I 
111TH CONGRESS 
2D SESSION 
H. R. 4769 
To amend the Internal Revenue Code of 1986 to allow a credit against 
income tax for equity investments in high technology small business concerns. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 4, 2010 
Mr. HOLT (for himself, Ms. LINDA T. SA´NCHEZ of California, and Mr. HIN-
CHEY) 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 a 
credit against income tax for equity investments in high 
technology small business concerns. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Creating Jobs From 
Innovative Small Businesses Act of 2010’’. 
SEC. 2. CREDIT FOR INVESTMENTS IN SMALL TECHNOLOGY 
INNOVATION COMPANIES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding after section 45Q the following 
new section: 
‘‘SEC. 45R. HIGH TECHNOLOGY INVESTMENT TAX CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 38, the high technology investment tax credit deter-
mined under this section for the taxable year is an amount 
equal to 20 percent of the amount paid by the taxpayer 
during such year to acquire a qualified equity investment 
in a qualified high technology small business concern. 
‘‘(b) MAXIMUM CREDIT.— 
‘‘(1) IN GENERAL.—The taxpayer’s credit de-
termined under this section for the taxable year 
shall not exceed the excess (if any) of— 
‘‘(A) $100,000, over 
‘‘(B) the taxpayer’s (and any prede-
cessor’s) aggregate credit determined under this 
section for all prior taxable years. 
‘‘(2) RELATED PARTIES.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), all related persons shall be treated as 
1 person, and the dollar amount in paragraph 
(1)(A) shall be allocated among such persons 
under regulations prescribed by the Secretary. 
‘‘(B) RELATED PERSONS.—A person shall 
be treated as related to another person if the 
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relationship between such persons would result 
in the disallowance of losses under section 267 
or 707(b). 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED EQUITY INVESTMENT.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
equity investment’ means any equity investment 
in a qualified high technology small business 
concern if— 
‘‘(i) such investment is acquired by 
the taxpayer at its original issue (directly 
or through an underwriter) solely in ex-
change for cash, and 
‘‘(ii) such investment is designated for 
purposes of this section by such concern. 
‘‘(B) EQUITY
INVESTMENT.—The term 
‘equity investment’ means— 
‘‘(i) any stock (other than non-
qualified preferred stock as defined in sec-
tion 351(g)(2)) in an entity which is a cor-
poration, and 
‘‘(ii) any capital interest in an entity 
which is a partnership. 
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‘‘(C) REDEMPTIONS.—A rule similar to the 
rule of section 1202(c)(3) shall apply for pur-
poses of this subsection. 
‘‘(2) QUALIFIED
HIGH
TECHNOLOGY
SMALL 
BUSINESS CONCERN.—The term ‘qualified high tech-
nology small business concern’ means, with respect 
to any taxable year, any small business concern (as 
defined in section 3 of the Small Business Act) if— 
‘‘(A) such concern employs an average of 
fewer than 500 employees on business days dur-
ing such year, and 
‘‘(B) at least 50 percent of the gross ex-
penditures of such entity for such year are re-
search or experimental expenditures under sec-
tion 174. 
‘‘(d) NATIONAL LIMITATION ON AMOUNT OF INVEST-
MENTS DESIGNATED.— 
‘‘(1) IN GENERAL.—There is a high technology 
investment tax credit limitation for each calendar 
year. Such limitation is— 
‘‘(A) $500,000,000 for 2010, 
‘‘(B) $750,000,000 for 2011 and 2012, 
and 
‘‘(C) $1,000,000,000 for 2013 and 2014. 
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‘‘(2) ALLOCATION OF LIMITATION.—The limita-
tion under paragraph (1) shall be allocated by the 
Secretary among qualified high technology small 
business concerns selected by the Secretary. 
‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If 
the high technology investment tax credit limitation 
for any calendar year exceeds the aggregate amount 
allocated under paragraph (2) for such year, such 
limitation for the succeeding calendar year shall be 
increased by the amount of such excess. No amount 
may be carried under the preceding sentence to any 
calendar year after 2020. 
‘‘(e) CERTAIN TAXPAYERS NOT ELIGIBLE.—No cred-
it shall be determined under this section for any equity 
investment in any qualified high technology small business 
concern made by any individual who, at the time of the 
investment, is— 
‘‘(1) an employee of such concern, or 
‘‘(2) a member of the family (within the mean-
ing of section 267(c)(4)) of an employee of such con-
cern. 
‘‘(f) BASIS REDUCTION.—The basis of any qualified 
equity investment shall be reduced by the amount of any 
credit determined under this section with respect to such 
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investment. This subsection shall not apply for purposes 
of sections 1202, 1400B, and 1400F. 
‘‘(g) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be appropriate to carry out this 
section, including regulations— 
‘‘(1) which prevent the abuse of the purposes of 
this section, 
‘‘(2) which impose appropriate reporting re-
quirements, and 
‘‘(3) which apply the provisions of this section 
to newly formed entities.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code (re-
lating to current year business credit) is amended by strik-
ing ‘‘plus’’ at the end of paragraph (34), by striking the 
period at the end of paragraph (35) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(36) the high technology investment tax credit 
determined under section 45R.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 45Q the following new item: 
‘‘Sec. 45R. High technology investment tax credit.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to investments made after Decem-
ber 31, 2009, in taxable years ending after such date. 
Æ 
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