,,ii #aagth ,,congress #ast ,session ,s4 #bebi ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #bi1 #bjba,mr4 ,menendez 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 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 ,a taxpayer to which this subsection applies for any taxable year beginning in #bjbj or #bjba shall be allowed an advance refund in the amount determined under paragraph 7#b7 for such taxable year4 7#b7 ,amount of the advance refund 7,a7 ,in general ,the advance refund determined under this paragraph for any taxable year is an amount equal the lesser of-- 7i7 the amount specified by the taxpayer in the election to have this subsection apply1 or 7ii7 an amount equal to #ba percent of the sum of-- 7,i7 any net operating loss arising in such taxable year 7reduced by any portion of such net operating loss carried back to a preceding taxable year under subsection 7b77#a77;,d771 plus 7,,ii7 any carryforward to such taxable year of a net operating loss arising in a taxable year beginning after ,december #ca1 #bjad1 and before such taxable year4 7,b7 ,aggregate dollar limitation ,the aggregate amount of advance refunds of a taxpayer under this subsection for all taxable years shall not exceed #ajj1jjj1jjj4 7#c7 ,net operating loss offset by advance refunds ,the net operating loss of the taxpayer for any taxable year to which this subsection applies shall be reduced by the amount of any net operating loss arising in such taxable year1 or net operating loss carryforward to such taxable year1 for which an advance refund is elected pursuant to this subsection4 7#d7 ,taxpayer to which subsection applies ,for purposes of paragraph 7#a71 this subsection applies to a taxpayer for a taxable year if-- 7,a7 the taxpayer is a ,c corporation-- 7i7 with respect to which 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 is not greater than #a1ejj1 and 7ii7 which 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 #bjbj1 and 7,b7 the taxpayer elects the application of this subsection for such taxable year4 7#e7 ,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 ,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#f7 ,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#g7 ,advance refund ,for rules for claiming the advance refund1 see section #fdbi4 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 which-- 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 ,december #ca1 #bjad4 7#b7 ,annual limitation ,the amount of the advance refund under paragraph 7#a7 for a taxable year shall not exceed the excess 7if any7 of #be1jjj1jjj reduced by the amount of the advance refund for such taxable year 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 ,advance refund 7#a7 ,in general ,in the case of a ,c corporation1 the advance refund sum for any taxable year may be claimed by the taxpayer as follows3 7,a7 ,payroll taxes ,first1 by reducing deposits or payments of applicable employment taxes4 7,b7 ,advance refundability ,second1 any remaining amount of the advance refund sum to be refunded to the taxpayer after the application of subparagraph 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 7#b7 ,applicable employment taxes ,for purposes of paragraph 7#a77;,a71 the term applicable employment taxes means the following3 7,a7 ,the taxes imposed under section #caaa7;b74 7,b7 ,so much of the taxes imposed under section #cbba7;a7 as are attributable to the rate in effect under section #caaa7;b74 7b7 ,advance refund sum ,for purposes of subsection 7a71 the term advance refund sum means1 with respect to any taxable year1 the sum of-- 7#a7 the amount of the taxpayer's advance refund under section #agb7;g7 for the taxable year1 and 7#b7 the amount of the advance refund for such taxable year under section #ci7;e7 of any unused business credit carryforward which 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 ,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 ,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 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjai4