,i #aafth ,,congress #b;d ,session ,h4 ,r4 #giag ,,in ,,the ,,house ,,of ,,representatives ,july #ca1 #bjbj,mr4 ,phillips 7for himself and ,mrs4 ,walorski7 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 provide for advance refunds of certain net operating losses and research expenditures relating to ,,covid-#ai1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,innovation and ,growth ,now by ,investing in ,tomorrow's ,enterprises ,act or the ,,ignite ,american ,innovation ,act4 #b4 ,advance refunds of net operating losses for ,c corporation taxpayers 7a7 ,in general 7#a7 ,net operating loss carryovers ,section #agb of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7g7 as subsection 7h7 and by inserting after subsection 7f7 the following3 7g7 ,advance refund for ,c corporations relating to certain carryovers arising during #bjae through #bjba 7#a7 ,in general 7,a7 ,election ,a taxpayer to whom this paragraph applies may elect an advance refund of net operating loss carryovers in the amounts and manner determined under subparagraphs 7,b7 and 7,c74 7,b7 ,net operating loss carryovers arising during #bjae through #bjba ,the advance refund determined under this subparagraph is an amount elected by the taxpayer in lieu of an election with respect to a net operating loss carryback under subsection 7b77#a77;,d71 in the amount equal to-- 7i7 the rate set forth in section #aa 7as in effect on the date of the enactment of this paragraph71 multiplied by 7ii7 any net operating loss carryovers that arose-- 7,i7 in a taxable year beginning on or after ,january #a1 #bjae1 and before ,january #a1 #bjbj1 or 7,,ii7 in a taxable year beginning on or after ,january #a1 #bjai1 and before ,january #a1 #bjbb4 7,c7 ,,covid-#ai research expenditures for #bjbj and #bjba ,the advance refund under this subparagraph is the amount of the advance refund with respect to the portion of any net operating loss attributable to and arising from qualified ,,covid-#ai research expenditures that are paid or incurred on or after ,february #ae1 #bjbj and before ,january #a1 #bjbb1 that is equal to #bjj percent of the amount otherwise taken into account under paragraph 7#a77;,b77ii74 ,a net operating loss shall be treated as arising from qualified ,,covid-#ai research expenditures to the extent that such expenses are paid or incurred by the taxpayer4 7#b7 ,qualified ,,covid-#ai research expenditures ,for purposes of this subsection1 the term qualified ,,covid-#ai research expenditures means expenditures paid or incurred in connection with the research and development of products regulated by the ,food and ,drug ,administration 7including biologics1 drugs1 and devices7 that are intended to be used in the diagnosis1 prevention and treatment of coronavirus disease #bjai 7,,covid-#ai71 and such other similar expenditures as prescribed by the ,secretary in regulations4 7#c7 ,taxpayer described ,for purposes of paragraph 7#a71 this subsection applies to a taxpayer if-- 7,a7 the taxpayer is a ,c corporation1 7,b7 the average number of full-time employees 7as determined for purposes of determining whether an employer is an applicable large employer for purposes of section #dihj;,h7c77#b7 of the ,internal ,revenue ,code of #aihf7 employed by the taxpayer during calendar year #bjai or #bjbj1 whichever is greater1 is greater than five and did not exceed #a1ejj1 and 7,c7 the taxpayer has complied to date with filing of all forms or return requirements under section #cajb1 #caaa1 #ccja1 and #cdjb with respect to calendar years #bjai and #bjbj4 7#d7 ,special rules ,for purposes of this subsection-- 7,a7 ,certain contributions of capital not taken into account in determining ownership change under section #chb ,for purposes of determining whether an ownership change has occurred with respect to the loss corporation under section #chb7;g7 in computing the amount of any advance refund under this section1 a transfer of stock in exchange for a capital contribution to such loss corporation shall not be taken into account if-- 7i7 the value of the stock transferred is commensurate with the amount of capital being contributed1 and 7ii7 such exchange is not part of a plan to redeem other shareholders4 7,b7 ,aggregate limitation ,the aggregate amount of net operating loss or net operating loss carryover for which an advance refund is elected pursuant to this subsection shall not exceed #ajj1jjj1jjj4 7,c7 ,reduction of net operating loss ,the net operating losses of the taxpayer determined under subsection 7c7 shall be reduced by the amount of any net operating loss or net operating loss carryover for which an advance refund is elected pursuant to this subsection1 including the amount of any net operating loss to which paragraph 7#a77;,c7 applies4 7,d7 ,aggregation rule ,all corporations treated as a single employer under subsection 7a7 of section #eb or subsection 7m7 or 7o7 under section #dad shall be treated as a single taxpayer for purposes of this section4 7#e7 ,regulations and guidance ,the ,secretary shall issue such regulations and other guidance as may be necessary to carry out the purposes of this section1 including regulations and other guidance to carry out the purposes of this subsection-- 7,a7 to allow for the making of an election for the application of this subsection in such manner as the ,secretary may by regulations prescribe1 7,b7 to allow the payment of the advance refund in accordance with section #fdbi based on such information as the ,secretary shall require1 7,c7 to allow advance refunds permitted under this subsection to be claimed on such forms as the ,secretary shall prescribe1 and 7,d7 to provide for the application of this subsection to taxpayers that file consolidated returns4 7#f7 ,advance refund ,see section #fdbi for rules for claiming the advance refund4 4 7#b7 ,conforming amendment ,section #agb7;c7 of such ,code is amended by inserting before the period at the end the following3 and with the reduction required by subsection 7g74 7b7 ,advance refund of research credits and orphan drug credits for ,c corporation taxpayers ,section #ci of such ,code is amended by adding at the end the following3 7e7 ,advance refund of research and orphan drug credits 7#a7 ,in general ,a taxpayer that is a ,c corporation may elect an advance refund of the portion of any unused business credit carryforward under section #ci that-- 7,a7 is attributable to the credit determined under section #da or the credit determined under section #de;,c1 and 7,b7 is an unused business credit carryforward carried to a taxable year beginning on or after ,january #a1 #bjbj1 and before ,january #a1 #bjbb1 and that arose in taxable years beginning after ,january #a1 #bjae4 7#b7 ,limitation ,the amount elected under paragraph 7#a7 for a taxable year may not exceed the excess of #be1jjj1jjj reduced by the amount elected for the taxable year as an advance refund of net operating loss carryovers under section #agb7;g74 7#c7 ,inapplicability of sections #ch7;c7 and #chc7;a7 ,for purposes of this subsection1 the amount of any advance refund shall be computed without respect to the limitations under sections #ch7;c7 and #chc7;a74 7#d7 ,regulations and guidance ,the ,secretary shall issue such regulations and other guidance as may be necessary-- 7,a7 to allow for the making of an election under paragraph 7#a7 in such manner as the ,secretary may by regulations prescribe1 7,b7 to allow the advance refund under this subsection and section #fdbi based on such information as the ,secretary shall require1 and 7,c7 to allow advance refunds under this section to be claimed on such forms as the ,secretary shall prescribe4 4 7c7 ,advance refund of certain net operating losses1 research credit1 and orphan drug credit 7#a7 ,in general ,subchapter ,b of chapter #fe of such ,code is amended by inserting after section #fdbh the following new section3 #fdbi4 ,advance refund of certain net operating losses1 research credit1 and orphan drug credit 7a7 ,in general ,in the case of a ,c corporation1 the advance refund sum may be claimed by the taxpayer as follows3 7#a7 ,payroll taxes ,first1 by reducing deposits or payments of-- 7,a7 the applicable employment taxes imposed under sections #caja7;a71 #caja7;b71 #caaa7;a71 and #caaa7;b7 7reduced by any credits allowed under subsections 7e7 and 7f7 of section #caaa1 sections #gjja and #gjjc of the ,families ,first ,coronavirus ,response ,act and section #bcja of the ,coronavirus1 ,aid1 ,relief1 and ,economic ,security ,act7 on the wages paid with respect to the employment of all the employees of the taxpayer for a calendar quarter1 and 7,b7 the withholding taxes required to be paid by an employer pursuant to section #cdjc1 with the balance of the advance refund payable to the taxpayer4 7#b7 ,advance refundability of excess losses ,second1 any remaining amount to be refunded to the taxpayer after the application of paragraph 7#a7 shall be treated as an overpayment and shall be refunded in a manner similar to that prescribed in subsection #bcja7;b77#c7 of the ,coronavirus1 ,aid1 ,relief1 and ,economic ,security ,act4 7b7 ,advance refund sum ,for purposes of subsection 7a71 the term advance refund sum means the sum of-- 7#a7 the amount elected by the taxpayer as an advance refund of net operating loss carryovers under section #agb7;g71 and 7#b7 the amount of any unused business credit carryforward elected under section #ci7;e7 that is attributable to the research credit determined under section #da or the orphan drug credit determined under section #de;,c4 7c7 ,recapture 7#a7 ,in general ,the ,secretary shall1 by regulations1 provide for recapturing the benefit of any advance refund allowable under this section if there is a sale or full or partial liquidation of the corporation during the recapture period4 ,the recapture amount shall not exceed the lesser of-- 7,a7 the amount of any proceeds or distributions received by shareholders of the corporation attributable to such sale or liquidation1 or 7,b7 the amount that the advance refund exceeds the aggregate amount spent by the corporation on payroll1 research expenses1 and property1 plant and equipment during the recapture period4 7#b7 ,recapture period ,for purposes of paragraph 7#a71 the term recapture period means the two-year period beginning on the date of the advance refund4 4 7#b7 ,transfers to ,federal old-age and survivors insurance trust fund ,there are hereby appropriated to the ,federal ,old-,age and ,survivors ,insurance ,trust ,fund and the ,federal ,disability ,insurance ,trust ,fund established under section #bja of the ,social ,security ,act 7#db ,u4,s4,c4 #dja71 the ,federal ,hospital ,insurance ,trust ,fund established under section #ahag7;a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acie;i7a771 and the ,social ,security ,equivalent ,benefit ,account established under section #ae;,a7a7 of the ,railroad ,retirement ,act of #aigd 7#de ,u4,s4,c4 #ad #bcan-#a7;a77 amounts equal to the reduction in revenues to the ,treasury by reason of this section 7without regard to this subsection74 ,amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such ,trust ,fund or ,account had this section not been enacted4 7#c7 ,clerical amendment ,the table of sections for subchapter ,b of chapter #fe of such ,code is amended by inserting after the item relating to section #fdbh the following new item3 ,sec4 #fdbi4 ,advance refund of certain net operating losses1 research credit1 and orphan drug credit4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjai4 #c4 ,enhanced research credit for ,,covid-#ai expenditures 7a7 ,in general ,section #da of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7i7 ,enhanced credit for ,,covid-#ai research expenditures 7#a7 ,in general ,for purposes of determining the amount of qualified research expenses under subsection 7b7 for the taxable year1 the amount of any qualified ,,covid-#ai research expenditures paid or incurred by a taxpayer on or after ,february #ae1 #bjbj1 and before ,january #a1 #bjbb1 shall be equal to #bjj percent of the amount paid or incurred4 7#b7 ,qualified ,,covid-#ai research expenditures ,the term qualified ,,covid-#ai research expenditures has the meaning given such term by section #agb7;g77#b74 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjai4