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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1203 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1203

   To amend the Internal Revenue Code of 1986 to extend the research 
credit through 2010 and to increase and make permanent the alternative 
          simplified research credit, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              June 8, 2009

Mr. Baucus (for himself, Mr. Hatch, Mr. Kerry, Mrs. Lincoln, Mr. Wyden, 
 Mr. Schumer, Ms. Cantwell, Mr. Menendez, Mr. Ensign, and Mr. Cornyn) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
   To amend the Internal Revenue Code of 1986 to extend the research 
credit through 2010 and to increase and make permanent the alternative 
          simplified research credit, and for other purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Grow Research 
Opportunities With Taxcredits' Help Act'' or ``GROWTH Act''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. EXTENSION OF RESEARCH CREDIT; INCREASE IN ALTERNATIVE 
              SIMPLIFIED RESEARCH CREDIT.

    (a) Extension of Credit.--
            (1) In general.--Subparagraph (B) of section 41(h)(1) is 
        amended by striking ``December 31, 2009'' and inserting 
        ``December 31, 2010''.
            (2) Conforming amendment.--Subparagraph (D) of section 
        45C(b)(1) is amended by striking ``December 31, 2009'' and 
        inserting ``December 31, 2010''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to amounts paid or incurred after December 31, 
        2009.
    (b) Alternative Simplified Research Credit Increased.--
            (1) Increased credit.--Paragraph (5) of section 41(c) 
        (relating to election of alternative simplified credit) is 
        amended--
                    (A) by striking ``14 percent (12 percent in the 
                case of taxable years ending before January 1, 2009)'' 
                in subparagraph (A) and inserting ``20 percent'', and
                    (B) by striking ``6 percent'' in subparagraph 
                (B)(ii) and inserting ``10 percent''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

SEC. 3. MODIFICATION OF RESEARCH CREDIT AFTER 2010.

    (a) Simplified Credit for Qualified Research Expenses.--Subsection 
(a) of section 41 is amended to read as follows:
    ``(a) General Rule.--
            ``(1) Credit determined.--For purposes of section 38, the 
        research credit determined under this section for the taxable 
        year shall be an amount equal to 20 percent of so much of the 
        qualified research expenses for the taxable year as exceeds 50 
        percent of the average qualified research expenses for the 3 
        taxable years preceding the taxable year for which the credit 
        is being determined.
            ``(2) Special rule in case of no qualified research 
        expenses in any of 3 preceding taxable years.--
                    ``(A) Taxpayers to which paragraph applies.--The 
                credit under this section shall be determined under 
                this paragraph if the taxpayer has no qualified 
                research expenses in any one of the 3 taxable years 
                preceding the taxable year for which the credit is 
                being determined.
                    ``(B) Credit rate.--The credit determined under 
                this paragraph shall be equal to 10 percent of the 
                qualified research expenses for the taxable year.''.
    (b) Conforming Amendments.--
            (1) Termination of base amount calculation.--Section 41 is 
        amended by striking subsection (c) and redesignating subsection 
        (d) as subsection (c).
            (2) Termination of basic research payment calculation.--
        Section 41 is amended by striking subsection (e) and 
        redesignating subsections (f) and (g) as subsections (d) and 
        (e), respectively.
            (3) Special rules.--
                    (A) Paragraph (1)(A)(ii) of subsection (d) of 
                section 41, as so redesignated, is amended by striking 
                ``shares of the qualified research expenses, basic 
                research payments, and amounts paid or incurred to 
                energy research consortiums,'' and inserting ``share of 
                the qualified research expenses''.
                    (B) Paragraph (1)(B)(ii) of section 41(d), as so 
                redesignated, is amended by striking ``shares of the 
                qualified research expenses, basic research payments, 
                and amounts paid or incurred to energy research 
                consortiums,'' and inserting ``share of the qualified 
                research expenses''.
                    (C) Paragraph (3) of section 41(d), as so 
                redesignated, is amended--
                            (i) by striking ``, and the gross receipts 
                        of the taxpayer'' and all that follows in 
                        subparagraph (A) and inserting a period,
                            (ii) by striking ``, and the gross receipts 
                        of the taxpayer'' and all that follows in 
                        subparagraph (B) and inserting a period, and
                            (iii) by striking subparagraph (C).
                    (D) Paragraph (4) of section 41(d), as so 
                redesignated, is amended by striking ``and gross 
                receipts''.
                    (E) Subsection (d) of section 41, as so 
                redesignated, is amended by striking paragraph (6).
            (4) Permanent extension.--
                    (A) Section 41 is amended by striking subsection 
                (h).
                    (B) Paragraph (1) of section 45C(b) is amended by 
                striking subparagraph (D).
            (5) Cross-references.--
                    (A) Paragraphs (2)(A) and (4) of section 41(b) are 
                each amended by striking ``subsection (f)(1)'' and 
                inserting ``subsection (d)(1)''.
                    (B) Paragraph (2) of section 45C(c) is amended by 
                striking ``base period research expenses'' and 
                inserting ``average qualified research expenses''.
                    (C) Paragraph (3) of section 45C(d) is amended by 
                striking ``section 41(f)'' and inserting ``section 
                41(d)''.
                    (D) Paragraph (2) of section 45G(e) is amended by 
                striking ``section 41(f)'' and inserting ``section 
                41(d)''.
                    (E) Subsection (g) of section 45O is amended by 
                striking ``section 41(f)'' and inserting ``section 
                41(d)''.
                    (F) Subparagraph (A) of section 54(l)(3) is amended 
                by striking ``section 41(g)'' and inserting ``section 
                41(e)''.
                    (G) Clause (i) of section 170(e)(4)(B) is amended 
                to read as follows:
                            ``(i) the contribution is to a qualified 
                        organization,''.
                    (H) Paragraph (4) of section 170(e) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Qualified organization.--For purposes of this 
                paragraph, the term `qualified organization' means--
                            ``(i) any educational organization which--
                                    ``(I) is an institution of higher 
                                education (within the meaning of 
                                section 3304(f)), and
                                    ``(II) is described in subsection 
                                (b)(1)(A)(ii), or
                            ``(ii) any organization not described in 
                        clause (i) which--
                                    ``(I) is described in section 
                                501(c)(3) and is exempt from tax under 
                                section 501(a),
                                    ``(II) is organized and operated 
                                primarily to conduct scientific 
                                research, and
                                    ``(III) is not a private 
                                foundation.''.
                    (I) Subsection (f) of section 197 is amended by 
                striking ``section 41(f)(1)'' each place it appears in 
                paragraphs (1)(C) and (9)(C)(i) and inserting ``section 
                41(d)(1)''.
                    (J) Section 280C is amended--
                            (i) by striking ``41(f)'' each place it 
                        appears in subsection (b)(3) and inserting 
                        ``41(d)'',
                            (ii) by striking ``or basic research 
                        expenses (as defined in section 41(e)(2))'' in 
                        subsection (c)(1),
                            (iii) by striking ``section 41(a)(1)'' in 
                        subsection (c)(2)(A) and inserting ``section 
                        41(a)'', and
                            (iv) by striking ``or basic research 
                        expenses'' in subsection (c)(2)(B).
                    (K) Subclause (IV)(c) of section 936(h)(5)(C)(i) is 
                amended by striking ``section 41(f)'' and inserting 
                ``section 41(d)''.
                    (L) Subparagraph (D) of section 936(j)(5) is 
                amended by striking ``section 41(f)(3)'' and inserting 
                ``section 41(d)(3)''.
                    (M) Clause (i) of section 965(c)(2)(C) is amended 
                by striking ``section 41(f)(3)'' and inserting 
                ``section 41(d)(3)''.
                    (N) Clause (i) of section 1400N(l)(7)(B) is amended 
                by striking ``section 41(g)'' and inserting ``section 
                41(e)''.
    (c) Technical Corrections.--Section 409 is amended--
            (1) by inserting ``, as in effect before the enactment of 
        the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)'' in 
        subsection (b)(1)(A),
            (2) by inserting ``, as in effect before the enactment of 
        the Tax Reform Act of 1984'' after ``relating to the employee 
        stock ownership credit'' in subsection (b)(4),
            (3) by inserting ``(as in effect before the enactment of 
        the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)'' in 
        subsection (i)(1)(A),
            (4) by inserting ``(as in effect before the enactment of 
        the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)'' in 
        subsection (m),
            (5) by inserting ``(as so in effect)'' after ``section 
        48(n)(1)'' in subsection (m),
            (6) by inserting ``(as in effect before the enactment of 
        the Tax Reform Act of 1984)'' after ``section 48(n)'' in 
        subsection (q)(1), and
            (7) by inserting ``(as in effect before the enactment of 
        the Tax Reform Act of 1984)'' after ``section 41'' in 
        subsection (q)(3).
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2010.
            (2) Technical corrections.--The amendments made by 
        subsection (c) shall take effect on the date of the enactment 
        of this Act.
                                 <all>
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