I

106TH CONGRESS

1ST SESSION H. R. 1328

To amend the Internal Revenue Code of 1986 to allow the research credit

for expenses attributable to certain collaborative research consortia.

IN THE HOUSE OF REPRESENTATIVES

MARCH 25, 1999

Mr. HOUGHTON (for himself, Mr. LEVIN, Ms. SLAUGHTER, Mr. CLYBURN, Mr.

BOEHLERT, Mr. WELLER, Mr. SKEEN, Mr. INSLEE, Mr. FOLEY, Mrs.

THURMAN, Mr. SHOWS, Ms. KILPATRICK, Mr. DOOLITTLE, Ms.

LOFGREN, Mr. DIAZ-BALART, Mr. WELDON of Pennsylvania, Mr.

MCDERMOTT, Mr. DOOLEY of California, Mr. CRANE, Mr. WATKINS, Mr.

CAMP, Mr. METCALF, Mr. ENGLISH, and Mr. KLECZKA) 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 allow the

research credit for expenses attributable to certain collaborative research consortia.

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 ‘‘Public Benefit Collabo5 rative Research Tax Credit Act of 1999’’.
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1 SEC. 2. RESEARCH CREDIT FOR EXPENSES ATTRIBUTABLE

2 TO CERTAIN COLLABORATIVE RESEARCH

3 CONSORTIA.

4 (a) CREDIT FOR EXPENSES ATTRIBUTABLE TO CER5 TAIN COLLABORATIVE RESEARCH CONSORTIA.—Sub6 section (a) of section 41 of the Internal Revenue Code of

7 1986 (relating to credit for increasing research activities)

8 is amended by striking ‘‘and’’ at the end of paragraph (1),

9 by striking the period at the end of paragraph (2) and

10 inserting ‘‘, and’’, and by adding at the end the following

11 new paragraph:

12 ‘‘(3) 20 percent of the amounts paid or in13 curred during the taxable year (including as con14 tributions) to a qualified research consortium.’’

15 (b) QUALIFIED RESEARCH CONSORTIUM DE16 FINED.—Subsection (f) of section 41 of such Code is

17 amended by adding at the end the following new para18 graph:

19 ‘‘(6) QUALIFIED RESEARCH CONSORTIUM.—The

20 term ‘qualified research consortium’ means any or21 ganization which—

22 ‘‘(A) is described in section 501(c)(3) and

23 is exempt from tax under section 501(a),

24 ‘‘(B) is organized and operated primarily

25 to conduct scientific research,

26 ‘‘(C) is not a private foundation,
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1 ‘‘(D) to which at least 15 unrelated per2 sons paid or incurred (including as contribu3 tions), during the calendar year in which the

4 taxable year of the organization begins,

5 amounts to such organization for scientific re6 search,

7 ‘‘(E) to which no 3 unrelated persons paid

8 or incurred (including as contributions) during

9 such calendar year more than 50 percent of the

10 total amounts received by such organization

11 during such calendar year for scientific re12 search, and

13 ‘‘(F) to which no single person paid or in14 curred (including as contributions) more than

15 25 percent of such total amounts.

16 All persons treated as a single employer under sub17 section (a) or (b) of section 52 shall be treated as

18 related persons for purposes of subparagraphs (D)

19 and (E), and as a single person for purposes of sub20 paragraph (F).’’

21 (c) REPEAL OF CONTRACT RESEARCH EXPENSE

22 LIMITATION APPLICABLE TO QUALIFIED RESEARCH CON23 SORTIA.—Paragraph (3) of section 41(b) of such Code is

24 amended by striking subparagraph (C).

25 (d) CONFORMING AMENDMENTS.—
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1 (1) Paragraph (1) of section 280C(c) of such

2 Code is amended by striking ‘‘qualified research ex3 penses (as defined in section 41(b)) or basic re4 search expenses (as defined in section 41(e)(2))’’

5 and inserting ‘‘qualified research expenses (as de6 fined in section 41(b)), basic research expenses (as

7 defined in section 41(e)(2)), or amounts paid or in8 curred during the taxable year (including as con9 tributions) to a qualified research consortium (as de10 fined in section 41(f)(6))’’.

11 (2) Subparagraph (B) of section 280C(c)(2) of

12 such Code is amended by striking ‘‘qualified re13 search expenses or basic research expenses’’ and in14 serting ‘‘qualified research expenses, basic research

15 expenses, or amounts paid or incurred during the

16 taxable year (including as contributions) to a quali17 fied research consortium’’.

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

19 this section shall apply to taxable years beginning after

20 December 31, 1999.

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