Section 1 Short title
This Act may be cited as the “Igniting American Research Act”.
Igniting American Research Act
A BILL
To amend the Internal Revenue Code of 1986 to extend the research credit one year, to increase and make permanent the alternative simplified research credit, and to provide a 20 percent credit for payments to biotechnology research consortiums for biotechnology research.
Sec. 2 1-Year extension of research credit; alternative simplified research credit increased and made permanent
1-Year extension of credit—
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, 2014”.
Conforming amendment— Subparagraph (D) of section 45C(b)(1) of such Code is amended by striking “December 31, 2013” and inserting “December 31, 2014”.
Effective date— The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2013.
Alternative simplified research credit increased and made permanent—
Increased credit— Subparagraph (A) of section 41(c)(5) of such Code (relating to election of alternative simplified credit) is amended by striking “14 percent (12 percent in the case of taxable years ending before January 1, 2009)” and inserting “20 percent”.
Credit made permanent—
In general— Subsection (h) of section 41 of such Code is amended by redesignating the paragraph (2) relating to computation of taxable year in which credit terminates as paragraph (4) and by inserting before such paragraph the following new paragraph:
“(3) Termination not to apply to alternative simplified credit—Paragraph (1) shall not apply to the credit determined under subsection (c)(5).”
Conforming amendment— Paragraph (4) of section 41(h) of such Code, as redesignated by subparagraph (A), is amended to read as follows:
“(4) Computation for taxable year in which credit terminates—In the case of any taxable year with respect to which this section applies to a number of days which is less than the total number of days in such taxable year, the amount determined under subsection (c)(1)(B) with respect to such taxable year shall be the amount which bears the same ratio to such amount (determined without regard to this paragraph) as the number of days in such taxable year to which this section applies bears to the total number of days in such taxable year.”
Effective date— The amendments made by this subsection shall apply to taxable years ending after December 31, 2013.
Sec. 3 Biotechnology research
20 percent credit for payments to biotechnology research consortium for biotechnology research—
In general— Section 41(a)(3) of the Internal Revenue Code of 1986 is amended by inserting “or a biotechnology research consortium for biotechnology research” before the period at the end.
Limitation— Section 41(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following flush sentence: “The amounts taken into account for purposes of paragraph (3) for a taxable year may not exceed the greater of 20 percent of the amounts paid or incurred by the taxpayer during the taxable year (including as contributions) to an energy research consortium for energy research or 20 percent of the amounts paid or incurred by the taxpayer during the taxable year (including as contributions) to a biotechnology research consortium for biotechnology research.”.
Biotechnology contract research expenses— Section 41(b)(3)(D)(i) of the Internal Revenue Code of 1986 is amended by striking “energy research” and inserting “energy or biotechnology research”.
Special rules— Subparagraphs (A)(ii) and (B)(ii) of section 41(f)(1) of the Internal Revenue Code of 1986 are both amended by striking “consortiums,” and inserting “consortiums and to biotechnology research consortiums,”.
Biotechnology research consortium defined— Section 41(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(7) Biotechnology research consortium
“(A) In general—The term biotechnology research consortium means any organization—
“(i) which is—
“(I) described in section 501(c)(3) and is exempt from tax under section 501(a) and is organized and operated primarily to conduct biotechnology research, or
“(II) organized and operated primarily to conduct biotechnology research in the public interest (within the meaning of section 501(c)(3)),
“(ii) which is not a private foundation,
“(iii) to which at least 3 unrelated persons paid or incurred during the calendar year in which the taxable year of the organization begins amounts (including as contributions) to such organization for biotechnology research, and
“(iv) to which no single person paid or incurred (including as contributions) during such calendar year an amount equal to more than 50 percent of the total amounts received by such organization during such calendar year for biotechnology research.
“(B) Applicable rules—For purposes of subparagraph (A), rules similar to the rules of subparagraphs (B), (C) (applied by substituting “biotechnology” for “research”), and (D) of paragraph (6) shall apply.
“(C) Biotechnology research—The term biotechnology research does not include—
“(i) any research which is not qualified research, and
“(ii) any research which is energy research.”
Energy research consortium— Section 41(f)(A)(iii) of the Internal Revenue Code of 1986 is amended by striking “5 unrelated persons” and inserting “3 unrelated persons”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2013.