In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Q: SECTION 1. CREDIT FOR INCREASING DEVELOPMENT ACTIVITIES.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 41 the following new section:

''SEC. 41A. CREDIT FOR INCREASING DEVELOPMENT ACTIVITIES.

''(a) In General.--For purposes of section 38, at the election of
the taxpayer, the development credit determined under this section for
the taxable year shall be an amount equal to 30 percent of so much of
the qualified development expenses for the taxable year as exceeds 50
percent of the average qualified development expenses for the 3 taxable
years preceding the taxable year for which the credit is being
determined.
''(b) Qualified Development Expenses.--For purposes of this
section--
''(1) In general.--The term 'qualified development
expenses' means the sum of the following amounts which are paid
or incurred during the taxable year in carrying on any trade or
business of the taxpayer:
''(A) Any in-house development expenses.
''(B) Any contract development expenses.
''(2) In-house development expenses; contract development
expenses.--The terms 'in-house development expenses' and
'contract development expenses' shall have the respective
meaning given such terms in paragraphs (2) and (3) of section
41(b), except such paragraphs shall be applied by substituting
'qualified development' for 'qualified research'.
''(c) Qualified Development.--The term 'qualified development'
means the systematic application of knowledge or understanding directed
toward the production of useful material, devices, and systems or
methods, including design, development, and improvement of prototypes
and new processes to meet specific requirements. For purposes of the
preceding sentence the rules of subparagraphs (A), (B), and (C) of
section 41(d)(1) shall apply with respect to any development taken into
account under this section.
''(d) Special Rule in Case of No Qualified Development Expenses in
Any of 3 Preceding Years.--
''(1) Taxpayers to which this subparagraph applies.--The
credit under this section shall be determined under this
subsection if the taxpayer has no qualified development
expenses in any one of the 3 taxable years preceding the
taxable year for which the credit is being determined.
''(2) Credit rate.--The credit determined under this
subparagraph shall be equal to 12 percent of the qualified
development expenses for the taxable year.
''(e) Election.--An election under this section shall apply to the
taxable year for which made and all succeeding taxable years unless
revoked with the consent of the Secretary.
''(f) Other Special Rules.--Rules similar to the rules of
subsections (d)(4), (f), and (g) of section 41 shall apply for purposes
of this section.
''(g) Termination.--This section shall not apply to taxable years
beginning after December 31, 2018.''.
(b) Coordination With Section 41.--Subsection (b) of section 41 of
such Code is amended by adding at the end the following new paragraph:
''(5) Coordination with section 41a.--In the case of any
taxable year for which an election is in effect under section
41A, for purposes of determining the amount of qualified
research expenses for such taxable year and the fixed-base
percentage with respect to such taxable year, qualified
research expenses shall not include any qualified development
expenses (as defined in subsection (b) of such section).''.
(c) Coordination With Deductions.--Section 280C is amended by
adding at the end the following new subsection:
''(j) Credit for Increasing Development Activities.--
''(1) In general.--No deduction shall be allowed for that
portion of the qualified development expenses (as defined in
section 41A(b)) otherwise allowable as a deduction for the
taxable year which is equal to the amount of the credit
determined for such taxable year under section 41A(a).
''(2) Similar rule where taxpayer capitalizes rather than
deducts expenses.--If--
''(A) the amount of the credit determined for the
taxable year under section 41A(a), exceeds
''(B) the amount allowable as a deduction for such
taxable year for qualified development expenses
(determined without regard to paragraph (1)),
the amount chargeable to capital account for the taxable year
for such expenses shall be reduced by the amount of such
excess.
''(3) Election of reduced credit.--
''(A) In general.--In the case of any taxable year
for which an election is made under this paragraph--
''(i) paragraphs (1) and (2) shall not
apply, and
''(ii) the amount of the credit under
section 41A(a) shall be the amount determined
under subparagraph (B).
''(B) Amount of reduced credit.--The amount of
credit determined under this subparagraph for any
taxable year shall be the amount equal to the excess
of--
''(i) the amount of credit determined under
section 41A(a) without regard to this
paragraph, over
''(ii) the product of--
''(I) the amount described in
clause (i), and
''(II) the maximum rate of tax
under section 11(b)(1).
''(C) Election.--An election under this paragraph
for any taxable year shall be made not later than the
time for filing the return of tax for such year
(including extensions), shall be made on such return,
and shall be made in such manner as the Secretary may
prescribe. Such an election, once made, shall be
irrevocable.
''(4) Controlled groups.--Paragraph (3) of subsection (b)
shall apply for purposes of this subsection.''.
(d) Part of General Business Credit.--Subsection (b) of section 38
of such Code is amended by striking ''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 development credit determined under section
41A.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2013.

SEC. 2. INCREASE IN ALTERNATIVE SIMPLIFIED CREDIT FOR RESEARCH.

(a) In General.--Subparagraph (A) of section 41(c)(5) of the
Internal Revenue Code of 1986 is amended by striking ''14 percent (12
percent in the case of taxable years ending before January 1, 2009)''
and inserting ''20 percent''.
(b) Special Rule in Case of No Qualified Research Expenses in Any
of 3 Preceding Taxable Years.--Clause (ii) of section 41(c)(5)(B) of
such Code is amended by striking ''6 percent'' and inserting ''8
percent''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2013.

SEC. 3. EXTENSION OF CREDIT FOR INCREASING RESEARCH ACTIVITIES.

(a) In General.--Subparagraph (B) of section 41(h)(1) of the
Internal Revenue Code of 1986 is amended by striking ''December 31,
2013'' and inserting ''December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or incurred after December 31, 2013.
A:
Amends the Internal Revenue Code to: (1) allow through 2018 a new business-related tax credit for an increase in expenditures for qualified development expenses (defined as the sum of any in-house and contract development expenses incurred in the trade or business of a taxpayer), (2) increase to 20% the rate of the alternative simplified research tax credit, and (3) extend through 2018 the tax credit for increasing research activities.