraph (3)(A) of such 

10 subsection. 

11 ‘‘(C) EXCLUSION FOR AMOUNTS FUNDED

12 BY GRANTS, ETC.—The term ‘smart gun tech13 nology expenses’ shall not include any amount 

14 to the extent such amount is funded by any 

15 grant, contract, or otherwise by another person 

16 (or any governmental entity). 

17 ‘‘(2) BASE AMOUNT.— 

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 subparagraph (B), the term ‘base amount’ 

20 means the amount which would be the base 

21 amount in section 41(c) if such section were ap22 plied by substituting ‘smart gun technology re23 search’ for ‘qualified research’ each place it ap24 pears. 


kjohnson on DSK79L0C42 with BILLS
4 

•HR 942 IH

1 ‘‘(B) BASE AMOUNT IS ZERO FOR 3

2 YEARS.—The base amount shall be zero for 

3 purposes of determining the amount of credit 

4 for taxable years beginning in 2019, 2020, or 

5 2021. 

6 ‘‘(c) SMART GUN TECHNOLOGY RESEARCH.—For 

7 purposes of this section— 

8 ‘‘(1) IN GENERAL.—The term ‘smart gun tech9 nology research’ means qualified research (as de10 fined in section 41(d)) for the purpose of developing 

11 smart gun technologies for firearms. 

12 ‘‘(2) SMART GUN TECHNOLOGY.—The term 

13 ‘smart gun technology’ means any technology (other 

14 than a simple mechanical lock) which is designed— 

15 ‘‘(A) to prevent a firearm from being fired 

16 by any individual other than an authorized user 

17 of the firearm, and 

18 ‘‘(B) to convert the firearm from the inop19 erable condition to the operable condition in 

20 less than 2 seconds after the authorized user 

21 makes contact with the firearm, the firearm’s 

22 arming device, or an external safe or locking 

23 device. 

24 ‘‘(3) AUTHORIZED USER.—For purposes of this 

25 subsection, the term ‘authorized user’ means, with 


kjohnson on DSK79L0C42 with BILLS
5 

•HR 942 IH

1 respect to a firearm, the owner of the firearm and 

2 any individual lawfully authorized by such owner to 

3 operate the firearm. 

4 ‘‘(4) SIMPLE MECHANICAL LOCK.—For pur5 poses of this subsection, the term ‘simple mechanical 

6 lock’ means a lock that uses a key or a conventional 

7 combination lock. Such term does not include an ad8 vanced lock that incorporates electronics or biomet9 ric sensors, or a lock with other features to enable 

10 faster opening from any orientation with low visi11 bility. 

12 ‘‘(d) FEDERAL FIREARMS LICENSEE.—For purposes 

13 of this section, the term ‘Federal firearms licensee’ means 

14 any person holding a license under chapter 44 of title 18, 

15 United States Code, other than a licensed collector. 

16 ‘‘(e) COORDINATION WITH CREDIT FOR INCREASING

17 RESEARCH EXPENDITURES.— 

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graph (2), any smart gun technology expenses for a 

20 taxable year to which an election under this section 

21 applies shall not be taken into account for purposes 

22 of determining the credit allowable under section 41 

23 for such taxable year. 

24 ‘‘(2) EXPENSES INCLUDED IN DETERMINING

25 BASE PERIOD RESEARCH EXPENSES.—Smart gun 


kjohnson on DSK79L0C42 with BILLS
6 

•HR 942 IH

1 technology expenses for any taxable year shall be 

2 taken into account in determining base period re3 search expenses for purposes of applying section 41 

4 to subsequent taxable years. 

5 ‘‘(f) SPECIAL RULES.— 

6 ‘‘(1) CERTAIN RULES MADE APPLICABLE.— 

7 Rules similar to the rules of paragraphs (1) and (2) 

8 of section 41(f) shall apply for purposes of this sec9 tion. 

10 ‘‘(2) ELECTION.—This section shall apply to 

11 any taxpayer for any taxable year only if such tax12 payer elects (at such time and in such manner as 

13 the Secretary may by regulations prescribe) to have 

14 this section apply for such taxable year. 

15 ‘‘(g) TREATMENT OF CREDIT FOR QUALIFIED SMALL

16 BUSINESSES.— 

17 ‘‘(1) IN GENERAL.—Under rules similar to the 

18 rules of section 41(h), section 3111(f) shall apply to 

19 the payroll tax credit portion of the credit otherwise 

20 determined under subsection (a) for the taxable year 

21 and such portion shall not be treated (other than for 

22 purposes of section 280C) as a credit determined 

23 under subsection (a). 

24 ‘‘(2) FEDERAL FIREARMS LICENSEE EXCEP25 TION.—For purposes of this subsection, the payroll 


kjohnson on DSK79L0C42 with BILLS
7 

•HR 942 IH

1 tax credit portion of the credit otherwise determined 

2 under subsection (a) shall be determined without re3 gard to whether the taxpayer is a Federal firearms 

4 licensee.’’. 

5 (b) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

6 such Code is amended by adding at the end the following 

7 new subsection: 

8 ‘‘(i) CREDIT FOR SMART GUN TECHNOLOGY EX9 PENSES.— 

10 ‘‘(1) IN GENERAL.—No deduction shall be al11 lowed for that portion of the smart gun technology 

12 expenses (as defined in section 45T(b)) otherwise al13 lowable as a deduction for the taxable year which is 

14 equal to the amount of the credit allowable for the 

15 taxable year under section 45T (determined without 

16 regard to section 38(c) thereof). 

17 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP18 ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 

19 ‘‘(A) the amount of the credit allowable for 

20 the taxable year under section 45T (determined 

21 without regard to section 38(c)), exceeds 

22 ‘‘(B) the amount allowable as a deduction 

23 for the taxable year for smart gun technology 

24 expenses (determined without regard to para25 graph (1)), 


kjohnson on DSK79L0C42 with BILLS
8 

•HR 942 IH

1 the amount chargeable to capital account for the 

2 taxable year for such expenses shall be reduced by 

3 the amount of such excess. 

4 ‘‘(3) CONTROLLED GROUPS.—In the case of a 

5 corporation which is a member of a controlled group 

6 of corporations (within the meaning of section 

7 41(f)(5)) or a trade or business which is treated as 

8 being under common control with other trades or 

9 business (within the meaning of section 

10 41(f)(1)(B)), this subsection shall be applied under 

11 rules prescribed by the Secretary similar to the rules 

12 applicable under subparagraphs (A) and (B) of sec13 tion 41(f)(1).’’. 

14 (c) CREDIT MADE PART OF GENERAL BUSINESS

15 CREDIT.— 

16 (1) IN GENERAL.—Section 38(b) of such Code 

17 is amended by striking ‘‘plus’’ at the end of para18 graph (31), by striking the period at the end of 

19 paragraph (32) and inserting ‘‘, plus’’, and by add20 ing at the end thereof the following new paragraph: 

21 ‘‘(33) in the case of a taxpayer who is a Fed22 eral firearms licensee (as defined in section 45T(d)), 

23 the smart gun technology credit determined under 

24 section 45T(a).’’. 


kjohnson on DSK79L0C42 with BILLS
9 

•HR 942 IH

1 (2) DEDUCTION FOR CERTAIN UNUSED BUSI2 NESS CREDITS.—Subsection (c) of section 196 of 

3 such Code is amended by striking ‘‘and’’ at the end 

4 of paragraph (13), by striking the period at the end 

5 of paragraph (14) and inserting ‘‘, and’’, and by 

6 adding after paragraph (8) the following new para7 graph: 

8 ‘‘(15) the smart gun technology credit deter9 mined under section 45T.’’. 

10 (d) CLERICAL AMENDMENT.—The table of sections 

11 for subpart D of part IV of subchapter A of chapter 1 

12 of such Code is amended by inserting after the item relat13 ing to section 45S the following new item: 

‘‘Sec. 45T. Research expenses for smart gun technologies.’’. 

14 (e) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to amounts paid or incurred after 

16 December 31, 2019, in taxable years beginning after such 

17 date. 

18 SEC. 3. FIREARMS TAX NOT TO APPLY TO COST OF SMART 

19 GUN TECHNOLOGY. 

20 (a) IN GENERAL.—Section 4181 of the Internal Rev21 enue Code of 1986 is amended by adding at the end the 

22 following new sentence: 

23 ‘‘The price taken into account under the preceding 

24 sentence shall not include so much of the price of the fireVerDate Sep 11 2014 22:45 Feb 11, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H942.IH H942

kjohnson on DSK79L0C42 with BILLS
10 

•HR 942 IH

1 arm as is attributable to any smart gun technology (as 

2 defined in section 45T(c)(2)) of such firearm.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall take effect on January 1, 2020. 

Æ 


kjohnson on DSK79L0C42 with BILLS