II 

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. 

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; AMENDMENT OF 1986 CODE. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Grow Research Opportunities With Taxcredits’ Help 

6 Act’’ or ‘‘GROWTH Act’’. 


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1 (b) AMENDMENT OF 1986 CODE.—Except as other2 wise expressly provided, whenever in this Act an amend3 ment or repeal is expressed in terms of an amendment 

4 to, or repeal of, a section or other provision, the reference 

5 shall be considered to be made to a section or other provi6 sion of the Internal Revenue Code of 1986. 

7 SEC. 2. EXTENSION OF RESEARCH CREDIT; INCREASE IN 

8 ALTERNATIVE SIMPLIFIED RESEARCH CRED9 IT. 

10 (a) EXTENSION OF CREDIT.— 

11 (1) IN GENERAL.—Subparagraph (B) of section 

12 41(h)(1) is amended by striking ‘‘December 31, 

13 2009’’ and inserting ‘‘December 31, 2010’’. 

14 (2) CONFORMING AMENDMENT.—Subparagraph 

15 (D) of section 45C(b)(1) is amended by striking 

16 ‘‘December 31, 2009’’ and inserting ‘‘December 31, 

17 2010’’. 

18 (3) EFFECTIVE DATE.—The amendments made 

19 by this subsection shall apply to amounts paid or in20 curred after December 31, 2009. 

21 (b) ALTERNATIVE SIMPLIFIED RESEARCH CREDIT

22 INCREASED.— 

23 (1) INCREASED CREDIT.—Paragraph (5) of sec24 tion 41(c) (relating to election of alternative sim25 plified credit) is amended— 


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1 (A) by striking ‘‘14 percent (12 percent in 

2 the case of taxable years ending before January 

3 1, 2009)’’ in subparagraph (A) and inserting 

4 ‘‘20 percent’’, and 

5 (B) by striking ‘‘6 percent’’ in subpara6 graph (B)(ii) and inserting ‘‘10 percent’’. 

7 (2) EFFECTIVE DATE.—The amendment made 

8 by this subsection shall apply to taxable years begin9 ning after the date of the enactment of this Act. 

10 SEC. 3. MODIFICATION OF RESEARCH CREDIT AFTER 2010. 

11 (a) SIMPLIFIED CREDIT FOR QUALIFIED RESEARCH

12 EXPENSES.—Subsection (a) of section 41 is amended to 

13 read as follows: 

14 ‘‘(a) GENERAL RULE.— 

15 ‘‘(1) CREDIT DETERMINED.—For purposes of 

16 section 38, the research credit determined under this 

17 section for the taxable year shall be an amount equal 

18 to 20 percent of so much of the qualified research 

19 expenses for the taxable year as exceeds 50 percent 

20 of the average qualified research expenses for the 3 

21 taxable years preceding the taxable year for which 

22 the credit is being determined. 

23 ‘‘(2) SPECIAL RULE IN CASE OF NO QUALIFIED

24 RESEARCH EXPENSES IN ANY OF 3 PRECEDING TAX25 ABLE YEARS.— 


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1 ‘‘(A) TAXPAYERS TO WHICH PARAGRAPH

2 APPLIES.—The credit under this section shall 

3 be determined under this paragraph if the tax4 payer has no qualified research expenses in any 

5 one of the 3 taxable years preceding the taxable 

6 year for which the credit is being determined. 

7 ‘‘(B) CREDIT RATE.—The credit deter8 mined under this paragraph shall be equal to 

9 10 percent of the qualified research expenses 

10 for the taxable year.’’. 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) TERMINATION OF BASE AMOUNT CALCULA13 TION.—Section 41 is amended by striking subsection 

14 (c) and redesignating subsection (d) as subsection 

15 (c). 

16 (2) TERMINATION OF BASIC RESEARCH PAY17 MENT CALCULATION.—Section 41 is amended by 

18 striking subsection (e) and redesignating subsections 

19 (f) and (g) as subsections (d) and (e), respectively. 

20 (3) SPECIAL RULES.— 

21 (A) Paragraph (1)(A)(ii) of subsection (d) 

22 of section 41, as so redesignated, is amended by 

23 striking ‘‘shares of the qualified research ex24 penses, basic research payments, and amounts 

25 paid or incurred to energy research consorVerDate Nov 24 2008 23:30 Jun 09, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1203.IS S1203

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1 tiums,’’ and inserting ‘‘share of the qualified re2 search expenses’’. 

3 (B) Paragraph (1)(B)(ii) of section 41(d), 

4 as so redesignated, is amended by striking 

5 ‘‘shares of the qualified research expenses, basic 

6 research payments, and amounts paid or in7 curred to energy research consortiums,’’ and in8 serting ‘‘share of the qualified research ex9 penses’’. 

10 (C) Paragraph (3) of section 41(d), as so 

11 redesignated, is amended— 

12 (i) by striking ‘‘, and the gross re13 ceipts of the taxpayer’’ and all that follows 

14 in subparagraph (A) and inserting a pe15 riod, 

16 (ii) by striking ‘‘, and the gross re17 ceipts of the taxpayer’’ and all that follows 

18 in subparagraph (B) and inserting a pe19 riod, and 

20 (iii) by striking subparagraph (C). 

21 (D) Paragraph (4) of section 41(d), as so 

22 redesignated, is amended by striking ‘‘and gross 

23 receipts’’. 


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1 (E) Subsection (d) of section 41, as so re2 designated, is amended by striking paragraph 

3 (6). 

4 (4) PERMANENT EXTENSION.— 

5 (A) Section 41 is amended by striking sub6 section (h). 

7 (B) Paragraph (1) of section 45C(b) is 

8 amended by striking subparagraph (D). 

9 (5) CROSS-REFERENCES.— 

10 (A) Paragraphs (2)(A) and (4) of section 

11 41(b) are each amended by striking ‘‘subsection 

12 (f)(1)’’ and inserting ‘‘subsection (d)(1)’’. 

13 (B) Paragraph (2) of section 45C(c) is 

14 amended by striking ‘‘base period research ex15 penses’’ and inserting ‘‘average qualified re16 search expenses’’. 

17 (C) Paragraph (3) of section 45C(d) is 

18 amended by striking ‘‘section 41(f)’’ and insert19 ing ‘‘section 41(d)’’. 

20 (D) Paragraph (2) of section 45G(e) is 

21 amended by striking ‘‘section 41(f)’’ and insert22 ing ‘‘section 41(d)’’. 

23 (E) Subsection (g) of section 45O is 

24 amended by striking ‘‘section 41(f)’’ and insert25 ing ‘‘section 41(d)’’. 


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1 (F) Subparagraph (A) of section 54(l)(3) 

2 is amended by striking ‘‘section 41(g)’’ and in3 serting ‘‘section 41(e)’’. 

4 (G) Clause (i) of section 170(e)(4)(B) is 

5 amended to read as follows: 

6 ‘‘(i) the contribution is to a qualified 

7 organization,’’. 

8 (H) Paragraph (4) of section 170(e) is 

9 amended by adding at the end the following 

10 new subparagraph: 

11 ‘‘(E) QUALIFIED ORGANIZATION.—For 

12 purposes of this paragraph, the term ‘qualified 

13 organization’ means— 

14 ‘‘(i) any educational organization 

15 which— 

16 ‘‘(I) is an institution of higher 

17 education (within the meaning of sec18 tion 3304(f)), and 

19 ‘‘(II) is described in subsection 

20 (b)(1)(A)(ii), or 

21 ‘‘(ii) any organization not described in 

22 clause (i) which— 

23 ‘‘(I) is described in section 

24 501(c)(3) and is exempt from tax 

25 under section 501(a), 


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1 ‘‘(II) is organized and operated 

2 primarily to conduct scientific re3 search, and 

4 ‘‘(III) is not a private founda5 tion.’’. 

6 (I) Subsection (f) of section 197 is amend7 ed by striking ‘‘section 41(f)(1)’’ each place it 

8 appears in paragraphs (1)(C) and (9)(C)(i) and 

9 inserting ‘‘section 41(d)(1)’’. 

10 (J) Section 280C is amended— 

11 (i) by striking ‘‘41(f)’’ each place it 

12 appears in subsection (b)(3) and inserting 

13 ‘‘41(d)’’, 

14 (ii) by striking ‘‘or basic research ex15 penses (as defined in section 41(e)(2))’’ in 

16 subsection (c)(1), 

17 (iii) by striking ‘‘section 41(a)(1)’’ in 

18 subsection (c)(2)(A) and inserting ‘‘section 

19 41(a)’’, and 

20 (iv) by striking ‘‘or basic research ex21 penses’’ in subsection (c)(2)(B). 

22 (K) Subclause (IV)(c) of section 

23 936(h)(5)(C)(i) is amended by striking ‘‘section 

24 41(f)’’ and inserting ‘‘section 41(d)’’. 


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1 (L) Subparagraph (D) of section 936(j)(5) 

2 is amended by striking ‘‘section 41(f)(3)’’ and 

3 inserting ‘‘section 41(d)(3)’’. 

4 (M) Clause (i) of section 965(c)(2)(C) is 

5 amended by striking ‘‘section 41(f)(3)’’ and in6 serting ‘‘section 41(d)(3)’’. 

7 (N) Clause (i) of section 1400N(l)(7)(B) is 

8 amended by striking ‘‘section 41(g)’’ and insert9 ing ‘‘section 41(e)’’. 

10 (c) TECHNICAL CORRECTIONS.—Section 409 is 

11 amended— 

12 (1) by inserting ‘‘, as in effect before the enact13 ment of the Tax Reform Act of 1984)’’ after ‘‘sec14 tion 41(c)(1)(B)’’ in subsection (b)(1)(A), 

15 (2) by inserting ‘‘, as in effect before the enact16 ment of the Tax Reform Act of 1984’’ after ‘‘relat17 ing to the employee stock ownership credit’’ in sub18 section (b)(4), 

19 (3) by inserting ‘‘(as in effect before the enact20 ment of the Tax Reform Act of 1984)’’ after ‘‘sec21 tion 41(c)(1)(B)’’ in subsection (i)(1)(A), 

22 (4) by inserting ‘‘(as in effect before the enact23 ment of the Tax Reform Act of 1984)’’ after ‘‘sec24 tion 41(c)(1)(B)’’ in subsection (m), 


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1 (5) by inserting ‘‘(as so in effect)’’ after ‘‘sec2 tion 48(n)(1)’’ in subsection (m), 

3 (6) by inserting ‘‘(as in effect before the enact4 ment of the Tax Reform Act of 1984)’’ after ‘‘sec5 tion 48(n)’’ in subsection (q)(1), and 

6 (7) by inserting ‘‘(as in effect before the enact7 ment of the Tax Reform Act of 1984)’’ after ‘‘sec8 tion 41’’ in subsection (q)(3). 

9 (d) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), the amendments made by this section 

12 shall apply to taxable years beginning after Decem13 ber 31, 2010. 

14 (2) TECHNICAL CORRECTIONS.—The amend15 ments made by subsection (c) shall take effect on 

16 the date of the enactment of this Act. 

Æ 


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