,,ii #aacth ,,congress #b;d ,session ,s4 #bgae ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #ca1 #bjad,mr4 ,carper introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to increase and make permanent the alternative simplified research credit1 and for other purposes4 #a4 ,short title2 amendment of #aihf ,code 7a7 ,short title ,this ,act may be cited as the ,competitiveness and ,opportunity by ,modernizing and ,permanently ,extending the ,tax ,credit for ,experimentation ,act of #bjad or the ,,compete ,act of #bjad4 7b7 ,amendment of #aihf ,code ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 #b4 ,permanent extension and modification of research credit 7a7 ,simplified credit for qualified research expenses ,subsection 7a7 of section #da is amended to read as follows3 7a7 ,general rule ,for purposes of section #ch1 the research credit determined under this section for the taxable year shall be an amount equal to #be percent of so much of the qualified research expenses for the taxable year as exceeds #ej percent of the average qualified research expenses for the #c taxable years preceding the taxable year for which the credit is being determined4 4 7b7 ,special rules and termination of base amount calculation 7#a7 ,in general ,subsection 7c7 of section #da is amended to read as follows3 7c7 ,special rule in case of no qualified research expenses in any of #c preceding taxable years 7#a7 ,taxpayers to which subsection applies ,the credit under this section shall be determined under this subsection1 and not under subsection 7a71 if1 in any one of the #c taxable years preceding the taxable year for which the credit is being determined1 the taxpayer has no qualified research expenses4 7#b7 ,credit rate ,the credit determined under this subsection shall be equal to #aj percent of the qualified research expenses for the taxable year4 4 7#b7 ,consistent treatment of expenses ,subsection 7b7 of section #da is amended by adding at the end the following new paragraph3 7#e7 ,consistent treatment of expenses required 7,a7 ,in general ,notwithstanding whether the period for filing a claim for credit or refund has expired for any taxable year in the #c-taxable-year period taken into account under subsection 7a71 the qualified research expenses taken into account for such year shall be determined on a basis consistent with the determination of qualified research expenses for the credit year4 7,b7 ,prevention of distortions ,the ,secretary may prescribe regulations to prevent distortions in calculating a taxpayer's qualified research expenses caused by a change in accounting methods used by such taxpayer between the credit year and a year in such #c-taxable-year period4 4 7c7 ,inclusion of qualified research expenses of an acquired person 7#a7 ,partial inclusion of pre-acquisition qualified research expenses ,subparagraph 7,a7 of section #da7;f77#c7 is amended to read as follows3 7,a7 ,acquisitions 7i7 ,in general ,if a person acquires the major portion of a trade or business of another person 7hereinafter in this paragraph referred to as the predecessor7 or the major portion of a separate unit of a trade or business of a predecessor1 then the amount of qualified research expenses paid or incurred by the acquiring person during the #c taxable years preceding the taxable year in which the credit under this section is determined shall be increased by-- 7,i7 for purposes of applying this section for the taxable year in which such acquisition is made1 the amount determined under clause 7ii71 and 7,,ii7 for purposes of applying this section for any taxable year after the taxable year in which such acquisition is made1 so much of the qualified research expenses paid or incurred by the predecessor with respect to the acquired trade or business during the portion of the measurement period that is part of the #c-taxable-year period preceding the taxable year for which the credit is determined as is attributable to the portion of such trade or business or separate unit acquired by such person4 7ii7 ,amount determined ,the amount determined under this clause is the amount equal to the product of-- 7,i7 so much of the qualified research expenses paid or incurred by the predecessor with respect to the acquired trade or business during the #c taxable years before the taxable year in which the acquisition is made as is attributable to the portion of such trade or business or separate unit acquired by the acquiring person1 and 7,,ii7 the number of months in the period beginning on the date of the acquisition and ending on the last day of the taxable year in which the acquisition is made1 divided by #ab4 7iii7 ,special rules for coordinating taxable years ,in the case of an acquiring person and a predecessor whose taxable years do not begin on the same date-- 7,i7 each reference to a taxable year in clauses 7i7 and 7ii7 shall refer to the appropriate taxable year of the acquiring person1 7,,ii7 the qualified research expenses paid or incurred by the predecessor during each taxable year of the predecessor any portion of which is part of the measurement period shall be allocated equally among the months of such taxable year1 and 7,,iii7 the amount of such qualified research expenses taken into account under clauses 7i7 and 7ii7 with respect to a taxable year of the acquiring person shall be equal to the total of the expenses attributable under subclause 7,,ii7 to the months occurring during such taxable year4 7iv7 ,measurement period ,for purposes of this subparagraph1 the term measurement period means the taxable year of the acquiring person in which the acquisition is made and the #c taxable years of the acquiring person preceding such taxable year4 4 7#b7 ,expenses of a predecessor ,subparagraph 7,b7 of section #da7;f77#c7 is amended to read as follows3 7,b7 ,dispositions ,if the predecessor furnished to the acquiring person such information as is necessary for the application of subparagraph 7,a71 then1 for purposes of applying this section for any taxable year ending after such disposition1 the amount of qualified research expenses paid or incurred by the predecessor during the #c taxable years preceding such taxable year shall be reduced-- 7i7 in the case of the taxable year in which such disposition is made1 by an amount equal to the product of-- 7,i7 the amount of qualified research expenses paid or incurred during such #c taxable years with respect to the acquired business1 and 7,,ii7 the number of days in the period beginning on the date of acquisition 7as determined for purposes of subparagraph 7,a77ii77,,ii77 and ending on the last day of the taxable year of the predecessor in which the disposition is made1 divided by the number of days in the taxable year of the predecessor1 and 7ii7 in the case of any taxable year ending after the taxable year in which such disposition is made1 the amount described in clause 7i77,i74 4 7d7 ,aggregation of expenditures ,paragraph 7#a7 of section #da7;f71 as amended by the ,american ,taxpayer ,relief ,act of #bjab1 is amended-- 7#a7 by striking of the qualified research expenses1 basic research payments1 and amounts paid or incurred to energy research consortiums1 in subparagraph 7,a77ii7 and inserting qualified research expenses1 and 7#b7 by striking of the qualified research expenses1 basic research payments1 and amounts paid or incurred to energy research consortiums1 in subparagraph 7,b77ii7 and inserting qualified research expenses4 7e7 ,split #ajj percent credit for contract research expenses ,subparagraph 7,a7 of section #da7;b77#c7 is amended to read as follows3 7,a7 ,in general 7i7 ,taxpayers paying for contracted research ,the term contract research expenses means #fe percent of any amount paid or incurred by the taxpayer to any person 7other than an employee of the taxpayer7 for qualified research4 7ii7 ,taxpayers performing contracted research ,in the case of a taxpayer 7other than an entity described in subparagraph 7,c7 or 7,d7 or paragraph 7#e77;,c77 who receives amounts from any person 7other than an employer of the taxpayer7 for qualified research on behalf of such person1 the term contract research expenses means so much of the qualified research expenses paid or incurred by the taxpayer as does not exceed #ce percent of the amounts so received from such person4 7iii7 ,special rules ,for purposes of clause 7ii7-- 7,i7 ,trade or business ,the qualified research expenses of the taxpayer shall be determined as if the trade or business of the taxpayer were the conduct of qualified research on behalf of other persons4 7,,ii7 ,research not treated as funded research ,subparagraph 7,h7 of subsection 7d77#d7 shall not apply4 7,,iii7 ,qualified research ,the qualified research expenses of a taxpayer shall be determined as if the conditions of subparagraph 7,b7 of subsection 7d77#a7 are satisfied if the business component described in subparagraph 7,b77ii7 thereof is a business component of either of the taxpayers described in clauses 7i7 and 7ii74 7,,iv7 ,limitation ,the qualified research expenses of a taxpayer shall not include any expenses that would not be eligible as in-house research expenses for purposes of paragraph 7#b74 7iv7 ,denial of double benefit ,the amount of any in-house research expenses taken into account under this section with respect to a taxpayer described in clause 7ii7 shall be reduced by the amount of the contract research expenses taken into account under such clause with respect to such taxpayer for the taxable year4 4 7f7 ,inclusion of basic research payments ,subsection 7b7 of section #da is amended by redesignating paragraph 7#e71 as added by this section1 as paragraph 7#f71 and by inserting after paragraph 7#d7 the following new paragraph3 7#e7 ,basic research payments 7,a7 ,in general ,in the case of basic research payments made by the taxpayer1 paragraph 7#c77;,a7 shall be applied by substituting #ajj percent for #fe percent4 7,b7 ,basic research payments ,for purposes of this paragraph1 the term basic research payment means1 with respect to any taxable year1 any amount paid in cash during such taxable year by a corporation to any qualified organization for basic research1 but only if-- 7i7 such payment is made pursuant to a written agreement between such corporation and such qualified organization1 and 7ii7 except in the case of a payment to a qualified organization described in clause 7iii7 or 7iv7 of subparagraph 7,c71 such basic research is to be performed by such qualified organization4 7,c7 ,qualified organization ,for purposes of this paragraph1 the term qualified organization means any of the following organizations3 7i7 ,educational institutions ,any educational organization which-- 7,i7 is an institution of higher education 7within the meaning of section #ccjd7;f771 and 7,,ii7 is described in section #agj7;b77#a77;,a77ii74 7ii7 ,certain scientific research organizations ,any organization not described in clause 7i7 which-- 7,i7 is described in section #eja7;c77#c7 and is exempt from tax under section #eja7;a71 7,,ii7 is organized and operated primarily to conduct scientific research1 and 7,,iii7 is not a private foundation4 7iii7 ,scientific tax-exempt organizations ,any organization which-- 7,i7 is described in section #eja7;c77#c7 7other than a private foundation7 or section #eja7;c77#f71 7,,ii7 is exempt from tax under section #eja7;a71 7,,iii7 is organized and operated primarily to promote scientific research by qualified organizations described in clause 7i7 pursuant to written research agreements1 and 7,,iv7 currently expends substantially all of its funds or substantially all of the basic research payments received by it for grants to1 or contracts for basic research with1 an organization described in clause 7i74 7iv7 ,certain grant organizations ,any organization not described in clause 7ii7 or 7iii7 which-- 7,i7 is described in section #eja7;c77#c7 and is exempt from tax under section #eja7;a7 7other than a private foundation71 7,,ii7 is established and maintained by an organization established before ,july #aj1 #aiha1 which meets the requirements of subclause 7,i71 7,,iii7 is organized and operated exclusively for the purpose of making grants to organizations described in clause 7i7 pursuant to written research agreements for purposes of basic research1 and 7,,iv7 makes an election1 revocable only with the consent of the ,secretary1 to be treated as a private foundation for purposes of this title 7other than section #didj1 relating to excise tax based on investment income74 7,d7 ,definitions and special rules ,for purposes of this paragraph-- 7i7 ,basic research ,the term basic research means any original investigation for the advancement of scientific knowledge not having a specific commercial objective1 except that such term shall not include-- 7,i7 basic research conducted outside of the ,united ,states1 and 7,,ii7 basic research in the social sciences1 arts1 or humanities4 7ii7 ,trade or business qualification ,for purposes of applying paragraph 7#a7 to this paragraph1 any basic research payments shall be treated as an amount paid in carrying on a trade or business of the taxpayer in the taxable year in which it is paid 7without regard to the provisions of paragraph 7#c77;,b774 7iii7 ,certain corporations not eligible ,the term corporation shall not include-- 7,i7 an ,s corporation1 7,,ii7 a personal holding company 7as defined in section #edb71 or 7,,iii7 a service organization 7as defined in section #dad7m77#c774 4 7g7 ,permanent extension 7#a7 ,section #da is amended by striking subsection 7h74 7#b7 ,paragraph 7#a7 of section #de;,c7b7 is amended by striking subparagraph 7,d74 7h7 ,conforming amendments 7#a7 ,termination of basic research payment calculation ,section #da is amended-- 7,a7 by striking subsection 7e71 7,b7 by redesignating subsection 7g7 as subsection 7e71 and 7,c7 by relocating subsection 7e71 as so redesignated1 immediately after subsection 7d74 7#b7 ,special rules 7,a7 ,paragraph 7#d7 of section #da7;f7 is amended by striking and gross receipts4 7,b7 ,subsection 7f7 of section #da is amended by striking paragraph 7#f74 7#c7 ,cross-references 7,a7 ,subparagraph 7,b7 of section #de;,c7b77#a7 is amended-- 7i7 by striking paragraph 7#c77;,a7 in clause 7ii7 and inserting paragraph 7#c77;,a77i71 7ii7 by striking the period at the end of clause 7ii7 and inserting 1 and1 7iii7 by striking and at the end of clause 7i71 and 7iv7 by adding at the end the following new clause3 7iii7 by disregarding clauses 7ii71 7iii71 and 7iv7 of paragraph 7#c77;,a7 of such subsection4 4 7,b7 ,paragraph 7#b7 of section #de;,c7c7 is amended by striking base period research expenses and inserting average qualified research expenses4 7,c7 ,subparagraph 7,a7 of section #ed7l77#c7 is amended by striking section #da7;g7 and inserting section #da7;e74 7,d7 ,clause 7i7 of section #agj7;e77#d77;,b7 is amended by striking subparagraph 7,a7 or subparagraph 7,b7 of section #da7;e77#f7 and inserting clause 7i7 or clause 7ii7 of section #da7;b77#e77;,c74 7,e7 ,section #bhj;,c is amended-- 7i7 by striking or basic research expenses 7as defined in section #da7;e77#b77 in subsection 7c77#a71 7ii7 by striking section #da7;a77#a7 in subsection 7c77#b77;,a7 and inserting section #da7;a71 and 7iii7 by striking or basic research expenses in subsection 7c77#b77;,b74 7,f7 ,clause 7i7 of section #adjj,n7l77#g77;,b7 is amended by striking section #da7;g7 and inserting section #da7;e74 7i7 ,technical corrections ,section #dji is amended-- 7#a7 by inserting 1 as in effect before the enactment of the ,tax ,reform ,act of #aihd7 after section #da7;c77#a77;,b7 in subsection 7b77#a77;,a71 7#b7 by inserting 1 as in effect before the enactment of the ,tax ,reform ,act of #aihd after relating to the employee stock ownership credit in subsection 7b77#d71 7#c7 by inserting 7as in effect before the enactment of the ,tax ,reform ,act of #aihd7 after section #da7;c77#a77;,b7 in subsection 7i77#a77;,a71 7#d7 by inserting 7as in effect before the enactment of the ,tax ,reform ,act of #aihd7 after section #da7;c77#a77;,b7 in subsection 7m71 7#e7 by inserting 7as so in effect7 after section #dh7n77#a7 in subsection 7m71 7#f7 by inserting 7as in effect before the enactment of the ,tax ,reform ,act of #aihd7 after section #dh7n7 in subsection 7q77#a71 and 7#g7 by inserting 7as in effect before the enactment of the ,tax ,reform ,act of #aihd7 after section #da in subsection 7q77#c74 7j7 ,effective date 7#a7 ,in general ,except as provided in paragraphs 7#b7 and 7#c71 the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjad4 7#b7 ,permanent extension ,the amendments made by subsection 7g7 shall apply to amounts paid or incurred after ,december #ca1 #bjac4 7#c7 ,technical corrections ,the amendments made by subsection 7i7 shall take effect on the date of the enactment of this ,act4 #c4 ,exception from passive loss rules for investments in high technology research small business pass-thru entities 7a7 ,in general ,subsection 7c7 of section #dfi is amended by redesignating paragraphs 7#d7 through 7#g7 as paragraphs 7#e7 through 7#h71 respectively1 and by inserting after paragraph 7#c7 the following new paragraph3 7#d7 ,high technology research activities 7,a7 ,in general ,the term passive activity shall not include any qualified research activity of the taxpayer carried on by a high technology research small business pass-thru entity4 7,b7 ,treatment of losses and deductions 7i7 ,in general ,losses or deductions of a taxpayer relating to qualified research activities carried on by a high technology research small business pass-thru entity shall not be treated as losses or deductions1 respectively1 from a passive activity except as provided in clause 7ii7 and subparagraph 7,c74 7ii7 ,limitation ,clause 7i7 shall apply to losses and deductions of a taxpayer relating to a high technology small business pass-thru entity for a taxable year only to the extent that the aggregate losses and deductions of the taxpayer relating to qualified research activities of such entity for such taxable year do not exceed the portion of the taxpayer's adjusted basis in the taxpayer's ownership interest in such entity that is attributable to money or other property contributed-- 7,i7 in exchange for such ownership interest1 and 7,,ii7 specifically for use in connection with qualified research activities4 ,for purposes of the preceding sentence1 the taxpayer's basis shall not include any portion of such basis which is attributable to an increase in a partner's share of the liabilities of a partnership that is considered under section #geb7;a7 as a contribution of money4 7,c7 ,treatment of carryovers ,subparagraph 7,b77i7 shall not apply to the portion of any loss or deduction that is carried over under subsection 7b7 into a taxable year other than the taxable year in which such loss or deduction arose4 7,d7 ,qualified research activity ,for purposes of this paragraph1 the term qualified research activity means any activity constituting qualified research 7within the meaning of section #da7;d77#a77;,b7 and taking into account paragraphs 7#c7 and 7#d7 of section #da7;d77 which involves a process of experimentation4 7,e7 ,high technology research small business pass-thru entity ,for purposes of this paragraph1 the term high technology research small business pass-thru entity means any domestic pass-thru entity for any taxable year if-- 7i7 either-- 7,i7 more than #ge percent of the entity's expenditures 7including salaries1 rent and overhead7 for such taxable year are paid or incurred in connection with qualified research 7within the meaning of section #da7;d77#a77;,b71 taking into account paragraphs 7#c7 and 7#d7 of section #da7;d77 that involves a process of experimentation conducted by the entity1 or 7,,ii7 more than #ej percent of the entity's expenditures for such taxable year constitute qualified research expenses 7as defined in section #da7;b71 but determined without regard to the phrase #fe percent of in paragraph 7#c77;,a7 thereof71 7ii7 such entity is a small business 7within the meaning of section #da7;b77#c77;,d77iii71 applied by substituting #bej for #ejj in subclause 7,i7 thereof71 and 7iii7 at no time during the taxable year does the entity have aggregate gross assets in excess of #aej1jjj1jjj4 7,f7 ,provisions related to aggregate gross assets limitation ,for purposes of this paragraph-- 7i7 ,in general ,except as otherwise provided in this subparagraph1 the term aggregate gross assets has the meaning given such term in section #abjb7;d77#b74 7ii7 ,exception for certain intangibles ,any section #aig intangible 7as defined in section #aig7;d7 and determined without regard to section #aig7;e77 which is used directly in connection with the research referred to in subparagraph 7,e77i7 shall not be taken into account in determining aggregate gross assets4 7iii7 ,exception for certain follow-on investments ,cash from a sale of equity interests shall not be taken into account in determining aggregate gross assets if-- 7,i7 the aggregate gross assets of such entity 7determined immediately after such sale and without regard to this clause7 do not exceed the sum of #aej1jjj1jjj1 plus #be percent of the aggregate gross assets of such entity 7determined immediately before such sale and without regard to this clause71 and 7,,ii7 the aggregate gross assets of such entity 7determined immediately before such sale and without regard to this clause7 do not exceed #aej1jjj1jjj4 ,sales of equity interests which are part of the same plan or arrangement1 or which are carried out with the principal purpose of increasing the amount of cash to which this clause applies 7determined without regard to this sentence71 shall be treated as a single sale for purposes of this clause4 7iv7 ,inflation adjustment ,in the case of any taxable year beginning after #bjad1 the #aej1jjj1jjj amount in subparagraph 7,e77iii7 and subclauses 7,i7 and 7,,ii7 of clause 7iii7 shall each be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost of living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins determined by substituting calendar year #bjac for calendar year #aiib in subparagraph 7,b7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the nearest #ajj1jjj4 7,g7 ,capital expenditures taken into account for expenditures test ,an expenditure shall not fail to be taken into account under subparagraph 7,e77i7 merely because such expenditure is chargeable to capital account4 7,h7 ,pass-thru entity ,for purposes of this paragraph1 the term pass-thru entity means any partnership1 ,s corporation1 or other entity identified by the ,secretary as a pass-thru entity for purposes of this paragraph4 7,i7 ,aggregation rules 7i7 ,in general ,all persons treated as a single employer under subsection 7a7 or 7b7 of section #eb1 or subsection 7m7 or 7o7 of section #dad1 shall be treated as a single entity for purposes of subparagraphs 7,e7 and 7,f77iii74 7ii7 ,limitation where entity would not qualify ,no entity shall be treated as a high technology research small business pass-thru entity unless such entity qualifies as such both with and without the application of clause 7i74 7,j7 ,activities not engaged in for profit and economic substance rules ,section #ahc and the economic substance rules of section #ggja7o7 shall not apply to disallow the losses1 deductions1 and credits of a high technology research small business pass-thru entity solely as a result of losses incurred by such entity4 4 7b7 ,material participation not required ,paragraph 7#e7 of section #dfi7;c7 of such ,code1 as redesignated by subsection 7a71 is amended by striking and 7#c7 in the heading and text and inserting 1 7#c71 and 7#d74 7c7 ,certain research-,related deductions and credits of high technology research small business pass-,thru entities allowed for purposes of determining alternative minimum tax 7#a7 ,deduction for research and experimental expenditures ,paragraph 7#b7 of section #ef7;b7 of such ,code is amended by adding at the end the following new subparagraph3 7,e7 ,exception for high technology research small business pass-thru entities ,in the case of a high technology research small business pass-thru entity 7as defined in section #dfi7;c77#d771 this paragraph shall not apply to any amount allowable as a deduction under section #agd7;a74 4 7#b7 ,allowance of certain research-related credits ,subparagraph 7,b7 of section #ch7;c77#d7 of such ,code is amended by redesignating clauses 7ii7 through 7ix7 as clauses 7iii7 through 7x71 respectively1 and by inserting after clause 7i7 the following new clause3 7ii7 the credits determined with respect to an individual taxpayer under sections #da and #dh;,d to the extent attributable to a high technology research small business pass-thru entity 7as defined in section #dfi7;c77#d771 4 7d7 ,exception to limitation on pass-,thru of research credit ,subsection 7g7 of section #da of such ,code is amended by adding at the end the following3 ,paragraphs 7#b7 and 7#d7 shall not apply with respect to any high technology research small business pass-thru entity 7as defined in section #dfi7;c77#d774 7e7 ,effective date ,the amendments made by this section shall apply to losses and credits arising in taxable years beginning on or after ,december #ca1 #bjad4 #d4 ,enhanced credit for highly innovative research 7a7 ,in general ,section #da1 as amended by this ,act1 is amended by adding at the end the following new subsection3 7g7 ,enhanced credit for highly innovative research 7#a7 ,in general ,in the case of any certified highly innovative research expenses1 subsection 7a7 shall be applied by substituting #ce percent for #be percent4 7#b7 ,certified highly innovative research expenses ,for purposes of this subsection-- 7,a7 ,in general ,the term certified highly innovative research expenses means any qualified research expenses that-- 7i7 are paid or incurred during the taxable year for the creation of-- 7,i7 a qualified new product category1 or 7,,ii7 product technology that represents a significant improvement over previously existing product technology1 and 7ii7 are certified as provided in subparagraph 7,d74 7,b7 ,qualified new product category ,the term qualified new product category means a category of product that-- 7i7 has not previously been produced by the taxpayer1 and 7ii7 incorporates functions that are substantially different from other products previously produced by the taxpayer4 7,c7 ,significant improvement over previously existing product technology ,product technology satisfies the requirements of subparagraph 7,a77i77,,ii7 if such technology is an enhancement of a product that-- 7i7 requires the use of new techniques or design methods to achieve such enhancement1 and 7ii7 represents a significant advance in terms of the performance1 energy consumption1 environmental benefit1 public health impact1 cost1 or size of the product4 7,d7 ,certification by ,national ,science ,foundation or ,national ,institutes of ,health 7i7 ,in general ,qualified research expenses shall not be treated as certified highly innovative research expenses for any taxable year unless such expenses1 and the project to which they relate1 are certified by-- 7,i7 the ,national ,science ,foundation1 or 7,,ii7 the ,national ,institutes of ,health1 whichever has appropriate jurisdiction over the subject matter to which such expenses relate1 as meeting the requirements of subparagraph 7,a77i7 7and any regulations or guidance issued by the ,secretary pursuant to such subparagraph74 ,such certification shall be provided by the ,national ,science ,foundation under the program established by section #d7;b7 of the ,,compete ,act of #bjad1 or by the ,national ,institutes of ,health under the program established by section #d7;c7 of such ,act1 whichever is appropriate1 and shall be attached to the return of tax for such taxable year4 ,in no event shall any taxpayer apply for certification to more than one of the entities described in this subparagraph with respect to the same expenses4 7ii7 ,advance certification 7,i7 ,in general ,the certification of expenses under clause 7i7 may be made and provided to the taxpayer not more than #c taxable years before the first taxable year for which the enhanced credit under this subsection will be claimed with respect to such expenses4 7,,ii7 ,reapplication ,the ,national ,science ,foundation and the ,national ,institutes of ,health shall each establish and make publicly available a cap on the number of times a taxpayer who has been denied certification under clause 7i7 with respect to any qualified research expenses may reapply for certification for such expenses4 ,the cap established by each such entity shall permit not fewer than #a reapplication with respect to any expenses4 7iii7 ,duration of certification 7,i7 ,in general ,the certification under clause 7i7 shall apply to expenses relating to the same project 7as identified in such certification7 for not more than #g consecutive taxable years1 beginning with the first taxable year for which the enhanced credit under this subsection is claimed with respect to such expenses4 7,,ii7 ,supporting documentation ,in the case of a certification that applies for more than #a taxable year1 the ,secretary may require the taxpayer to provide such documentation as the ,secretary deems necessary to demonstrate that the expenses to which such certification relates continue to meet the requirements of subparagraph 7,a77i74 7iv7 ,limitation on certifications 7,i7 ,in general ,the total dollar amount of expenses which are certified by each entity under clause 7i7 7including by means of advance certification under clause 7ii77 as highly innovative research expenses for purposes of credits determined in any taxable year shall not exceed #ejj1jjj1jjj4 7,,ii7 ,adjustment for inflation ,in the case of a taxable year beginning after ,december #ca1 #bjaf1 the #ejj1jjj1jjj amount in subclause 7,i7 shall be increased by an amount equal to the product of such dollar amount and the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year1 determined by substituting calendar year #bjae for calendar year #aiib in subparagraph 7,b7 thereof4 7,,iii7 ,rounding ,if any amount as adjusted under subclause 7,,ii7 is not a multiple of #a1jjj1 such amount shall be rounded to the next highest multiple of #a1jjj4 4 7b7 ,certification by ,national ,science ,foundation as highly innovative research and promotion of enhanced credit ,the ,national ,science ,foundation ,authorization ,act of #bjjb 7,public ,law #ajg-cfh7 is amended by adding at the end the following3 #bg4 ,certification as highly innovative research and promotion of enhanced credit 7a7 ,certification 7#a7 ,in general ,the ,director shall establish a program that provides certification of research expenses as highly innovative research expenses for purposes of the enhanced credit for highly innovative research under section #da7;g7 of the ,internal ,revenue ,code of #aihf4 7#b7 ,application ,a person that desires to have research expenses certified as highly innovative research expenses for purposes of the enhanced credit for highly innovation research under section #da7;g7 of the ,internal ,revenue ,code of #aihf1 shall submit to the ,director an application containing such request at such time1 in such manner1 and accompanied by such information as the ,director may require4 7#c7 ,review of submissions ,in carrying out paragraph 7#a71 the ,director shall establish a review process that involves-- 7,a7 a set group of reviewers from various fields and backgrounds1 and 7,b7 published criteria1 developed in consultation with the ,secretary of the ,treasury and the ,secretary of ,commerce1 in accordance with the requirements of section #da7;g77#b77;,a77i7 of the ,internal ,revenue ,code of #aihf and any regulations or guidance issued by the ,secretary of the ,treasury pursuant to such section4 7#d7 ,time for review ,a certification under this subsection shall be denied or approved within #abj days of the submission of the application under paragraph 7#b7 7#bgj days1 in the case of an application for advance certification under section #da7;g77#b77;,d77ii7 of the ,internal ,revenue ,code of #aihf74 7b7 ,promotion of enhanced credit for highly innovative research ,the ,director shall post on the website of the ,national ,science ,foundation information on the enhanced credit for highly innovative research under section #da7;g7 of the ,internal ,revenue ,code of #aihf1 and the process for applying for certification of research as highly innovative research4 7c7 ,confidentiality ,the ,director and each reviewer described in subsection 7a77#c77;,a7 shall keep confidential any information provided by a person that desires to have research expenses certified as highly innovative research expenses pursuant to this section4 4 7c7 ,certification by ,national ,institutes of ,health as highly innovative research and promotion of enhanced credit ,part ,h of title ,,iv of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bhi et seq47 is amended by adding at the end the following3 #dih;,e4 ,certification as highly innovative research and promotion of enhanced credit 7a7 ,certification 7#a7 ,in general ,the ,director of ,,nih shall establish a program that provides certification of research expenses as highly innovative research expenses for purposes of the enhanced credit for highly innovative research under section #da7;g7 of the ,internal ,revenue ,code of #aihf4 7#b7 ,application ,a person that desires to have research expenses certified as highly innovative research expenses for purposes of the enhanced credit for highly innovative research under section #da7;g7 of the ,internal ,revenue ,code of #aihf1 shall submit to the ,director of ,,nih an application containing such request at such time1 in such manner1 and accompanied by such information as the ,director may require4 7#c7 ,review of submissions ,in carrying out paragraph 7#a71 the ,director shall establish a review process that involves-- 7,a7 a set group of reviewers from various fields and backgrounds1 and 7,b7 published criteria1 developed in consultation with the ,secretary of the ,treasury and the ,secretary of ,commerce1 in accordance with the requirements of section #da7;g77#b77;,a77i7 of the ,internal ,revenue ,code of #aihf and any regulations or guidance issued by the ,secretary of the ,treasury pursuant to such section4 7#d7 ,time for review ,a certification under this subsection shall be denied or approved within #abj days of the submission of the application under paragraph 7#b7 7#bgj days1 in the case of an application for advance certification under section #da7;g77#b77;,d77ii7 of the ,internal ,revenue ,code of #aihf74 7b7 ,promotion of enhanced credit for highly innovative research ,the ,director shall post on the website of the ,national ,institutes of ,health information on the enhanced credit for highly innovative research under section #da7;g7 of the ,internal ,revenue ,code of #aihf1 and the process for applying for certification of research as highly innovative research4 7c7 ,confidentiality ,the ,director of ,,nih and each reviewer described in subsection 7a77#c77;,a7 shall keep confidential any information provided by a person that desires to have research expenses certified as highly innovative research expenses pursuant to this section4 4 7d7 ,effective date ,the amendment made by subsection 7a7 shall apply to expenses paid or incurred in taxable years beginning after ,december #ca1 #bjae4 #e4 ,credit allowed against alternative minimum tax 7a7 ,in general ,subparagraph 7,b7 of section #ch7;c77#d7 is amended-- 7#a7 by redesignating clauses 7ii71 7iii71 7iv71 7v71 7vi71 7vii71 7viii71 and 7ix7 as clauses 7iii71 7iv71 7v71 7vi71 7vii71 7viii71 7ix71 and 7x71 respectively1 and 7#b7 by inserting after clause 7i7 the following new clause3 7ii7 for taxable years beginning after ,december #ca1 #bjac1 the credit determined under section #da1 4 7b7 ,special rule for enhanced credit for highly innovative research ,paragraph 7#d7 of section #ch7;c7 is amended by adding at the end the following new subparagraph3 7,c7 ,special rule for enhanced credit for highly innovative research ,in the case of any portion of the credit determined under section #da which is attributable to subsection 7g7 of such section-- 7i7 subparagraph 7,a7 shall be applied separately with respect to such portion1 and 7ii7 paragraph 7#a7 shall be applied to such portion as if the amount determined under subparagraph 7,b7 of such paragraph were zero4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjad4 #f4 ,tax-exempt financing of research park facilities 7a7 ,in general ,subsection 7a7 of section #adb is amended-- 7#a7 by striking or at the end of paragraph 7#ad71 7#b7 by striking the period at the end of paragraph 7#ae7 and inserting 1 or1 and 7#c7 by inserting at the end the following new paragraph3 7#af7 research park facilities4 4 7b7 ,definition ,section #adb is amended by inserting at the end the following new subsection3 7n7 ,research park facilities ,for purposes of subsection 7a77#af71 the term research park facility means a facility 7including buildings1 land1 or other structures7 which is used in connection with research and experimentation 7as defined in section #afh7;i77#aa774 ,for purposes of the preceding sentence1 such term includes facilities which are directly related and ancillary to a research park facility 7determined without regard to this sentence7 if-- 7#a7 such facilities are located on the same site as the research park facility1 and 7#b7 not more than #be percent of the net proceeds of the issue are used to provide such facilities4 4 7c7 ,effective date ,the amendments made by this section shall apply with respect to bonds issued on or after the date of the enactment of this ,act4