‘‘(ii) relates such investment to an 
award under the Small Business Innova-
tion Research (SBIR) program under sec-
tion 9 of the Small Business Act which 
qualifies for purposes of this section, and 
‘‘(iii) contains such other information 
as the Administrator, in consultation with 
the Secretary, determines to be necessary 
or appropriate to carry out this section. 
The amount of any award under the Small 
Business Innovation Research program, once 
related under subparagraph (B) with a qualified 
equity investment, may not thereafter be avail-
able for purposes of this section. 
‘‘(2) LIMITATION BASED ON PERCENTAGE OWN-
ERSHIP.—The amount of the credit under subsection 
(a) allowed to the taxpayer with respect to a quali-
fied equity investment in a qualified technology 
small business concern shall be zero if, after such in-
vestment, the taxpayer owns (within the meaning of 
section 318) 50 percent or more of— 
‘‘(A) in the case that such concern is a 
corporation, the outstanding stock of the cor-
poration (either by vote or value), and 
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‘‘(B) in the case that such concern is not 
a corporation, the capital and profits interests 
of such concern. 
‘‘(c) QUALIFIED EQUITY INVESTMENT.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified equity 
investment’ means any equity investment in a quali-
fied technology small business concern made during 
the investment period if such investment is acquired 
by the taxpayer at its original issue (directly or 
through an underwriter) solely in exchange for cash. 
‘‘(2) EQUITY INVESTMENT.—The term ‘equity 
investment’ means— 
‘‘(A) any stock (other than nonqualified 
preferred stock, as defined in section 351(g)(2)) 
in an entity which is a corporation, and 
‘‘(B) any capital or profits interest in an 
entity which is not a corporation. 
‘‘(3) QUALIFIED TECHNOLOGY SMALL BUSINESS 
CONCERN.—The term ‘qualified technology small 
business concern’ means, with respect to any taxable 
year, any small business concern (as defined in sec-
tion 3 of the Small Business Act) if such concern— 
‘‘(A) is engaged in a high technology or 
biotechnology trade or business, and 
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‘‘(B) employs an average of fewer than 
500 employees on business days during such 
year. 
‘‘(4) INVESTMENT PERIOD.—The term ‘invest-
ment period’ means the period— 
‘‘(A) beginning on the date the qualified 
technology small business concern first receives 
funds pursuant to a funding agreement under 
the 
Small 
Business 
Innovation 
Research 
(SBIR) program under section 9 of the Small 
Business Act, and 
‘‘(B) ending on the last day of the 18- 
month period beginning on the date on which 
such funding agreement ceases to be in effect. 
‘‘(d) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—Except as provided in 
paragraph (2), the credit which would be allowed 
under subsection (a) for any taxable year (deter-
mined without regard to this subsection) shall be 
treated as a credit listed in section 38(b) for such 
taxable year (and not allowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who elects the application of this para-
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graph, for purposes of this title, the credit al-
lowed under subsection (a) for any taxable year 
(determined after application of paragraph (1)) 
shall be treated as a credit allowable under sub-
part A for such taxable year. 
‘‘(B) LIMITATION BASED ON AMOUNT OF 
TAX.—In the case of a taxable year to which 
section 26(a)(2) does not apply, the credit al-
lowed under subpart A for any taxable year (de-
termined after application of paragraph (1)) by 
reason of subparagraph (A) shall not exceed the 
excess of— 
‘‘(i) the sum of the regular tax liabil-
ity (as defined in section 26(b)) plus the 
tax imposed by section 55, over 
‘‘(ii) the sum of the credits allowable 
under subpart A (other than this section) 
and section 27 for the taxable year. 
‘‘(C) CARRYFORWARD OF UNUSED CRED-
IT.—If the credit allowable under subsection (a) 
by reason of subparagraph (A) exceeds the limi-
tation imposed by section 26(a)(1) or subpara-
graph (B), whichever is applicable, for such tax-
able year, reduced by the sum of the credits al-
lowable under subpart A (other than this sec-
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tion) for such taxable year, such excess shall be 
carried to each of the succeeding 20 taxable 
years to the extent that such unused credit may 
not be taken into account under subsection (a) 
by reason of subparagraph (A) for a prior tax-
able year because of such limitation. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) RELATED PARTIES.—For purposes of this 
section— 
‘‘(A) IN
GENERAL.—All related persons 
shall be treated as 1 person. 
‘‘(B) RELATED PERSONS.—A person shall 
be treated as related to another person if the 
relationship between such persons would result 
in the disallowance of losses under section 267 
or 707(b). 
‘‘(2) BASIS.—For purposes of this subtitle, the 
basis of any investment with respect to which a cred-
it is allowable under this section shall be reduced by 
the amount of such credit so allowed. 
‘‘(3) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any qualified equity investment which is held by the 
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taxpayer less than 3 years, except that no benefit 
shall be recaptured in the case of— 
‘‘(A) transfer of such investment by reason 
of the death of the taxpayer, 
‘‘(B) transfer between spouses, or 
‘‘(C) transfer incident to the divorce (as 
defined in section 1041) of such taxpayer. 
‘‘(f) 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, and 
‘‘(2) which impose appropriate reporting re-
quirements.’’. 
(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 (35), by striking the 
period at the end of paragraph (36) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(37) the portion of the qualified equity invest-
ment credit to which section 30E(d)(1) applies.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1016(a) of such Code is amended 
by striking ‘‘and’’ at the end of paragraph (36), by 
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striking the period at the end of paragraph (37) and 
inserting ‘‘, and’’, and by inserting after paragraph 
(37) the following new paragraph: 
‘‘(38) to the extent provided in section 
30E(d)(2).’’. 
(2) Section 24(b)(3)(B) of such Code is amend-
ed by striking ‘‘and 30D’’ and inserting ‘‘30D, and 
30E’’. 
(3) Section 25(e)(1)(C)(ii) of such Code is 
amended by inserting ‘‘30E,’’ after ‘‘30D,’’. 
(4) Section 25A(i)(5)(B) of such Code is 
amended by striking ‘‘and 30D’’ and inserting ‘‘, 
30D, and 30E’’. 
(5) Section 25A(i)(5) of such Code is amended 
by inserting ‘‘30E,’’ after ‘‘30D,’’. 
(6) Section 25B(g)(2) of such Code is amended 
by striking ‘‘and 30D’’ and inserting ‘‘30D, and 
30E’’. 
(7) Section 26(a)(1) of such Code is amended 
by striking ‘‘and 30D’’ and inserting ‘‘30D, and 
30E’’. 
(8) Section 30(c)(2)(B)(ii) of such Code is 
amended by striking ‘‘and 30D’’ and inserting ‘‘, 
30D, and 30E’’. 
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(9) Section 30B(g)(2)(B)(ii) of such Code is 
amended by striking ‘‘and 30D’’ and inserting 
‘‘30D, and 30E’’. 
(10) Section 30D(d)(2)(B)(ii) of such Code is 
amended by striking ‘‘and 25D’’ and inserting ‘‘, 
25D, and 30E’’. 
(11) Section 904(i) of such Code is amended by 
striking ‘‘and 30D’’ and inserting ‘‘30D, and 30E’’. 
(12) Section 1400C(d)(2) of such Code is 
amended by striking ‘‘and 30D’’ and inserting 
‘‘30D, and 30E’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 30D the following new item: 
‘‘Sec. 30E. Investments in high technology and biotechnology business concerns 
developing innovative technologies.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to investments made after Decem-
ber 31, 2010, in taxable years ending after such date. 
Æ 
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