IB 
Union Calendar No. 319 
113TH CONGRESS 
2D SESSION 
H. R. 4438 
[Report No. 113–431] 
To amend the Internal Revenue Code of 1986 to simplify and make 
permanent the research credit. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 9, 2014 
Mr. BRADY of Texas (for himself, Mr. LARSON of Connecticut, Mr. PAULSEN, 
Ms. ESHOO, Mr. MCCAUL, Ms. MATSUI, Mr. SAM JOHNSON of Texas, 
Mr. NEAL, and Mr. SCHOCK) introduced the following bill; which was re-
ferred to the Committee on Ways and Means 
MAY 2, 2014 
Additional sponsors: Mr. BEN RAY LUJA´N of New Mexico, Ms. JENKINS, Mr. 
REED, Ms. LINDA T. SA´NCHEZ of California, Mr. KELLY of Pennsyl-
vania, Mr. BOUSTANY, Mr. FRANKS of Arizona, Mr. YOUNG of Indiana, 
Mr. MARINO, Mr. HONDA, Mr. GRIFFIN of Arkansas, Mr. KIND, Mr. 
SWALWELL of California, Mr. COFFMAN, and Mr. JONES 
MAY 2, 2014 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on April 9, 2014] 
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A BILL 
To amend the Internal Revenue Code of 1986 to simplify 
and make permanent the research credit. 
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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 ‘‘American Research and 
Competitiveness Act of 2014’’. 
SEC. 2. RESEARCH CREDIT SIMPLIFIED AND MADE PERMA-
NENT. 
(a) IN GENERAL.—Subsection (a) of section 41 of the 
Internal Revenue Code of 1986 is amended to read as fol-
lows: 
‘‘(a) IN GENERAL.—For purposes of section 38, the re-
search credit determined under this section for the taxable 
year shall be an amount equal to the sum of— 
‘‘(1) 20 percent of so much of the qualified re-
search expenses for the taxable year as exceeds 50 per-
cent of the average qualified research expenses for the 
3 taxable years preceding the taxable year for which 
the credit is being determined, 
‘‘(2) 20 percent of so much of the basic research 
payments for the taxable year as exceeds 50 percent 
of the average basic research payments for the 3 tax-
able years preceding the taxable year for which the 
credit is being determined, plus 
‘‘(3) 20 percent of the amounts paid or incurred 
by the taxpayer in carrying on any trade or business 
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of the taxpayer during the taxable year (including as 
contributions) to an energy research consortium for 
energy research.’’. 
(b) REPEAL OF TERMINATION.—Section 41 of such 
Code is amended by striking subsection (h). 
(c) CONFORMING AMENDMENTS.— 
(1) Subsection (c) of section 41 of such Code is 
amended to read as follows: 
‘‘(c) DETERMINATION OF AVERAGE RESEARCH EX-
PENSES FOR PRIOR YEARS.— 
‘‘(1) SPECIAL RULE IN CASE OF NO QUALIFIED 
RESEARCH EXPENDITURES IN ANY OF 3 PRECEDING 
TAXABLE YEARS.—In any case in which the taxpayer 
has no qualified research expenses in any one of the 
3 taxable years preceding the taxable year for which 
the credit is being determined, the amount determined 
under subsection (a)(1) for such taxable year shall be 
equal to 10 percent of the qualified research expenses 
for the taxable year. 
‘‘(2) CONSISTENT TREATMENT OF EXPENSES.— 
‘‘(A) IN GENERAL.—Notwithstanding wheth-
er the period for filing a claim for credit or re-
fund has expired for any taxable year taken into 
account in determining the average qualified re-
search expenses, or average basic research pay-
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thereof, as clauses (iii), (iv), and (v), respec-
tively, 
(iii) by striking ‘‘and (iv)’’ each place it 
appears in subparagraph (A)(iv) (as so redesig-
nated) and inserting ‘‘and (iii)’’, 
(iv) by striking subclause (IV) of subpara-
graph (A)(iv) (as so redesignated), by striking ‘‘, 
and’’ at the end of subparagraph (A)(iv)(III) (as 
so redesignated) and inserting a period, and by 
adding ‘‘and’’ at the end of subparagraph 
(A)(iv)(II) (as so redesignated), 
(v) by striking ‘‘(A)(vi)’’ in subparagraph 
(B) and inserting ‘‘(A)(v)’’, and 
(vi) by striking ‘‘(A)(iv)(II)’’ in subpara-
graph (B)(i)(II) and inserting ‘‘(A)(iii)(II)’’, 
(B) by striking ‘‘, and the gross receipts of 
the predecessor,’’ in subparagraph (A)(iv)(II) (as 
so redesignated), 
(C) by striking ‘‘, and the gross receipts of,’’ 
in subparagraph (B), 
(D) by striking ‘‘, or gross receipts of,’’ in 
subparagraph (B)(i)(I), and 
(E) by striking subparagraph (C). 
(d) EFFECTIVE DATE.— 
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(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to taxable years beginning after December 31, 
2013. 
(2) SUBSECTION (b).—The amendment made by 
subsection (b) shall apply to amounts paid or in-
curred after December 31, 2013. 
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Union Calendar No. 319 
113TH CONGRESS 
2D SESSION 
H. R. 4438 
[Report No. 113–431] 
A BILL 
To amend the Internal Revenue Code of 1986 to 
simplify and make permanent the research credit. 
MAY 2, 2014 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
VerDate Mar 15 2010 
21:50 May 02, 2014
Jkt 039200
PO 00000
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