,i #aafth ,,congress #b;d ,session ,h4 ,r4 #aa ,,in ,,the ,,house ,,of ,,representatives ,october #i1 #bjbj,mr4 ,brady introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to encourage investment to renew1 restore1 and rebuild the ,american economy for our workers1 families1 and small businesses1 maximize innovation through research and development1 and secure ,america's medical supplies4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,commitment to ,american ,growth1 ,renewal1 and ,opportunities for ,workers1 ,technology1 and ,health ,act or as the ,commitment to ,american ,,growth ,act4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,title ,i--,growth in ,business ,investment to ,boost ,american ,wages and ,jobs,sec4 #aja4 ,permanent full expensing for qualified property4,sec4 #ajb4 ,limitation on business interest permanently applied without regard to deductions for depreciation1 amortization1 and depletion4,title ,,ii--,growth in ,research in ,america,sec4 #bja4 ,repeal amortization of research and experimental expenditures4,sec4 #bjb4 ,doubling the research and experimental tax credit and better access to credits for startups4,sec4 #bjc4 ,special rules for transfers of intangible property from controlled foreign corporations to ,united ,states shareholders4,title ,,iii--,growth in ,america's ,medical ,independence,sec4 #cja4 ,domestic medical and drug manufacturing credit4,sec4 #cjb4 ,qualifying advanced medical manufacturing equipment credit4,sec4 #cjc4 ,new medical research expenditure component of credit for increasing research activities4,sec4 #cjd4 ,refundable portion of research credit for small businesses engaging in specified medical research4,sec4 #cje4 ,exception from passive loss rules for investments in specified medical research small business pass-thru entities4,title ,,iv--,growth in ,innovation and ,technology ,breakthroughs,sec4 #dja4 ,simplification and expansion of deduction for start-up and organizational expenditures4,sec4 #djb4 ,preservation of start-up net operating losses and tax credits after ownership change4 ,i ,growth in ,business ,investment to ,boost ,american ,wages and ,jobs #aja4 ,permanent full expensing for qualified property 7a7 ,in general ,paragraph 7#f7 of section #afh7k7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#f7 ,applicable percentage ,for purposes of this subsection1 the term applicable percentage means1 in the case of property placed in service 7or1 in the case of a specified plant described in paragraph 7#e71 a plant which is planted or grafted7 after ,september #bg1 #bjag1 #ajj percent4 4 7b7 ,conforming amendments 7#a7 ,section #afh7k7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 in paragraph 7#b7-- 7i7 in subparagraph 7,a7-- 7,i7 in clause 7i77,v71 by inserting and at the end2 7,,ii7 in clause 7ii71 by striking clause 7ii7 of subparagraph 7,e71 and and inserting clause 7i7 of subparagraph 7,e742 and 7,,iii7 by striking clause 7iii72 7ii7 in subparagraph 7,b7-- 7,i7 in clause 7i7-- 7aa7 by striking subclauses 7,,ii7 and 7,,iii72 and 7bb7 by redesignating subclauses 7,,iv7 through 7,,vi7 as subclauses 7,,ii7 through 7,,iv71 respectively2 7,,ii7 by striking clause 7ii72 and 7,,iii7 by redesignating clauses 7iii7 and 7iv7 as clauses 7ii7 and 7iii71 respectively2 7iii7 in subparagraph 7,c7-- 7,i7 in clause 7i71 by striking and subclauses 7,,ii7 and 7,,iii7 of subparagraph 7,b77i72 and 7,,ii7 in clause 7ii71 by striking subparagraph 7,b77iii7 and inserting subparagraph 7,b77ii72 and 7iv7 in subparagraph 7,e7-- 7,i7 by striking clause 7i72 and 7,,ii7 by redesignating clauses 7ii7 and 7iii7 as clauses 7i7 and 7ii71 respectively2 and 7,b7 in paragraph 7#e77;,a71 by striking planted before ,january #a1 #bjbg1 or is grafted before such date to a plant that has already been planted1 and inserting planted or grafted4 7#b7 ,section #dfj7;c77#f77;,b7 of such ,code is amended by striking which and all that follows through the period and inserting which has a recovery period of #g years or less44 7c7 ,effective date ,the amendments made by this section shall take effect as if included in section #acbja of ,public ,law #aae-ig4 #ajb4 ,limitation on business interest permanently applied without regard to deductions for depreciation1 amortization1 and depletion 7a7 ,in general ,section #afc7;j77#h77;,a77v7 of the ,internal ,revenue ,code of #aihf is amended by striking in the case of taxable years beginning before ,january #a1 #bjbb4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjba4 ,,ii ,growth in ,research in ,america #bja4 ,repeal amortization of research and experimental expenditures 7a7 ,in general ,section #agd is amended to read as follows3 #agd4 ,research and experimental expenditures 7a7 ,treatment as ,expenses 7#a7 ,in general ,a taxpayer may treat research or experimental expenditures which are paid or incurred by him during the taxable year in connection with his trade or business as expenses which are not chargeable to capital account4 ,the expenditures so treated shall be allowed as a deduction4 7#b7 ,when method may be adopted 7,a7 ,without consent ,a taxpayer may1 without the consent of the ,secretary1 adopt the method provided in this subsection for his first taxable year for which expenditures described in paragraph 7#a7 are paid or incurred4 7,b7 ,with consent ,a taxpayer may1 with the consent of the ,secretary1 adopt at any time the method provided in this subsection4 7#c7 ,scope ,the method adopted under this subsection shall apply to all expenditures described in paragraph 7#a74 ,the method adopted shall be adhered to in computing taxable income for the taxable year and for all subsequent taxable years unless1 with the approval of the ,secretary1 a change to a different method is authorized with respect to part or all of such expenditures4 7b7 ,amortization of ,certain ,research and ,experimental ,expenditures 7#a7 ,in general ,at the election of the taxpayer1 made in accordance with regulations prescribed by the ,secretary1 research or experimental expenditures which are-- 7,a7 paid or incurred by the taxpayer in connection with his trade or business1 7,b7 not treated as expenses under subsection 7a71 and 7,c7 chargeable to capital account but not chargeable to property of a character which is subject to the allowance under section #afg 7relating to allowance for depreciation1 etc47 or section #faa 7relating to allowance for depletion71 may be treated as deferred expenses4 ,in computing taxable income1 such deferred expenses shall be allowed as a deduction ratably over such period of not less than #fj months as may be selected by the taxpayer 7beginning with the month in which the taxpayer first realizes benefits from such expenditures74 ,such deferred expenses are expenditures properly chargeable to capital account for purposes of section #ajaf7;a77#a7 7relating to adjustments to basis of property74 7#b7 ,time for and scope of election ,the election provided by paragraph 7#a7 may be made for any taxable year1 but only if made not later than the time prescribed by law for filing the return for such taxable year 7including extensions thereof74 ,the method so elected1 and the period selected by the taxpayer1 shall be adhered to in computing taxable income for the taxable year for which the election is made and for all subsequent taxable years unless1 with the approval of the ,secretary1 a change to a different method 7or to a different period7 is authorized with respect to part or all of such expenditures4 ,the election shall not apply to any expenditure paid or incurred during any taxable year before the taxable year for which the taxpayer makes the election4 7c7 ,land and ,other ,property ,this section shall not apply to any expenditure for the acquisition or improvement of land1 or for the acquisition or improvement of property to be used in connection with the research or experimentation and of a character which is subject to the allowance under section #afg 7relating to allowance for depreciation1 etc47 or section #faa 7relating to allowance for depletion72 but for purposes of this section allowances under section #afg1 and allowances under section #faa1 shall be considered as expenditures4 7d7 ,exploration ,expenditures ,this section shall not apply to any expenditure paid or incurred for the purpose of ascertaining the existence1 location1 extent1 or quality of any deposit of ore or other mineral 7including oil and gas74 7e7 ,only ,reasonable ,research ,expenditures ,eligible ,this section shall apply to a research or experimental expenditure only to the extent that the amount thereof is reasonable under the circumstances4 4 7b7 ,clerical ,amendment ,the table of sections for part ,,vi of subchapter ,b of chapter #a is amended by striking the item relating to section #agd and inserting the following new item3 ,sec4 #agd4 ,research and experimental expenditures 4 7c7 ,conforming ,amendments 7#a7 ,section #da7;d77#a77;,a7 is amended by striking specified research or experimental expenditures under section #agd and inserting expenses under section #agd4 7#b7 ,section #bhj;,c7c7 is amended to read as follows3 7c7 ,credit for ,increasing ,research ,activities 7#a7 ,in general ,no deduction shall be allowed for that portion of the qualified research expenses 7as defined in section #da7;b77 or basic research expenses 7as defined in section #da7;e77#b77 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 #da7;a74 7#b7 ,similar rule where taxpayer capitalizes rather than deducts expenses ,if-- 7,a7 the amount of the credit determined for the taxable year under section #da7;a77#a71 exceeds 7,b7 the amount allowable as a deduction for such taxable year for qualified research expenses or basic research expenses 7determined without regard to paragraph 7#a771 the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess4 7#c7 ,election of reduced credit 7,a7 ,in general ,in the case of any taxable year for which an election is made under this paragraph-- 7i7 paragraphs 7#a7 and 7#b7 shall not apply1 and 7ii7 the amount of the credit under section #da7;a7 shall be the amount determined under subparagraph 7,b74 7,b7 ,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-- 7i7 the amount of credit determined under section #da7;a7 without regard to this paragraph1 over 7ii7 the product of-- 7,i7 the amount described in clause 7i71 and 7,,ii7 the rate of tax under section #aa7;b74 7,c7 ,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 7including extensions71 shall be made on such return1 and shall be made in such manner as the ,secretary may prescribe4 ,such an election1 once made1 shall be irrevocable4 7#d7 ,controlled groups ,paragraph 7#c7 of subsection 7b7 shall apply for purposes of this subsection4 4 7d7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after ,december #ca1 #bjba4 #bjb4 ,doubling the research and experimental tax credit and better access to credits for startups 7a7 ,credit rate increase 7#a7 ,in general ,section #da7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking #bj percent and inserting #dj percent4 7#b7 ,alternative simplified credit ,section #da7;c77#d77;,a7 of such ,code is amended by striking #ad percent and inserting #bh percent4 7#c7 ,credit rate in case of no research expenses in #c preceding years ,section #da7;c77#d77;,b77ii7 of such ,code is amended by striking #f percent and inserting #a_/b the credit percentage in effect under subparagraph 7,a74 7b7 ,modification of small business portion allowed against payroll tax 7#a7 ,increase in limitation ,paragraphs 7#d77;,b77i7 and 7#e77;,b77ii7 of section #da7;h7 of such ,code are each amended by striking #bej1jjj and inserting #ejj1jjj4 7#b7 ,qualified small business gross receipts threshold ,section #da7;h77#c77;,a77i77,i7 of such ,code is amended by striking #e1jjj1jjj and inserting the dollar amount in effect for the taxable year under section #ddh7;c77#a74 7c7 ,effective dates 7#a7 ,subsection 7a7 ,the amendments made by subsection 7a7 shall apply to taxable years beginning after ,december #ca1 #bjbj4 7#b7 ,subsection 7b7 ,the amendments made by subsection 7b7 shall apply to taxable years beginning after ,december #ca1 #bjai4 #bjc4 ,special rules for transfers of intangible property from controlled foreign corporations to ,united ,states shareholders 7a7 ,in general ,subpart ,f of part ,,iii of subchapter ,n of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #iff4 ,transfers of intangible property to ,united ,states shareholders 7a7 ,in general ,if a controlled foreign corporation holds intangible property on the date of the enactment of this section and thereafter distributes such property to a domestic corporation which is a ,united ,states shareholder with respect to such controlled foreign corporation-- 7#a7 for purposes of part ,i of subchapter ,c and any other provision of this title specified by the ,secretary1 the fair market value of such property on the date of such distribution shall be treated as not exceeding the adjusted basis of such property immediately before such distribution1 and 7#b7 if any portion of such distribution is not a dividend-- 7,a7 no gain shall be recognized by such ,united ,states shareholder with respect to such distribution1 and 7,b7 the adjusted basis of such property in the hands of such ,united ,states shareholder immediately after such distribution shall be the adjusted basis of such property in the hands of such controlled foreign corporation immediately before such distribution reduced by the amount 7if any7 of gain not recognized by reason of subparagraph 7,a7 7determined after the application of paragraph 7#a774 7b7 ,intangible property ,for purposes of this section1 the term intangible property means any-- 7#a7 patent1 copyright1 license1 invention1 formula1 process1 design1 pattern1 know-how1 or format1 7#b7 method1 program1 system1 procedure1 campaign1 survey1 study1 forecast1 estimate1 or technical data1 7#c7 computer software 7as defined in section #aig7;e77#c77;,b771 or 7#d7 any similar item1 which has substantial value independent of the services of any individual4 4 7b7 ,conforming amendments 7#a7 ,section #aig7;f77#b77;,b77i7 of such ,code is amended by inserting #iff7;a71 after #gca14 7#b7 ,the table of sections for subpart ,f of part ,,iii of subchapter ,n of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #iff4 ,transfers of intangible property to ,united ,states shareholders4 4 7c7 ,effective date ,the amendments made by this section shall apply to distributions made in taxable years of foreign corporations beginning after ,december #ca1 #bjbj1 and to taxable years of ,united ,states shareholders in which or with which such taxable years of foreign corporations end4 ,,iii ,growth in ,america's ,medical ,independence #cja4 ,domestic medical and drug manufacturing credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,u4 ,domestic medical and drug manufacturing credit 7a7 ,in general ,for purposes of section #ch1 the domestic medical and drug manufacturing credit determined under this section for any taxable year is an amount equal to #aj4e percent of the lesser of-- 7#a7 the qualified medical and drug manufacturing income of the taxpayer for the taxable year1 or 7#b7 taxable income of the taxpayer for the taxable year4 7b7 ,credit limited to wages paid 7#a7 ,in general ,the amount of the credit allowable under subsection 7a7 for any taxable year shall not exceed #ej percent of the ,w-#b wages of the taxpayer for the taxable year4 7#b7 ,w-#b wages ,for purposes of this section-- 7,a7 ,in general ,the term ,w-#b wages means1 with respect to any person for any taxable year of such person1 the sum of the amounts described in paragraphs 7#c7 and 7#h7 of section #fjea7;a7 paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year4 7,b7 ,limitation to wages attributable to domestic production ,such term shall not include any amount which is not properly allocable to domestic medical and drug manufacturing gross receipts for purposes of subsection 7c77#a74 7,c7 ,return requirement ,such term shall not include any amount which is not properly included in a return filed with the ,social ,security ,administration on or before the #fjth day after the due date 7including extensions7 for such return4 7#c7 ,acquisitions1 dispositions1 and short taxable years ,the ,secretary shall provide for the application of this subsection in cases of a short taxable year or where the taxpayer acquires1 or disposes of1 the major portion of a trade or business or the major portion of a separate unit of a trade or business during the taxable year4 7c7 ,qualified medical and drug manufacturing income ,for purposes of this section-- 7#a7 ,in general ,the term qualified medical and drug manufacturing income for any taxable year means an amount equal to the excess 7if any7 of-- 7,a7 the taxpayer's domestic medical and drug manufacturing gross receipts for the taxable year1 over 7,b7 the sum of-- 7i7 the cost of goods sold that are allocable to such receipts1 and 7ii7 other expenses1 losses1 or deductions which are properly allocable to such receipts4 7#b7 ,allocation method ,the ,secretary shall prescribe rules for the proper allocation of items described in paragraph 7#a77;,b7 for purposes of determining qualified medical and drug manufacturing income4 ,such rules shall provide for the proper allocation of items whether or not such items are directly allocable to domestic medical and drug manufacturing gross receipts4 7#c7 ,special rules for determining costs 7,a7 ,in general ,for purposes of determining costs under clause 7i7 of paragraph 7#a77;,b71 any item or service brought into the ,united ,states shall be treated as acquired by purchase1 and its cost shall be treated as not less than its value immediately after it entered the ,united ,states4 7,b7 ,exports for further manufacture ,in the case of any property described in subparagraph 7,a7 that had been exported by the taxpayer for further manufacture1 the increase in cost or adjusted basis under subparagraph 7,a7 shall not exceed the difference between the value of the property when exported and the value of the property when brought back into the ,united ,states after the further manufacture4 7#d7 ,domestic medical and drug manufacturing gross receipts 7,a7 ,in general ,the term domestic medical and drug manufacturing gross receipts means the gross receipts of the taxpayer which are derived from any sale1 exchange1 or other disposition of-- 7i7 any active pharmaceutical ingredient1 or 7ii7 any qualified countermeasure1 which was manufactured or produced by the taxpayer in whole or in significant part within the ,united ,states4 7,b7 ,active pharmaceutical ingredient ,the term active pharmaceutical ingredient means any substance or mixture of substances intended to be used in the manufacture of a drug product and 7when so used7 becomes an active ingredient in the drug product4 7,c7 ,qualified countermeasure ,the term qualified countermeasure has the meaning given such term in section #cai;,f-#a7;a77#b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bdg;d-#f;a7a77#b7740 7,d7 ,partnerships owned by expanded affiliated groups ,for purposes of this paragraph1 if all of the interests in the capital and profits of a partnership are owned by members of a single expanded affiliated group at all times during the taxable year of such partnership1 the partnership and all members of such group shall be treated as a single taxpayer during such period4 7d7 ,definitions and ,special ,rules ,for purposes of this section-- 7#a7 ,application of section to pass-thru entities 7,a7 ,partnerships and s corporations ,in the case of a partnership or ,s corporation-- 7i7 this section shall be applied at the partner or shareholder level1 7ii7 each partner or shareholder shall take into account such person's allocable share of each item described in subparagraph 7,a7 or 7,b7 of subsection 7c77#a7 7determined without regard to whether the items described in such subparagraph 7,a7 exceed the items described in such subparagraph 7,b771 and 7iii7 each partner or shareholder shall be treated for purposes of subsection 7b7 as having ,w-#b wages for the taxable year in an amount equal to such person's allocable share of the ,w-#b wages of the partnership or ,s corporation for the taxable year 7as determined under regulations prescribed by the ,secretary74 7,b7 ,trusts and estates ,in the case of a trust or estate-- 7i7 the items referred to in subparagraph 7,a77ii7 7as determined therein7 and the ,w-#b wages of the trust or estate for the taxable year1 shall be apportioned between the beneficiaries and the fiduciary 7and among the beneficiaries7 under regulations prescribed by the ,secretary1 and 7ii7 for purposes of paragraph 7#b71 adjusted gross income of the trust or estate shall be determined as provided in section #fg7;e7 with the adjustments described in such paragraph4 7,c7 ,regulations ,the ,secretary may prescribe rules requiring or restricting the allocation of items and wages under this paragraph and may prescribe such reporting requirements as the ,secretary determines appropriate4 7#b7 ,application to individuals ,in the case of an individual1 subsection 7a77#b7 shall be applied by substituting adjusted gross income for taxable income4 ,for purposes of the preceding sentence1 adjusted gross income shall be determined after application of sections #hf1 #ace1 #acg1 #bai1 #bba1 #bbb1 and #dfi4 7#c7 ,special rule for affiliated groups 7,a7 ,in general ,all members of an expanded affiliated group shall be treated as a single corporation for purposes of this section4 7,b7 ,expanded affiliated group ,for purposes of this section1 the term expanded affiliated group means an affiliated group as defined in section #aejd7;a71 determined-- 7i7 by substituting more than #ej percent for at least #hj percent each place it appears1 and 7ii7 without regard to paragraphs 7#b7 and 7#d7 of section #aejd7;b74 7,c7 ,allocation of credit ,except as provided in regulations1 the credit under subsection 7a7 shall be allocated among the members of the expanded affiliated group in proportion to each member's respective amount 7if any7 of qualified medical and drug manufacturing income4 7#d7 ,trade or business requirement ,this section shall be applied by only taking into account items which are attributable to the actual conduct of a trade or business4 7#e7 ,coordination with minimum tax ,for purposes of determining alternative minimum taxable income under section #ee1 qualified medical and drug manufacturing income shall be determined without regard to any adjustments under sections #ef through #ei4 7#f7 ,unrelated business taxable income ,for purposes of determining the tax imposed by section #eaa1 subsection 7a77#a77;,b7 shall be applied by substituting unrelated business taxable income for taxable income4 7#g7 ,regulations ,the ,secretary shall prescribe such regulations as are necessary to carry out the purposes of this section1 including regulations which prevent more than #a taxpayer from being allowed a credit under this section with respect to any activity described in subsection 7c77#d77;,a74 4 7b7 ,treatment under base erosion tax ,section #ei;,a7b77#a77;,b77ii7 of such ,code is amended by striking plus at the end of subclause 7,i71 by redesignating subclause 7,,ii7 as subclause 7,,iii71 and by inserting after subclause 7,i7 the following new subclause3 7,,ii7 the credit allowed under section #ch for the taxable year which is properly allocable to the domestic medical and drug manufacturing credit determined under section #de,u7a71 plus 4 7c7 ,part of general business credit ,section #ch7;b7 of such ,code is amended by striking plus at the end of paragraph 7#cb71 by striking the period at the end of paragraph 7#cc7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#cd7 the domestic medical and drug manufacturing credit determined under section #de,u7a74 4 7d7 ,credit allowed against alternative minimum tax ,section #ch7;c77#d77;,b7 of such ,code is amended by redesignating clauses 7x7 through 7xii7 as clauses 7xi7 through 7xiii71 respectively1 and by inserting after clause 7ix7 the following new clause3 7x7 the credit determined under section #de,u1 4 7e7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #de,u4 ,domestic medical and drug manufacturing credit4 4 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbj4 #cjb4 ,qualifying advanced medical manufacturing equipment credit 7a7 ,in general ,subpart ,e of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #dh;,d4 ,qualifying advanced medical manufacturing equipment credit 7a7 ,in general ,for purposes of section #df1 the qualifying advanced medical manufacturing equipment credit determined under this section for any taxable year is the applicable percentage of the basis of any qualifying advanced medical manufacturing equipment placed in service during such taxable year4 7b7 ,applicable percentage ,for purposes of subsection 7a71 the applicable percentage is-- 7#a7 #cj percent in the case of equipment which is placed in service before ,january #a1 #bjbh1 7#b7 #bj percent in the case of equipment which is placed in service during calendar year #bjbh1 7#c7 #aj percent in the case of equipment which is placed in service during calendar year #bjbi1 and 7#d7 #j percent in the case of equipment which is placed in service after ,december #ca1 #bjbi4 7c7 ,qualifying advanced medical manufacturing equipment ,for purposes of this section1 the term qualifying advanced medical manufacturing equipment means property of a character subject to the allowance for depreciation-- 7#a7 which is machinery or equipment that is designed and used to manufacture a-- 7,a7 drug 7as such term is defined in section #bja7;g77#a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act71 7,b7 device 7as such term is defined in section #bja7;h7 of such ,act71 or 7,c7 biological product 7as such term is defined in section #cea7;i7 of the ,public ,health ,service ,act71 7#b7 which has been identified by the ,secretary 7after consultation with the ,secretary of ,health and ,human ,services7 as machinery or equipment that-- 7,a7 incorporates novel technology or uses an established technique or technology in a new or innovative way1 or 7,b7 that can improve medical product quality1 address shortages of medicines1 and speed time-to-market1 7#c7 which is placed in service in the ,united ,states by the taxpayer1 and 7#d7 with respect to which depreciation is allowable4 7d7 ,certain qualified progress expenditures rules made applicable ,rules similar to the rules of subsections 7c77#d7 and 7d7 of section #df 7as in effect on the day before the enactment of the ,revenue ,reconciliation ,act of #aiij7 shall apply for purposes of this section4 7e7 ,regulations ,the ,secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section1 including regulations which prevent abuse or fraud4 4 7b7 ,treatment under base erosion tax ,section #ei;,a7b77#a77;,b77ii7 of such ,code1 as amended by section #g of this ,act1 is further amended by striking plus at the end of subclause 7,,ii71 by redesignating subclause 7,,iii7 as subclause 7,,iv71 and by inserting after subclause 7,,ii7 the following new subclause3 7,,iii7 the credit allowed under section #df for the taxable year which is properly allocable to the qualifying advanced medical manufacturing equipment credit determined under section #dh;,d7a71 plus 4 7c7 ,part of investment credit ,section #df of such ,code is amended by striking and at the end of paragraph 7#e71 by striking the period at the end of paragraph 7#f7 and inserting 1 and1 and by adding at the end the following new paragraph3 7#g7 the qualifying advanced medical manufacturing equipment credit4 4 7d7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #dh;,d4 ,qualifying advanced medical manufacturing equipment credit4 4 7e7 ,effective date ,the amendments made by this section shall apply to periods after the date of the enactment of this section under rules similar to the rules of section #dh7m7 of the ,internal ,revenue ,code of #aihf 7as in effect on the date of the enactment fo the ,revenue ,reconciliation ,act of #aiij74 #cjc4 ,new medical research expenditure component of credit for increasing research activities 7a7 ,in general ,section #da7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of paragraph 7#b71 by striking the period at the end of paragraph 7#c7 and inserting 1 and1 and by adding at the end the following new paragraph3 7#d7 #ad percent of specified medical research expenditures4 4 7b7 ,specified medical research expenditures ,section #da7;f7 of such ,code is amended by adding at the end the following new paragraph3 7#g7 ,specified medical research expenditures 7,a7 ,in general ,the term specified medical research expenditures means amounts paid or incurred for qualified research with respect to any qualified countermeasure4 7,b7 ,qualified countermeasure ,the term qualified countermeasure has the meaning given to such term in section #cai;,f-#a7;a77#b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bdg;d-#f;a7a77#b774 4 7c7 ,denial of double benefit 7#a7 ,taxable years beginning before ,january #a1 #bjba ,in the case of specified medical research expenditures 7as defined in section #da7;f77#g7 of such ,code 7as added by this section77 paid or incurred in taxable years beginning before ,january #a1 #bjba-- 7,a7 such expenditures shall be treated in the same manner as qualified research expenses and basic research expenses under section #bhj;,c7c77#a7 of such ,code 7as in effect on the day before the enactment of the ,tax ,cuts and ,jobs ,act71 and 7,b7 the amount determined under section #bhj;,c7c77#b77;,a7 7as in effect on such day7 for the taxable year shall be increased by the amount of credit determined for the taxable year under section #da7;a77#d7 7as added by this section74 7#b7 ,taxable years beginning after ,december #ca1 #bjbj ,section #bhj;,c7c77#a7 of such ,code is amended by striking section #da7;a77#a7 and inserting paragraphs 7#a7 and 7#d7 of section #da7;a74 7d7 ,conforming amendment ,section #da7;f77#a7 of such ,code is amended by striking and amounts paid or incurred to energy research consortiums each place it appears and inserting 1 amounts paid or incurred to energy research consortiums1 and specified medical research expenditures4 7e7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this ,act1 in taxable years ending after such date4 #cjd4 ,refundable portion of research credit for small businesses engaging in specified medical research 7a7 ,in general ,section #da of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7i7 ,refundable portion for small businesses engaging in specified medical research 7#a7 ,in general ,at the election of a medical research small business1 the portion of the credit determined under this section for the taxable year which is properly allocable to specified medical research shall be treated 7other than for purposes of section #bhj;,c7 as a credit allowed under subpart ,c 7and not this subpart74 7#b7 ,medical research small business ,for purposes of this subsection1 the term medical research small business means any domestic ,c corporation-- 7,a7 which conducts any specified medical research during the taxable year1 and 7,b7 the gross receipts of which 7determined under the rules of subsection 7c77 for the taxable year do not exceed #a1jjj1jjj4 7#c7 ,specified medical research ,for purposes of this subsection1 the term specified medical research means any qualified research with respect to qualified countermeasures 7as defined in section #cai;,f-#a7;a77#b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bdg;d-#f;a7a77#b7774 7#d7 ,election ,any election under this subsection for any taxable year-- 7,a7 shall specify the amount of the credit to which such election applies1 7,b7 shall be made on or before the due date 7including extensions7 of the return of tax for the taxable year1 7,c7 may not be made for any taxable year with respect to any portion of the credit determined under this section with respect to which an election is made under subsection 7h71 and 7,d7 may be revoked only with the consent of the ,secretary4 7#e7 ,regulations ,the ,secretary shall prescribe such regulations for purposes of this subsection as may be necessary or appropriate for determining proper allocation to specified medical research of the portion of any credit allowed to a taxpayer for a taxable year under this section4 4 7b7 ,conforming amendment ,section #acbd7;b7 of title #ca1 ,united ,states ,code1 is amended by inserting #da7;i71 after #fdbh14 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbj4 #cje4 ,exception from passive loss rules for investments in specified medical research small business pass-thru entities 7a7 ,in general ,subsection 7c7 of section #dfi of the ,internal ,revenue ,code of #aihf 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 ,specified medical research activities 7,a7 ,in general ,the term passive activity shall not include any qualified medical research activity of the taxpayer carried on by a specified medical research small business pass-thru entity4 7,b7 ,treatment of losses and deductions 7i7 ,in general ,losses or deductions of a taxpayer in connection with qualified medical research activities carried on by a specified medical 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 in connection with a specified medical small business pass-thru entity for a taxable year only to the extent that the aggregate losses and deductions of the taxpayer in connection with qualified medical 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 medical 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 medical research activity ,for purposes of this paragraph1 the term qualified medical research activity means any qualified research 7within the meaning of section #da7;d77 with respect to qualified countermeasures 7as defined in section #cai;,f-#a7;a77#b7 of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bdg;d-#f;a7a77#b7774 7,e7 ,specified medical research small business pass-thru entity ,for purposes of this paragraph1 the term specified medical research small business pass-thru entity means any domestic pass-thru entity for any taxable year if-- 7i7 more than #hj percent of such entity's expenditures on qualified research for such taxable year are paid or incurred in connection with qualified medical research activities1 and 7ii7 the gross receipts 7as determined under the rules of section #da7;h77#c77 of such entity for the taxable year 7and each preceding taxable year7 is less than #a1jjj1jjj4 7,f7 ,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,g7 ,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,h7 ,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 specified medical research small business pass-thru entity unless such entity qualifies as such both with and without the application of clause 7i74 4 7b7 ,material participation not required ,paragraph 7#e7 of section #dfi7;c7 of the ,internal ,revenue ,code of #aihf1 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 specified medical 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 the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,e7 ,exception for specified medical research small business pass-thru entities ,in the case of a specified medical 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 credit of an individual taxpayer determined under section #da to the extent attributable to a specified medical 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 specified medical research small business pass-thru entity 7as defined in section #dfi7;c77#d7744 7e7 ,effective date ,the amendments made by this section shall apply to losses and credits arising in taxable years beginning after ,december #ca1 #bjbj4 ,,iv ,growth in ,innovation and ,technology ,breakthroughs #dja4 ,simplification and expansion of deduction for start-up and organizational expenditures 7a7 ,in general ,section #aie of the ,internal ,revenue ,code of #aihf is amended by redesignating subsections 7c7 and 7d7 as subsections 7d7 and 7e71 respectively1 and by striking all that precedes subsection 7d7 7as so redesignated7 and inserting the following3 #aie4 ,start-up and organizational expenditures 7a7 ,capitalization of expenditures ,except as otherwise provided in this section1 no deduction shall be allowed for start-up or organizational expenditures4 7b7 ,election ,to deduct 7#a7 ,in general ,if a taxpayer elects the application of this subsection with respect to any active trade or business-- 7,a7 the taxpayer shall be allowed a deduction for the taxable year in which such active trade or business begins in an amount equal to the lesser of-- 7i7 the aggregate amount of start-up and organizational expenditures paid or incurred in connection with such active trade or business1 or 7ii7 #bj1jjj1 reduced 7but not below zero7 by the amount by which such aggregate amount exceeds #abj1jjj1 and 7,b7 the remainder of such start-up and organizational expenditures shall be charged to capital account and allowed as an amortization deduction determined by amortizing such expenditures ratably over the #ahj-month period beginning with the month in which the active trade or business begins4 7#b7 ,application to organizational expenditures ,in the case of organizational expenditures with respect to any corporation or partnership1 the active trade or business referred to in paragraph 7#a7 means the first active trade or business carried on by such corporation or partnership4 7#c7 ,inflation adjustment ,in the case of any taxable year beginning after ,december #ca1 #bjbj1 the #bj1jjj and #abj1jjj amounts in paragraph 7#a77;,a77ii7 shall each be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjai for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,if any amount as increased under the preceding sentence is not a multiple of #a1jjj1 such amount shall be rounded to the nearest multiple of #a1jjj4 7c7 ,allowance of deduction upon liquidation or disposition 7#a7 ,liquidation of partnership or corporation ,if any partnership or corporation is completely liquidated by the taxpayer1 any start-up or organizational expenditures paid or incurred in connection with such partnership or corporation which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section #afe4 7#b7 ,disposition of trade or business ,if any trade or business is completely disposed of or discontinued by the taxpayer1 any start-up expenditures paid or incurred in connection with such trade or business which were not allowed as a deduction by reason of this section 7and not taken into account in connection with a liquidation to which paragraph 7#a7 applies7 may be deducted to the extent allowable under section #afe4 ,for purposes of this paragraph1 in the case of any deduction allowed under subsection 7b77#a7 with respect to both start-up and organizational expenditures1 the amount treated as so allowed with respect to start-up expenditures shall bear the same ratio to such deduction as the start-up expenditures taken into account in determining such deduction bears to the aggregate of the start-up and organizational expenditures so taken into account4 4 7b7 ,organizational expenditures ,section #aie7;d7 of such ,code1 as redesignated by subsection 7a71 is amended by adding at the end the following new paragraphs3 7#c7 ,organizational expenditures ,the term organizational expenditures means any expenditure which-- 7,a7 is incident to the creation of a corporation or a partnership1 7,b7 is chargeable to capital account1 and 7,c7 is of a character which1 if expended incident to the creation of a corporation or a partnership having an ascertainable life1 would be amortizable over such life4 7#d7 ,application to certain disregarded entities ,in the case of any entity with a single owner that is disregarded as an entity separate from its owner1 this section shall be applied in the same manner as if such entity were a corporation4 4 7c7 ,election ,section #aie7;e77#b7 of such ,code1 as redesignated by subsection 7a71 is amended to read as follows3 7#b7 ,partnerships and ,s corporations ,in the case of any partnership or ,s corporation1 the election under subsection 7b7 shall be made 7and this section shall be applied7 at the entity level4 4 7d7 ,conforming amendments 7#a7 7,a7 ,part ,,viii of subchapter ,b of chapter #a is amended by striking section #bdh of such ,code 7and by striking the item relating to such section in the table of sections of such part74 7,b7 ,section #agj7;b77#b77;,d77ii7 of such ,code is amended by striking 7except section #bdh74 7,c7 ,section #cab7n77#c7 of such ,code is amended by striking ,sections #agc and #bdh and inserting ,sections #agc and #aie4 7,d7 ,section #ece7;b77#c7 of such ,code is amended by striking 7except section #bdh74 7,e7 ,section #ede7;b77#c7 of such ,code is amended by striking 7except section #bdh74 7,f7 ,section #ede7;b77#d7 of such ,code is amended by striking 7except section #bdh74 7,g7 ,section #hcd7;c77#g7 of such ,code is amended by striking 7except section #bdh74 7,h7 ,section #heb7;b77#b77;,c7 of such ,code is amended by striking 7except section #bdh74 7,i7 ,section #heg7;b77#b77;,a7 of such ,code is amended by striking 7except section #bdh74 7,j7 ,section #acfc7;b7 of such ,code is amended by adding and at the end of paragraph 7#b71 by striking paragraph 7#c71 and by redesignating paragraph 7#d7 as paragraph 7#c74 7,k7 ,section #acge7;b77#a77;,b77i7 of such ,code is amended by striking 7other than the deduction allowed by section #bdh1 relating to organization expenditures74 7#b7 7,a7 ,section #gji of such ,code is amended to read as follows3 #gji4 ,treatment of syndication fees ,no deduction shall be allowed under this chapter to a partnership or to any partner of the partnership for any amounts paid or incurred to promote the sale of 7or to sell7 an interest in the partnership4 4 7,b7 ,the item relating to section #gji in the table of sections for part ,i of subchapter ,k of chapter #a of such ,code is amended to read as follows3 ,sec4 #gji4 ,treatment of syndication fees4 4 7#c7 ,section #abjb7;e77#b77;,a7 of such ,code is amended by striking section #aie7;c77#a77;,a7 and inserting section #aie7;d77#a77;,a74 7#d7 ,the item relating to section #aie in the table of contents of part ,,vi of subchapter ,b of chapter #a of such ,code is amended to read as follows3 ,sec4 #aie4 ,start-up and organizational expenditures4 4 7e7 ,effective date ,the amendments made by this section shall apply to expenditures paid or incurred in connection with active trades or businesses which begin in taxable years beginning after ,december #ca1 #bjai4 #djb4 ,preservation of start-up net operating losses and tax credits after ownership change 7a7 ,application to net operating losses ,section #chb7;d7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#d7 ,exception for start-up losses 7,a7 ,in general ,in the case of any net operating loss carryforward described in paragraph 7#a77;,a7 which arose in a start-up period taxable year1 the amount of such net operating loss carryforward otherwise taken into account under such paragraph shall be reduced by the net start-up loss determined with respect to the trade or business referred to in subparagraph 7,b77i7 for such start-up period taxable year4 7,b7 ,start-up period taxable year ,the term start-up period taxable year means any taxable year of the old loss corporation which-- 7i7 begins before the close of the #c-year period beginning on the date on which any trade or business of such corporation begins as an active trade or business 7as determined under section #aie7;d77#b7 without regard to subparagraph 7,b7 thereof71 and 7ii7 ends after ,may #ca1 #bjbj4 7,c7 ,net start-up loss 7i7 ,in general ,the term net start-up loss means1 with respect to any trade or business referred to in subparagraph 7,b77i7 for any start-up period taxable year1 the amount which bears the same ratio 7but not greater than #a7 to the net operating loss carryforward which arose in such start-up period taxable year as-- 7,i7 the net operating loss 7if any7 which would have been determined for such start-up period taxable year if only items of income1 gain1 deduction1 and loss properly allocable to such trade or business were taken into account1 bears to 7,,ii7 the amount of the net operating loss determined for such start-up period taxable year4 7ii7 ,special rule for last taxable year in start-up period ,in the case of any start-up period taxable year which ends after the close of the #c-year period described in subparagraph 7,b77i7 with respect to any trade or business1 the net start-up loss with respect to such trade or business for such start-up period taxable year shall be the same proportion of such loss 7determined without regard to this clause7 as the proportion of such start-up period taxable year which is on or before the last day of such period4 7,d7 ,application to net operating loss arising in year of ownership change ,subparagraph 7,a7 shall apply to any net operating loss described in paragraph 7#a77;,b7 in the same manner as such subparagraph applies to net operating loss carryforwards described in paragraph 7#a77;,a71 but by only taking into account the amount of such net operating loss 7and the amount of the net start-up loss7 which is allocable under paragraph 7#a77;,b7 to the period described in such paragraph4 ,proper adjustment in the allocation of the net start-up loss under the preceding sentence shall be made in the case of a taxable year to which subparagraph 7,c77ii7 applies4 7,e7 ,application to taxable years which are start-up period taxable years with respect to more than #a trade or business ,in the case of any net operating loss carryforward which arose in a taxable year which is a start-up period taxable year with respect to more than #a trade or business-- 7i7 this paragraph shall be applied separately with respect to each such trade or business1 and 7ii7 the aggregate reductions under subparagraph 7,a7 shall not exceed such net operating loss carryforward4 7,f7 ,continuity of business requirement ,if the new loss corporation does not continue the trade or business referred to in subparagraph 7,b77i7 at all times during the #b-year period beginning on the change date1 this paragraph shall not apply with respect to such trade or business4 7,g7 ,certain title #aa or similar cases 7i7 ,multiple ownership changes ,in the case of a #bnd ownership change to which subsection 7l77#e77;,d7 applies1 this paragraph shall not apply for purposes of determining the pre-change loss with respect to such #bnd ownership change4 7ii7 ,certain insolvency transactions ,if subsection 7l77#f7 applies for purposes of determining the value of the old loss corporation under subsection 7e71 this paragraph shall not apply4 7,h7 ,not applicable to disallowed interest ,this paragraph shall not apply for purposes of applying the rules of paragraph 7#a7 to the carryover of disallowed interest under paragraph 7#c74 7,i7 ,transition rule ,this paragraph shall not apply with respect to any trade or business if the date on which such trade or business begins as an active trade or business 7as determined under section #aie7;d77#b7 without regard to subparagraph 7,b7 thereof7 is on or before ,may #ca1 #bjbj4 4 7b7 ,application to excess credits ,section #chc of such ,code is amended by redesignating subsection 7e7 as subsection 7f7 and by inserting after subsection 7d7 the following new subsection3 7e7 ,exception for start-,up excess credits 7#a7 ,in general ,in the case of any unused general business credit of the corporation under section #ci which arose in a start-up period taxable year1 the amount of such unused general business credit otherwise taken into account under subsection 7a77#b77;,a7 shall be reduced by the start-up excess credit determined with respect to any trade or business referred to in section #chb7;d77#d77;,b77i7 for such start-up period taxable year4 7#b7 ,start-up period taxable year ,for purposes of this subsection1 the term start-up period taxable year has the meaning given such term in section #chb7;d77#d77;,b74 7#c7 ,start-up excess credit ,for purposes of this subsection1 the term start-up excess credit means1 with respect to any trade or business referred to in section #chb7;d77#d77;,b77i7 for any start-up period taxable year1 the amount which bears the same ratio to the unused general business credit which arose in such start-up period taxable year as-- 7,a7 the amount of the general business credit which would have been determined for such start-up period taxable year if only credits properly allocable to such trade or business were taken into account1 bears to 7,b7 the amount of the general business credit determined for such start-up period taxable year4 7#d7 ,application of certain rules ,rules similar to the rules of subparagraphs 7,c77ii71 7,d71 7,e71 and 7,f7 of section #chb7;d77#d7 shall apply for purposes of this subsection4 7#e7 ,transition rule ,this subsection shall not apply with respect to any trade or business if the date on which such trade or business begins as an active trade or business 7as determined under section #aie7;d77#b7 without regard to subparagraph 7,b7 thereof7 is on or before ,may #ca1 #bjbj4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years ending after ,may #ca1 #bjbj4