I 
116TH CONGRESS 
2D SESSION 
H. R. 6713 
To amend the Internal Revenue Code of 1986 to expand and modify the 
credit for increasing research activities, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 5, 2020 
Ms. DELBENE (for herself and Mrs. WALORSKI) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Small Business, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to expand 
and modify the credit for increasing research activities, 
and for other purposes. 
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 ‘‘Furthering Our Recov-
ery With American Research & Development Act’’ or the 
‘‘FORWARD Act’’. 
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SEC. 2. TREATMENT OF CREDIT FOR QUALIFIED SMALL 
BUSINESSES. 
(a) GROSS RECEIPTS TEST.— 
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
41(h)(3)(A) of the Internal Revenue Code of 1986 
is amended— 
(A) by striking ‘‘$5,000,000’’ in subclause 
(I) and inserting ‘‘$20,000,000’’; and 
(B) by striking ‘‘gross receipts’’ in sub-
clause (II) and inserting ‘‘gross receipts in ex-
cess of $25,000’’. 
(2) DEFINITION OF GROSS RECEIPTS.— 
(A) IN
GENERAL.—Clause (i) of section 
41(h)(3)(A)(i) of such Code, as amended by 
paragraph (1), is further amended— 
(i) by striking ‘‘(as determined under 
the rules of section 448(c)(3), without re-
gard to subparagraph (A) thereof)’’ in sub-
clause (I); and 
(ii) by striking ‘‘(as so determined)’’ 
in subclause (II). 
(B) DEFINITION.—Subparagraph (A) of 
section 41(h)(3) of such Code, as so amended, 
is further amended by adding at the end the 
following flush sentence: 
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‘‘For purposes of the preceding sentence, gross 
receipts shall be determined under the rules of 
section 448(c)(3) without regard to subpara-
graph (A) thereof, except that such term shall 
not include any contributions to the capital of 
a corporation (other than contributions by a 
shareholder) or any amount described in section 
118(b) (other than receipts from customers in 
exchange for goods or services).’’. 
(b) STARTUP
DATE.—Subclause (II) of section 
41(h)(3)(A)(i) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘5-taxable-year period’’ and inserting 
‘‘8-taxable-year period’’. 
(c) LIMITATION ON ELECTION AMOUNT.—Clause (i) 
of section 41(h)(4)(B) of the Internal Revenue Code of 
1986 is amended by striking ‘‘$250,000’’ and inserting 
‘‘$1,000,000’’. 
(d) LIMITATION ON ELECTION.—Clause (ii) of sec-
tion 41(h)(4)(B) of the Internal Revenue Code of 1986 
is amended by striking ‘‘5 or more’’ and inserting ‘‘8 or 
more’’. 
(e) PAYROLL TAX CREDIT PORTION.—Paragraph (2) 
of section 41(h) of the Internal Revenue Code of 1986 
is amended— 
(1) by striking subparagraph (C); 
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(2) by adding ‘‘or’’ at the end of subparagraph 
(A); and 
(3) by striking ‘‘, or’’ at the end of subpara-
graph (B) and inserting a period. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
SEC. 3. INCLUSION OF EMPLOYEE TRAINING EXPENSES. 
(a) IN GENERAL.—Paragraph (1) of section 41(b) of 
the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (A); 
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘, and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) employee training expenses.’’. 
(b) EMPLOYEE TRAINING EXPENSES.—Subsection 
(b) of section 41 of the Internal Revenue Code of 1986 
is amended— 
(1) by redesignating paragraph (4) as para-
graph (5); and 
(2) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) EMPLOYEE TRAINING EXPENSES.— 
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‘‘(A) IN
GENERAL.—The term ‘employee 
training expenses’ means any wages paid or in-
curred to an employee in connection with train-
ing for the employee to perform qualified serv-
ices described in clause (i) or (ii) of paragraph 
(2)(B). Such term does not include wages paid 
or incurred in connection with general employer 
training which does not specifically pertain to 
such qualified services. 
‘‘(B) WAGES, ETC.—For purposes of this 
paragraph— 
‘‘(i) IN GENERAL.—The term ‘wages’ 
shall not include any amount taken into 
account under paragraph (2)(A)(i). 
‘‘(ii) RULES.—The rules of paragraph 
(2)(D) shall apply.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenses paid or incurred in 
taxable years beginning after December 31, 2019. 
SEC. 4. INCREASED CREDIT RATE FOR CERTAIN RESEARCH 
ACTIVITIES. 
(a) IN GENERAL.—Section 41 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
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‘‘(i) SPECIAL RULES FOR CERTAIN HIGH-BENEFIT 
RESEARCH ACTIVITIES.— 
‘‘(1) CERTAIN COLLABORATIVE RESEARCH.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified research expenses described in sub-
paragraph (B), as applicable— 
‘‘(i) subsection (a)(1) shall be applied 
by substituting ‘25 percent’ for ‘20 per-
cent’, 
‘‘(ii) subsection (c)(4)(A) shall be ap-
plied by substituting ‘17.5 percent’ for ‘14 
percent’, and 
‘‘(iii) subsection (c)(4)(B)(ii) shall be 
applied by substituting ‘7.5 percent’ for ‘6 
percent’. 
‘‘(B) EXPENSES DESCRIBED.— 
‘‘(i) IN GENERAL.—Qualified research 
expenses described in this subparagraph 
are qualified research expenses incurred by 
the taxpayer with respect to qualified re-
search in collaboration with one or more 
other entities, which may include a quali-
fied organization described in subpara-
graph (A), (B), or (C) of subsection (e)(6), 
an organization which is a Federal labora-
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tory (within the meaning of subsection 
(b)(3)(D)(i)(III)), or a qualified research 
consortium 
(as 
defined 
in 
subsection 
(b)(3)(C)(ii)). 
‘‘(ii) 
CONTRIBUTION
REQUIRE-
MENT.—A collaboration shall be taken into 
account under clause (i) only if each entity 
involved in the collaboration provides or 
performs more than 1⁄2 of its pro rata 
share of the work hours for the research. 
‘‘(2) RESEARCH BY UNITED STATES MANUFAC-
TURERS.— 
‘‘(A) IN GENERAL.—In the case of a quali-
fied domestic manufacturer, this section shall 
be applied— 
‘‘(i) by increasing the 20 percent 
amount in subsection (a)(1) by the bonus 
amount, 
‘‘(ii) by increasing the 14 percent 
amount under subsection (c)(4)(A) by the 
alternative simplified bonus amount, and 
‘‘(iii) by increasing the 6 percent 
amount under subsection (c)(4)(B)(ii) by 
the subsection (c)(4)(B) bonus amount. 
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‘‘(B) QUALIFIED
DOMESTIC
MANUFAC-
TURER.—For purposes of this subsection— 
‘‘(i) IN GENERAL.—The term ‘quali-
fied domestic manufacturer’ means a tax-
payer who has domestic production gross 
receipts which are more than 50 percent of 
total gross receipts. 
‘‘(ii) DOMESTIC
PRODUCTION
GROSS 
RECEIPTS.—The term ‘domestic production 
gross receipts’ has the meaning given to 
such term under section 199(c)(4) (as in 
effect on December 31, 2017). 
‘‘(C) BONUS AMOUNT; ALTERNATIVE SIM-
PLIFIED
BONUS
AMOUNT; 
SUBSECTION 
(c)(4)(B) AMOUNT.—For purposes of subpara-
graph (A): 
‘‘If the 
percentage 
of total gross 
receipts 
which are 
domestic 
production 
gross 
receipts is: 
The 
bonus 
amount 
is the 
following 
number of 
percentage 
points: 
The 
alternative 
simplified 
bonus 
amount 
is the 
following 
number of 
percentage 
points: 
The 
subsection 
(c)(4)(B) 
bonus 
amount 
is the 
following 
number of 
percentage 
points: 
More than 50% but 
not more than 60% 
0.7 
0.3
More than 60% but 
not more than 70% 
1.4 
0.6
More than 70% but 
not more than 80% 
2.1 
0.9
More than 80% but 
not more than 90% 
2.8 
1.2
More than 90% .........
3.5 
1.5.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
SEC. 5. TRANSFERS TO FEDERAL OLD-AGE AND SURVIVORS 
INSURANCE TRUST FUND. 
There are hereby appropriated to the Federal Old- 
Age and Survivors Trust Fund and the Federal Disability 
Insurance Trust Fund established under section 201 of 
the Social Security Act (42 U.S.C. 401) amounts equal 
to the reduction in revenues to the Treasury from the 
taxes under section 3111(a) of the Internal Revenue Code 
of 1986 by reason of the amendments made by sections 
2, 3, and 4. Amounts appropriated by the preceding sen-
tence shall be transferred from the general fund at such 
times and in such manner as to replicate to the extent 
possible the transfers which would have occurred to such 
Trust Fund had such amendments not been enacted. 
SEC. 6. SUPPORT FOR SMALL BUSINESS RESEARCH AND 
DEVELOPMENT. 
(a) DEFINITIONS.—In this section— 
(1) the term ‘‘Administrator’’ means the Ad-
ministrator of the Small Business Administration; 
(2) the term ‘‘Commissioner’’ means the Com-
missioner of Internal Revenue; 
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(3) the term ‘‘small business concern’’ has the 
meaning given the term in section 3(a) of the Small 
Business Act (15 U.S.C. 632(a)); and 
(4) the term ‘‘small business development cen-
ter’’ means a small business development center de-
scribed in section 21 of the Small Business Act (15 
U.S.C. 648). 
(b) IRS AND SBA PARTNERSHIPS.—Beginning not 
later than 180 days after the date of enactment of this 
Act, the Commissioner, in consultation with the Adminis-
trator, shall develop partnership agreements that— 
(1) provide for the development of— 
(A) basic training, including in-person or 
modular training sessions, relating to Federal 
income tax credits that benefit small business 
concerns and startups, especially credits for re-
search and experimentation; and 
(B) informational materials relating to 
such credits, including Internal Revenue Service 
guidance documents; 
(2) provide the basic training and informational 
materials developed under paragraph (1)— 
(A) through electronic resources, including 
internet-based webinars; and 
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(B) at physical locations, including small 
business development centers; and 
(3) make such materials available to— 
(A) business development programs admin-
istered by the Small Business Administration, 
including women’s business centers, Veteran 
Business Outreach Centers, and U.S. Export 
Assistance Centers, and nonprofit research 
partners such as the Service Corps of Retired 
Executives authorized under section 8(b)(1)(B) 
of 
the 
Small 
Business 
Act 
(15 
U.S.C. 
637(b)(1)(B)); and 
(B) business development entities that 
partner with Small Business Administration 
programs, including universities, nonprofits, 
business incubators, and business accelerators. 
(c) REPORTING REQUIREMENT.—Not later than 180 
days after the date of enactment of this Act, the Commis-
sioner, in consultation with the Administrator, shall sub-
mit to Congress a report describing how the Internal Rev-
enue Service in partnership with the Small Business Ad-
ministration will provide outreach and educational mate-
rials to small business concerns, businesses of medium 
size, and startups regarding section 41(h) of the Internal 
Revenue Code of 1986. 
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(d) SMALL BUSINESS DEVELOPMENT CENTERS.— 
Section 21(c)(3) of the Small Business Act (15 U.S.C. 
648(c)(3)) is amended— 
(1) in subparagraph (T), by striking ‘‘and’’ at 
the end; 
(2) in the first subparagraph (U) (relating to 
encouraging and assisting the provision of succession 
planning), by striking the period at the end of clause 
(v) and inserting a semicolon; 
(3) in the second subparagraph (U) (relating to 
providing training in conjunction with the United 
States Patent and Trademark Office)— 
(A) by redesignating that subparagraph as 
subparagraph (V); and 
(B) in clause (ii)(II), by striking the period 
at the end and inserting ‘‘; and’’; and 
(4) by adding at the end the following: 
‘‘(W) in conjunction with the Internal Rev-
enue Service, providing informational materials, 
education, and basic training— 
‘‘(i) to small business concerns relat-
ing to Federal income tax credits available 
under the Internal Revenue Code of 1986, 
including— 
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‘‘(I) credits available to busi-
nesses generally; and 
‘‘(II) credits available to small 
business concerns and startups spe-
cifically, especially credits for research 
and experimentation; and 
‘‘(ii) that may be delivered— 
‘‘(I) in person; or 
‘‘(II) through a website.’’. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated $2,000,000 per year to 
carry out the requirements of this section. 
Æ 
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