I 

113TH CONGRESS 

1ST SESSION H. R. 3640 

To amend the Internal Revenue Code of 1986 to increase and make 

permanent the research credit. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 3, 2013 

Ms. BROWNLEY of California 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 increase 

and make permanent the research credit. 

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 ‘‘Innovation, Research, 

5 and Manufacturing Act’’. 

6 SEC. 2. RESEARCH CREDIT INCREASED AND MADE PERMA7 NENT. 

8 (a) CREDIT AMOUNT INCREASED BY 50 PERCENT.— 

9 Paragraphs (1), (2), and (3) of section 41(a) of the InterVerDate Mar 15 2010 04:15 Dec 04, 2013 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3640.IH H3640

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1 nal Revenue Code of 1986 are each amended by striking 

2 ‘‘20 percent’’ and inserting ‘‘30 percent’’. 

3 (b) CREDIT MADE PERMANENT.— 

4 (1) IN GENERAL.—Section 41 of such Code is 

5 amended by striking subsection (h). 

6 (2) CONFORMING AMENDMENTS.— 

7 (A) Subsection (c) of section 41 of such 

8 Code is amended by striking paragraph (4). 

9 (B) Paragraph (1) of section 45C(b) of 

10 such Code is amended by striking subparagraph 

11 (D). 

12 (c) CREDIT ALLOWED AGAINST PAYROLL TAXES FOR

13 SMALL EMPLOYERS.—Section 41 of such Code, as amend14 ed by subsection (b), is amended by adding at the end 

15 the following new subsection: 

16 ‘‘(h) CREDIT ALLOWED AGAINST PAYROLL TAXES

17 FOR SMALL EMPLOYERS.— 

18 ‘‘(1) IN GENERAL.—In the case of an eligible 

19 small employer, so much of the credit determined 

20 under subsection (a) for the taxable year (deter21 mined without regard to this subsection) as does not 

22 exceed the payroll taxes paid by such employer for 

23 periods during such taxable year shall be treated for 

24 purposes of this title as a credit allowed under sub25 part C. 


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1 ‘‘(2) COORDINATION WITH RESEARCH CRED2 IT.—The amount determined under subsection (a) 

3 for any taxable year shall be reduced by the amount 

4 treated under paragraph (1) as a credit allowed 

5 under subpart C. 

6 ‘‘(3) ELIGIBLE SMALL EMPLOYER.—For pur7 poses of this subsection, the term ‘eligible small em8 ployer’ means a small business concern within the 

9 meaning of section 3 of the Small Business Act. 

10 ‘‘(4) PAYROLL TAXES.—For purposes of this 

11 subsection, the term ‘payroll taxes’ means— 

12 ‘‘(A) any tax imposed under section 3111 

13 or 3221(a), 

14 ‘‘(B) so much of any tax imposed under 

15 section 3211(a) as relates to the rates of tax 

16 under subsections (a) and (b) of section 3111, 

17 and 

18 ‘‘(C) 50 percent of any tax imposed under 

19 section 1401.’’. 

20 (d) EFFECTIVE DATES.— 

21 (1) IN GENERAL.—Except as provided in para22 graph (2), the amendments made by this section 

23 shall apply to taxable years beginning after Decem24 ber 31, 2013. 


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1 (2) EXTENSION OF CREDIT.—The amendments 

2 made by subsection (b) shall apply to amounts paid 

3 or incurred after December 31, 2013. 

Æ 


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