,,ii  #aac? ,,congress  #b;d ,session   
,s4 #baci  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,m>* #ac1 #bjad ,mr4   
,m55dez 7= himself & ,mr4 ,toomey7      
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to ext5d !        
exclusion = small bus9ess /ock1 to      
provide inc5tives = small bus9ess high  
te*nology rese>* inve/m5t1 & = o!r      
purposes4  #a4 ,p]man5t full exclusion  
applicable to qualifi$ small bus9ess    
/ock  7a7 ,9 g5]al ,p>agraph 7#d7 (     
section #abjb7;a7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$-- 7#a7 by /rik+ &
 be=e ,janu>y #a1 #bjad1 &  7#b7 by     
/rik+ c]ta9 p]iods 9 #bjaj1 #bjaa1      
#bjab1 & #bjac 9 ! head+ & ins]t+ c]ta9 
p]iods aft] #bjji4  7b7 ,con=m+ am5dm5ts
  7#a7 ,! head+ = section #abjb ( !     
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ p>tial4  7#b7 ,! item relat+ to
 section #abjb 9 ! table ( sections = "p
 ,i ( sub*apt] ,p ( *apt] #a ( su* ,code

 is am5d$ by /rik+ ,p>tial exclusion &  
ins]t+ ,exclusion4  7#c7 ,section       
#abbc7ac7 ( su* ,code is am5d$ by /rik+ 
#abjb7;a77#b714  7c7 ,increase 9 gross  
asset ?re%old  7#a7 ,9 g5]al ,p>agraph  
7#a7 ( section #abjb7;d7 ( ! ,int]nal   
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
#ej1jjj1jjj ea* place x appe>s & ins]t+ 
#aej1jjj1jjj4  7#b7 ,adju/m5t =         
inflation ,subsection 7d7 ( section     
#abjb ( su* ,code is am5d$ by add+ at ! 
end ! foll[+ new p>agraph3  7#d7        
,adju/m5t = inflation ,9 ! case ( any   
taxable ye> beg9n+ aft] ,decemb] #ca1   
#bjad1 ! #aej1jjj1jjj am\nt 9           
subp>agraphs 7,a7 & 7,b7 ( p>agraph 7#a7
 %all be increas$ by an am\nt equal to--
 7,a7 su* doll> am\nt1 multipli$ by     
7,b7 ! co/-(-liv+ adju/m5t det]m9$ "u   
section #a7;f77#c7 = ! cal5d> ye> 9 :i* 
! taxable ye> beg9s1 by sub/itut+ cal5d>
 ye> #bjac = cal5d> ye> #aiib 9         
subp>agraph 7,b7 !re(4  ,if any am\nt z 
increas$ "u ! prec$+ s5t5ce is n a      
multiple ( #a1jjj1 su* am\nt %all be    

r\nd$ to ! ne>e/ multiple ( #a1jjj4  4  
7d7 ,effective date ,! am5dm5ts made by 
?is section %all apply to /ock acquir$  
aft] ,decemb] #ca1 #bjac4  #b4          
,exception f passive loss rules =       
inve/m5ts 9 high te*nology rese>* small 
bus9ess pass-?ru entities  7a7 ,9 g5]al 
,subsection 7c7 ( section #dfi ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by r$esignat+ p>agraphs 7#d7 ?r\gh 7#g7 
z p>agraphs 7#e7 ?r\gh 7#h71            
respectively1 & by ins]t+ aft] p>agraph 
7#c7 ! foll[+ new p>agraph3  7#d7 ,high 
te*nology rese>* activities  7,a7 ,9    
g5]al ,! t]m passive activity %all n    
include any qualifi$ rese>* activity ( !
 taxpay] c>ri$ on by a high te*nology   
rese>* small bus9ess pass-?ru entity4   
7,b7 ,treatm5t ( losses & d$uctions  7i7
 ,9 g5]al ,losses or d$uctions ( a      
taxpay] relat+ to qualifi$ rese>*       
activities c>ri$ on by a high te*nology 
rese>* small bus9ess pass-?ru entity    
%all n be treat$ z losses or d$uctions1 
respectively1 f a passive activity      

except z provid$ 9 clause 7ii7 &        
subp>agraph 7,c74  7ii7 ,limitation     
,clause 7i7 %all apply to losses &      
d$uctions ( a taxpay] relat+ to a high  
te*nology small bus9ess pass-?ru entity 
= a taxable ye> only to ! ext5t t !     
aggregate losses & d$uctions ( ! taxpay]
 relat+ to qualifi$ rese>* activities ( 
su* entity = su* taxable ye> d n exce$ !
 portion ( ! taxpay]'s adju/$ basis 9 ! 
taxpay]'s own]%ip int]e/ 9 su* entity t 
is attributable to money or o!r prop]ty 
contribut$-- 7,i7 9 ex*ange = su*       
own]%ip int]e/1 &  7,,ii7 specifically =
 use 9 connection ) qualifi$ rese>*     
activities4  ,= purposes ( ! prec$+     
s5t5ce1 ! taxpay]'s basis %all n include
 any portion ( su* basis :i* is         
attributable to an increase 9 a p>tn]'s 
%>e ( ! liabilities ( a p>tn]%ip t is   
consid]$ "u section #geb7;a7 z a        
contribution ( money4  7,c7 ,treatm5t ( 
c>ryov]s ,subp>agraph 7,b77i7 %all n    
apply to ! portion ( any loss or        
d$uction t is c>ri$ ov] "u subsection   

7b7 into a taxable ye> o!r ?an ! taxable
 ye> 9 :i* su* loss or d$uction arose4  
7,d7 ,qualifi$ rese>* activity ,=       
purposes ( ?is p>agraph1 ! t]m qualifi$ 
rese>* activity means any activity      
con/itut+ qualifi$ rese>* 7)9 ! mean+ ( 
section #da7;d77#a77;,b7 & tak+ into    
acc\nt p>agraphs 7#c7 & 7#d7 ( section  
#da7;d77 :i* involves a process (       
exp]im5tation4  7,e7 ,high te*nology    
rese>* small bus9ess pass-?ru entity ,= 
purposes ( ?is p>agraph1 ! t]m high     
te*nology rese>* small bus9ess pass-?ru 
entity means any dome/ic pass-?ru entity
 = any taxable ye> if-- 7i7 ei!r-- 7,i7 
m ?an #ge p]c5t ( ! entity's exp5ditures
 7includ+ sal>ies1 r5t & ov]head7 = su* 
taxable ye> are paid or incurr$ 9       
connection ) qualifi$ rese>* 7)9 ! mean+
 ( section #da7;d77#a77;,b71 tak+ into  
acc\nt p>agraphs 7#c7 & 7#d7 ( section  
#da7;d77 t involves a process (         
exp]im5tation conduct$ by ! entity1 or  
7,,ii7 m ?an #ej p]c5t ( ! entity's     
exp5ditures = su* taxable ye> con/itute 

qualifi$ rese>* exp5ses 7z def9$ 9      
section #da7;b71 b det]m9$ )\t reg>d to 
! phrase #fe p]c5t ( 9 p>agraph         
7#c77;,a7 !re(71  7ii7 su* entity is a  
small bus9ess 7)9 ! mean+ ( section     
#da7;b77#c77;,d77iii71 appli$ by        
sub/itut+ #bej = #ejj 9 subclause 7,i7  
!re(71 &  7iii7 at no "t dur+ ! taxable 
ye> does ! entity h aggregate gross     
assets 9 excess ( #aej1jjj1jjj4  7,f7   
,provisions relat$ to aggregate gross   
assets limitation ,= purposes ( ?is     
p>agraph-- 7i7 ,9 g5]al ,except z       
o!rwise provid$ 9 ?is subp>agraph1 ! t]m
 aggregate gross assets has ! mean+ giv5
 su* t]m 9 section #abjb7;d77#b74  7ii7 
,exception = c]ta9 intangibles ,any     
section #aig intangible 7z def9$ 9      
section #aig7;d7 & det]m9$ )\t reg>d to 
section #aig7;e77 :i* is us$ directly 9 
connection ) ! rese>* ref]r$ to 9       
subp>agraph 7,e77i7 %all n be tak5 into 
acc\nt 9 det]m9+ aggregate gross assets4
  7iii7 ,exception = c]ta9 foll[-on     
inve/m5ts ,ca% f a sale ( equity int]e/s

 %all n be tak5 into acc\nt 9 det]m9+   
aggregate gross assets if-- 7,i7 !      
aggregate gross assets ( su* entity     
7det]m9$ imm$iately aft] su* sale & )\t 
reg>d to ?is clause7 d n exce$ ! sum (  
#aej1jjj1jjj1 plus #be p]c5t ( !        
aggregate gross assets ( su* entity     
7det]m9$ imm$iately be=e su* sale & )\t 
reg>d to ?is clause71 &  7,,ii7 !       
aggregate gross assets ( su* entity     
7det]m9$ imm$iately be=e su* sale & )\t 
reg>d to ?is clause7 d n exce$          
#aej1jjj1jjj4  ,sales ( equity int]e/s  
:i* are "p ( ! same plan or arrangem5t1 
or :i* are c>ri$ out ) ! pr9cipal       
purpose ( increas+ ! am\nt ( ca% to :i* 
?is clause applies 7det]m9$ )\t reg>d to
 ?is s5t5ce71 %all be treat$ z a s+le   
sale = purposes ( ?is clause4  7iv7     
,inflation adju/m5t ,9 ! case ( any     
taxable ye> beg9n+ aft] #bjad1 !        
#aej1jjj1jjj am\nt 9 subp>agraph        
7,e77iii7 & subclauses 7,i7 & 7,,ii7 (  
clause 7iii7 %all ea* be increas$ by an 
am\nt equal to-- 7,i7 su* doll> am\nt1  

multipli$ by  7,,ii7 ! co/ ( liv+       
adju/m5t det]m9$ "u section #a7;f77#c7 =
 ! cal5d> ye> 9 :i* ! taxable ye> beg9s 
det]m9$ by sub/itut+ cal5d> ye> #bjac = 
cal5d> ye> #aiib 9 subp>agraph 7,b7     
!re(4  ,any increase det]m9$ "u ! prec$+
 s5t5ce %all be r\nd$ to ! ne>e/        
#ajj1jjj4  7,g7 ,capital exp5ditures    
tak5 into acc\nt = exp5ditures te/ ,an  
exp5diture %all n fail to be tak5 into  
acc\nt "u subp>agraph 7,e77i7 m]ely     
because su* exp5diture is *>geable to   
capital acc\nt4  7,h7 ,pass-?ru entity  
,= purposes ( ?is p>agraph1 ! t]m       
pass-?ru entity means any p>tn]%ip1 ,s  
corporation1 or o!r entity id5tifi$ by !
 ,secret>y z a pass-?ru entity =        
purposes ( ?is p>agraph4  7,i7          
,aggregation rules  7i7 ,9 g5]al ,all   
p]sons treat$ z a s+le employ] "u       
subsection 7a7 or 7b7 ( section #eb1 or 
subsection 7m7 or 7o7 ( section #dad1   
%all be treat$ z a s+le entity =        
purposes ( subp>agraphs 7,e7 &          
7,f77iii74  7ii7 ,limitation :]e entity 

w\ld n qualify ,no entity %all be treat$
 z a high te*nology rese>* small bus9ess
 pass-?ru entity unless su* entity      
qualifies z su* bo? ) & )\t !           
application ( clause 7i74  7,j7         
,activities n engag$ 9 = pr(it &        
economic sub/ance rules ,section #ahc & 
! economic sub/ance rules ( section     
#ggja7o7 %all n apply to disall[ !      
losses1 d$uctions1 & cr$its ( a high    
te*nology rese>* small bus9ess pass-?ru 
entity solely z a result ( losses       
incurr$ by su* entity4  4  7b7 ,mat]ial 
p>ticipation n requir$ ,p>agraph 7#e7 ( 
section #dfi7;c7 ( ! ,int]nal ,rev5ue   
,code ( #aihf1 z r$esignat$ by          
subsection 7a71 is am5d$ by /rik+ & 7#c7
 9 ! head+ & text & ins]t+ 1 7#c71 &    
7#d74  7c7 ,c]ta9 rese>*-,relat$        
d$uctions & cr$its ( high te*nology     
rese>* small bus9ess pass-,?ru entities 
all[$ = purposes ( det]m9+ alt]native   
m9imum tax  7#a7 ,d$uction = rese>* &   
exp]im5tal exp5ditures ,p>agraph 7#b7 ( 
section #ef7;b7 ( ! ,int]nal ,rev5ue    

,code ( #aihf is am5d$ by add+ at ! end 
! foll[+ new subp>agraph3  7,e7         
,exception = high te*nology rese>* small
 bus9ess pass-?ru entities ,9 ! case ( a
 high te*nology rese>* small bus9ess    
pass-?ru entity 7z def9$ 9 section      
#dfi7;c77#d771 ?is p>agraph %all n apply
 to any am\nt all[able z a d$uction "u  
section #agd7;a74  4  7#b7 ,all[ance (  
c]ta9 rese>*-relat$ cr$its ,subp>agraph 
7,b7 ( section #ch7;c77#d7 ( su* ,code  
is am5d$ by r$esignat+ clauses 7ii7     
?r\gh 7ix7 z clauses 7iii7 ?r\gh 7x71   
respectively1 & by ins]t+ aft] clause   
7i7 ! foll[+ new clause3  7ii7 ! cr$its 
( an individual taxpay] det]m9$ "u      
sections #da & #dh;,d to ! ext5t        
attributable to a high te*nology rese>* 
small bus9ess pass-?ru entity 7z def9$ 9
 section #dfi7;c77#d771  4  7d7         
,exception to limitation on pass-,?ru ( 
rese>* cr$it ,subsection 7g7 ( section  
#da ( su* ,code is am5d$ by add+ at !   
end ! foll[+3 ,p>agraphs 7#b7 & 7#d7    
%all n apply ) respect to any high      

te*nology rese>* small bus9ess pass-?ru 
entity 7z def9$ 9 section               
#dfi7;c77#d7744  7e7 ,effective date ,! 
am5dm5ts made by ?is section %all apply 
to losses & cr$its aris+ 9 taxable ye>s 
beg9n+ on or aft] ! date ( ! enactm5t ( 
?is ,act4