American Research and Competitiveness Act of 2014 - Amends the Internal Revenue Code to establish a permanent research tax credit that allows for: (1) 20% of the qualified or basic research expenses that exceed 50% of the average qualified or basic research expenses for the 3 preceding taxable years, and (2) 20% of amounts paid to an energy research consortium for energy research. Reduces such credit rate to 10% if a taxpayer has no qualified research expenses in any one of the 3 preceding taxable years.
Prohibits the entry of the budgetary effects of this Act on any PAYGO scorecard.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4438 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 4438
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
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to simplify and make
permanent the research credit.
Be it enacted by the Senate and House of Representatives 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 PERMANENT.
(a) In General.--Subsection (a) of section 41 of the Internal
Revenue Code of 1986 is amended to read as follows:
``(a) In General.--For purposes of section 38, the research 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 research
expenses for the taxable year as exceeds 50 percent 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 taxable 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 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 Expenses 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 whether the
period for filing a claim for credit or refund has
expired for any taxable year taken into account in
determining the average qualified research expenses, or
average basic research payments, taken into account
under subsection (a), the qualified research expenses
and basic research payments taken into account in
determining such averages shall be determined on a
basis consistent with the determination of qualified
research expenses and basic research payments,
respectively, for the credit year.
``(B) Prevention of distortions.--The Secretary may
prescribe regulations to prevent distortions in
calculating a taxpayer's qualified research expenses or
basic research payments caused by a change in
accounting methods used by such taxpayer between the
current year and a year taken into account in
determining the average qualified research expenses or
average basic research payments taken into account
under subsection (a).''.
(2) Section 41(e) of such Code is amended--
(A) by striking all that precedes paragraph (6) and
inserting the following:
``(e) Basic Research Payments.--For purposes of this section--
``(1) In general.--The term `basic research payment' means,
with respect to any taxable year, any amount paid in cash
during such taxable year by a corporation to any qualified
organization for basic research but only if--
``(A) such payment is pursuant to a written
agreement between such corporation and such qualified
organization, and
``(B) such basic research is to be performed by
such qualified organization.
``(2) Exception to requirement that research be performed
by the organization.--In the case of a qualified organization
described in subparagraph (C) or (D) of paragraph (3),
subparagraph (B) of paragraph (1) shall not apply.'',
(B) by redesignating paragraphs (6) and (7) as
paragraphs (3) and (4), respectively, and
(C) in paragraph (4) as so redesignated, by
striking subparagraphs (B) and (C) and by redesignating
subparagraphs (D) and (E) as subparagraphs (B) and (C),
respectively.
(3) Section 41(f)(3) of such Code is amended--
(A)(i) by striking ``, and the gross receipts'' in
subparagraph (A)(i) and all that follows through
``determined under clause (iii)'',
(ii) by striking clause (iii) of subparagraph (A)
and redesignating clauses (iv), (v), and (vi), thereof,
as clauses (iii), (iv), and (v), respectively,
(iii) by striking ``and (iv)'' each place it
appears in subparagraph (A)(iv) (as so redesignated)
and inserting ``and (iii)'',
(iv) by striking subclause (IV) of subparagraph
(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)(v)(II) (as so
redesignated),
(v) by striking ``(A)(vi)'' in subparagraph (B) and
inserting ``(A)(v)'', and
(vi) by striking ``(A)(iv)(II)'' in subparagraph
(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.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this subsection 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 incurred after December 31,
2013.
<all>
Placed on the Union Calendar, Calendar No. 319.
Rules Committee Resolution H. Res. 569 Reported to House. Rule provides for consideration of H.R. 4438 with 1 hour and 30 minutes of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Bill is closed to amendments. All points of order against consideration of the bill are waived. The amendment in the nature of a substitute recommended by the Committee on Ways and Means now printed in the bill shall be considered as adopted.
Rule H. Res. 569 passed House.
Considered under the provisions of rule H. Res. 569. (consideration: CR H3980-3985; text of measure as reported in House: CR H3980-3981)
Rule provides for consideration of H.R. 4438 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. Bill is closed to amendments. All points of order against consideration of the bill are waived. The amendment in the nature of a substitute recommended by the Committee on Ways and Means now printed in the bill shall be considered as adopted.
DEBATE - The House proceeded with one hour of debate on H.R. 4438.
POSTPONED PROCEEDINGS - The Chair announced that pursuant to clause 1(c) of rule 19, further proceedings on H.R. 4438 would be postponed.
Considered as unfinished business. (consideration: CR H3985-3988)
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DEBATE - The House resumed with the remaining 28 and 3/4 minutes of debate.
The previous question was ordered pursuant to the rule. (consideration: CR H3988)
POSTPONED PROCEEDINGS - The Chair announced that pursuant to clause 1(c) of rule 19, further proceedings on H.R. 4438 would be postponed.
Considered as unfinished business. (consideration: CR H4021-4023)
Mrs. Kirkpatrick moved to recommit with instructions to the Committee on Ways and Means. (consideration: CR H4021-4022; text: CR H4021)
DEBATE - The House proceeded with 10 minutes of debate on the Kirkpatrick motion to recommit with instructions. The instructions contained in the motion seek to ensure that businesses can only claim the Research and Development credit for expenses attributable to wages if they: (1) guarantee female employees receive equal pay for equal work; (2) give priority to hiring unemployed Americans, especially veterans; and (3) do not outsource American jobs. Additionally, the motion ensures that the underlying legislation cannot take effect if it increases the deficit.
The previous question on the motion to recommit with instructions was ordered without objection. (consideration: CR H4022)
On motion to recommit with instructions Failed by the Yeas and Nays: 191 - 209 (Roll no. 210).
Roll Call #210 (House)Passed/agreed to in House: On passage Passed by the Yeas and Nays: 274 - 131 (Roll no. 211).(text: CR 5/8/2014 H3980-3981)
Roll Call #211 (House)On passage Passed by the Yeas and Nays: 274 - 131 (Roll no. 211). (text: CR 5/8/2014 H3980-3981)
Roll Call #211 (House)Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate.