‘‘(A) the aggregate decrease in the credits 
allowed to the taxpayer under section 38 for all 
prior taxable years which would have resulted if 
no credit had been determined under this sec-
tion with respect to such investment, plus 
‘‘(B) interest at the underpayment rate es-
tablished under section 6621 on the amount de-
termined under subparagraph (A) for each 
prior taxable year for the period beginning on 
the due date for filing the return for the prior 
taxable year involved. 
No deduction shall be allowed under this chapter for 
interest described in subparagraph (B). 
‘‘(3) RECAPTURE
EVENT.—For purposes of 
paragraph (1), there is a recapture event with re-
spect to an equity investment in a qualified research 
entity if— 
‘‘(A) such entity ceases to be a qualified 
research entity, 
‘‘(B) the proceeds of the investment cease 
to be used as required of subsection (b)(1)(B), 
or 
‘‘(C) such investment is redeemed by such 
entity. 
‘‘(4) SPECIAL RULES.— 
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‘‘(A) TAX
BENEFIT
RULE.—The tax for 
the taxable year shall be increased under para-
graph (1) only with respect to credits allowed 
by reason of this section which were used to re-
duce tax liability. In the case of credits not so 
used to reduce tax liability, the carryforwards 
and carrybacks under section 39 shall be appro-
priately adjusted. 
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease in tax under this subsection shall not be 
treated as a tax imposed by this chapter for 
purposes of determining the amount of any 
credit under this chapter or for purposes of sec-
tion 55. 
‘‘(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 provide rules for determining wheth-
er the requirement of subsection (b)(1)(B) is treated 
as met, 
‘‘(3) which impose appropriate reporting re-
quirements, and 
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‘‘(4) which apply the provisions of this section 
to newly formed entities.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of the Internal Revenue Code of 1986 (relating 
to current year business credit) is amended by striking 
‘‘and’’ at the end of paragraph (29), by striking the period 
at the end of paragraph (30) and inserting ‘‘, plus’’, and 
by adding at the end the following new paragraph: 
‘‘(31) the credit determined under section 
45N(a).’’. 
(c) CONFORMING AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of chapter 
1 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new item: 
‘‘Sec. 45N. Research investment tax credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to investments made after Decem-
ber 31, 2006. 
SEC. 4. TAX-EXEMPT FINANCING OF RESEARCH PARK FA-
CILITIES. 
(a) IN GENERAL.—Subsection (a) of section 142 is 
amended— 
(1) by striking ‘‘or’’ at the end of paragraph 
(14), 
(2) by striking the period at the end of para-
graph (15) and inserting ‘‘, or’’, and 
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(3) by inserting at the end the following new 
paragraph: 
‘‘(16) research park facility.’’. 
(b) DEFINITION.—Section 142 is amended by insert-
ing at the end the following new subsection: 
‘‘(n) RESEARCH PARK FACILITY.—For purposes of 
subsection (a)(16), the term ‘research park facility’ means 
a facility (including buildings, land, or other structures) 
which is used in connection with research and experimen-
tation (as defined in section 168(i)(11)). For purposes of 
the preceding sentence, such term includes facilities which 
are directly related and ancillary to a research park facil-
ity (determined without regard to this sentence) if— 
‘‘(1) such facilities are located on the same site 
as the research park facility, and 
‘‘(2) not more than 25 percent of the net pro-
ceeds of the issue are used to provide such facili-
ties.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to bonds issued on 
or after the date of the enactment of this Act. 
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SEC. 5. CLARIFICATION OF APPLICATION OF PRIVATE AC-
TIVITY BOND RULES WITH RESPECT TO 
FUNDING OF FEDERAL RESEARCH AGREE-
MENTS. 
Not later than June 30, 2007, the Secretary of the 
Treasury shall prescribe guidance identifying the cir-
cumstances, if any, in which the rights of the Federal Gov-
ernment granted under chapter 18 of title 35, United 
States Code (commonly known as the Bayh-Dole Act 
(Pub. Law No. 96–517)) constitute private business use 
under the private activity bond rules in section 141 of the 
Internal Revenue Code of 1986. 
Æ 
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