I 
111TH CONGRESS 
1ST SESSION H. R. 4244 
To amend the Internal Revenue Code of 1986 to provide a simplified research 
tax credit for small businesses. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 8, 2009 
Mr. SCHOCK (for himself and Mr. NYE) 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 provide 
a simplified research tax credit for small businesses. 
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 ‘‘Small Business Re-
search and Experimentation Simplification Act of 2009’’. 
SEC. 2. RESEARCH TAX CREDIT. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
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‘‘SEC. 30E. SIMPLIFIED SMALL BUSINESS RESEARCH CRED-
IT. 
‘‘(a) IN GENERAL.—In the case of an eligible small 
business, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 20 percent of the qualified research expenses of 
the taxpayer for the taxable year. 
‘‘(b) QUALIFIED RESEARCH EXPENDITURES.—For 
purposes of this section, the term ‘qualified research ex-
penses’ has the meaning given such term by section 41(b), 
except that in lieu of applying paragraph (2)(C) thereof 
(defining supplies) the term ‘supplies’ means any tangible 
property other than land. 
‘‘(c) ELIGIBLE SMALL BUSINESS.—For purposes of 
this section— 
‘‘(1) IN
GENERAL.—The term ‘eligible small 
business’ means with respect to any taxable year be-
ginning in a calendar year, any employer if such em-
ployer employed an average of 500 or fewer employ-
ees on business days during the preceding calendar 
year. For purposes of the preceding sentence, a pre-
ceding calendar year may be taken into account only 
if the employer was in existence throughout such 
year. 
‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE-
CEDING YEAR.—In the case of an employer which 
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was not in existence throughout the preceding cal-
endar year, the determination under paragraph (1) 
shall be based on the average number of employees 
that it is reasonably expected such employer will em-
ploy on business days in the current calendar year. 
‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—In 
the case of a taxable year to which section 26(a)(2) does 
not apply, the credit allowed under subsection (a) for any 
taxable year shall not exceed the excess of— 
‘‘(1) the sum of the regular tax liability (as de-
fined in section 26(b)) plus the tax imposed by sec-
tion 55, over 
‘‘(2) the sum of the credits allowable under this 
subpart (other than this section and sections 23, 
25D, 30, 30B, and 30D) and section 27 for the tax-
able year. 
‘‘(e) PORTION OF CREDIT REFUNDABLE.— 
‘‘(1) IN GENERAL.—The aggregate credits al-
lowed to a taxpayer under subpart C shall be in-
creased by an amount equal to 25 percent of the ex-
cess (if any) of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
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in determining any deduction or other credit al-
lowed under this chapter. 
‘‘(B) REDUCTION IN BASIS.—For purposes 
of this subtitle, the basis of any property for 
which a credit is allowable under subsection (a) 
shall be reduced by the amount of such credit 
so allowed and attributable to such property. 
‘‘(3) SPECIAL RULE FOR PASS-THRU OF CRED-
IT.—In the case of an individual who— 
‘‘(A) owns an interest in an unincorporated 
trade or business, 
‘‘(B) is a partner in a partnership, 
‘‘(C) is a beneficiary of an estate or trust, 
or 
‘‘(D) is a shareholder in an S corporation, 
the amount determined under subsection (a) for any 
taxable year shall not exceed an amount (separately 
computed with respect to such person’s interest in 
such trade or business or entity) equal to the 
amount of tax attributable to that portion of a per-
son’s 
taxable 
income 
which 
is 
allocable 
or 
apportionable to the person’s interest in such trade 
or business or entity. 
‘‘(g) TERMINATION.—Subsection (a) shall not apply 
to taxable years beginning after December 31, 2015.’’. 
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(b) CONFORMING AMENDMENTS.— 
(1) Section 24(b)(3)(B) of such Code is amend-
ed by striking ‘‘and 30D’’ and inserting ‘‘30D, and 
30E’’. 
(2) Section 25(e)(1)(C)(ii) of such Code is 
amended by inserting ‘‘30E,’’ after ‘‘30D,’’. 
(3) Section 25A(i)(5)(B) of such Code is 
amended by striking ‘‘and 30D’’ and inserting 
‘‘30D, and 30E’’. 
(4) Section 25B(g)(2) of such Code is amended 
by striking ‘‘and 30D’’ and inserting ‘‘30D, and 
30E’’. 
(5) Section 26(a)(1) of such Code is amended 
by striking ‘‘and 30D’’ and inserting ‘‘30D, and 
30E’’. 
(6) Section 904(i) of such Code is amended by 
striking ‘‘and 30D’’ and inserting ‘‘30D, and 30E’’. 
(7) Section 1400C(d)(2) of such Code is 
amended by inserting ‘‘, and 30E’’ after ‘‘30D’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 30E. Simplified small business research credit.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
SEC. 3. GAO STUDY ON SIMPLIFIED SMALL BUSINESS RE-
SEARCH CREDIT. 
Not later than June 30, 2015, the Comptroller Gen-
eral, in consultation with the Secretary of the Treasury, 
shall submit to the Committee on Small Business of the 
House of Representatives and the Committee on Small 
Business and Entrepreneurship of the Senate a report de-
tailing the Comptroller General’s analysis of the useful-
ness and effectiveness of, and any recommended changes 
with respect to, the simplified small business research 
credit determined under section 30E of the Internal Rev-
enue Code of 1986. 
Æ 
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