I 
112TH CONGRESS 
2D SESSION 
H. R. 6109 
To amend the Internal Revenue Code of 1986 to extend the research and 
development tax credit, to limit treaty benefits with respect to certain 
deductible related-party payments, and to treat general aviation aircraft 
as 7-year property. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 12, 2012 
Mr. LEVIN (for himself, Mr. RANGEL, Mr. MCDERMOTT, Mr. LEWIS of Geor-
gia, Mr. NEAL, Mr. BECERRA, Mr. BLUMENAUER, Mr. KIND, Mr. PAS-
CRELL, Mr. CROWLEY, and Ms. BERKLEY) 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 extend 
the research and development tax credit, to limit treaty 
benefits with respect to certain deductible related-party 
payments, and to treat general aviation aircraft as 7- 
year property. 
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 ‘‘Investing in American 
Innovation Act of 2012’’. 
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SEC. 2. EXTENSION OF RESEARCH AND DEVELOPMENT TAX 
CREDIT. 
(a) IN GENERAL.—Subparagraph (B) of section 
41(h)(1) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘December 31, 2011’’ and inserting ‘‘Decem-
ber 31, 2012’’. 
(b) CONFORMING AMENDMENT.—Subparagraph (D) 
of section 45C(b)(1) of such Code is amended by striking 
‘‘December 31, 2011’’ and inserting ‘‘December 31, 
2012’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
December 31, 2011. 
SEC. 3. LIMITATION ON TREATY BENEFITS FOR CERTAIN 
DEDUCTIBLE PAYMENTS. 
(a) IN GENERAL.—Section 894 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(d) LIMITATION ON TREATY BENEFITS FOR CER-
TAIN DEDUCTIBLE PAYMENTS.— 
‘‘(1) IN GENERAL.—In the case of any deduct-
ible related-party payment, any withholding tax im-
posed under chapter 3 (and any tax imposed under 
subpart A or B of this part) with respect to such 
payment may not be reduced under any treaty of the 
United States unless any such withholding tax would 
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be reduced under a treaty of the United States if 
such payment were made directly to the foreign par-
ent corporation. 
‘‘(2) 
DEDUCTIBLE
RELATED-PARTY
PAY-
MENT.—For purposes of this subsection, the term 
‘deductible related-party payment’ means any pay-
ment made, directly or indirectly, by any person to 
any other person if the payment is allowable as a de-
duction under this chapter and both persons are 
members of the same foreign controlled group of en-
tities. 
‘‘(3) FOREIGN CONTROLLED GROUP OF ENTI-
TIES.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘foreign 
controlled group of entities’ means a controlled 
group of entities the common parent of which 
is a foreign corporation. 
‘‘(B) CONTROLLED GROUP OF ENTITIES.— 
The term ‘controlled group of entities’ means a 
controlled group of corporations as defined in 
section 1563(a)(1), except that— 
‘‘(i) ‘more than 50 percent’ shall be 
substituted for ‘at least 80 percent’ each 
place it appears therein, and 
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‘‘(ii) the determination shall be made 
without regard to subsections (a)(4) and 
(b)(2) of section 1563. 
A partnership or any other entity (other than a 
corporation) shall be treated as a member of a 
controlled group of entities if such entity is con-
trolled 
(within 
the 
meaning 
of 
section 
954(d)(3)) by members of such group (includ-
ing any entity treated as a member of such 
group by reason of this sentence). 
‘‘(4) FOREIGN
PARENT
CORPORATION.—For 
purposes of this subsection, the term ‘foreign parent 
corporation’ means, with respect to any deductible 
related-party payment, the common parent of the 
foreign controlled group of entities referred to in 
paragraph (3)(A). 
‘‘(5) REGULATIONS.—The Secretary may pre-
scribe such regulations or other guidance as are nec-
essary or appropriate to carry out the purposes of 
this subsection, including regulations or other guid-
ance which provide for— 
‘‘(A) the treatment of two or more persons 
as members of a foreign controlled group of en-
tities if such persons would be the common par-
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ent of such group if treated as one corporation, 
and 
‘‘(B) the treatment of any member of a 
foreign controlled group of entities as the com-
mon parent of such group if such treatment is 
appropriate taking into account the economic 
relationships among such entities.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to payments made after the date 
of the enactment of this Act. 
SEC. 4. GENERAL AVIATION AIRCRAFT TREATED AS 7-YEAR 
PROPERTY. 
(a) IN GENERAL.—Subparagraph (C) of section 
168(e)(3) of the Internal Revenue Code of 1986 is amend-
ed by striking ‘‘and’’ at the end of clause (iv), by redesig-
nating clause (v) as clause (vi), and by inserting after 
clause (iv) the following new clause: 
‘‘(v) any general aviation aircraft, 
and’’. 
(b) CLASS LIFE.—Paragraph (3) of section 168(g) 
of such Code is amended by inserting after subparagraph 
(E) the following new subparagraph: 
‘‘(F) GENERAL
AVIATION
AIRCRAFT.—In 
the case of any general aviation aircraft, the re-
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covery period used for purposes of paragraph 
(2) shall be 12 years.’’. 
(c) GENERAL AVIATION AIRCRAFT.—Subsection (i) 
of section 168 such Code is amended by inserting after 
paragraph (19) the following new paragraph: 
‘‘(20) GENERAL
AVIATION
AIRCRAFT.—The 
term ‘general aviation aircraft’ means any airplane 
or helicopter (including airframes and engines) not 
used in commercial or contract carrying of pas-
sengers or freight, but which primarily engages in 
the carrying of passengers.’’. 
(d) EFFECTIVE DATE.—This section shall be effec-
tive for property placed in service after December 31, 
2012. 
Æ 
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