,i #aaith ,,congress #ast ,session ,h4 ,r4 #hjb ,,in ,,the ,,house ,,of ,,representatives ,january #bh1 #bjbe,mr4 ,moore of ,utah 7for himself1 ,ms4 ,del,bene1 ,mr4 ,mc,caul1 ,ms4 ,matsui1 ,mr4 ,moolenaar1 ,mr4 ,krishnamoorthi1 ,ms4 ,tenney1 ,mr4 ,khanna1 ,mr4 ,morelle1 ,mr4 ,buchanan1 ,mr4 ,carson1 ,mr4 ,gottheimer1 ,ms4 ,sewell1 and ,mr4 ,panetta7 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 add qualified semiconductor design expenditures to the advanced manufacturing investment credit4 #a4 ,short title ,this ,act may be cited as the ,semiconductor ,technology ,advancement and ,research ,act of #bjbe or the ,,star ,act of #bjbe4 #b4 ,qualified semiconductor design expenditures added to advanced manufacturing investment credit 7a7 ,in general ,section #dh;,d of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 in subsection 7a71 by striking an amount equal to and all that follows through the period and inserting 1 with respect to an eligible taxpayer1 an amount equal to the sum of-- 7#a7 #be percent of the qualified investment for such taxable year with respect to any advanced manufacturing facility of such taxpayer1 and 7#b7 #be percent of the qualified semiconductor design expenditures paid or incurred by such taxpayer during the taxable year4 1 7#b7 by redesignating subsections 7c71 7d71 and 7e7 as subsections 7e71 7f71 and 7g71 respectively1 7#c7 by inserting after subsection 7b7 the following new subsections3 7c7 ,qualified semiconductor design expenditures 7#a7 ,in general ,for purposes of subsection 7a77#b71 the term qualified semiconductor design expenditures means the sum of the following amounts which are paid or incurred by the taxpayer during the taxable year in carrying on any trade or business of the taxpayer for-- 7,a7 in-house semiconductor design expenses for semiconductor design conducted in the ,united ,states1 and 7,b7 contract design expenses for semiconductor design conducted in the ,united ,states4 7#b7 ,in-house semiconductor design expenses 7,a7 ,in general ,the term in-house semiconductor design expenses means-- 7i7 any wages paid or incurred to an employee for qualified services performed by such employee1 7ii7 any amount paid or incurred for supplies used in the conduct of qualified semiconductor design1 and 7iii7 under regulations prescribed by the ,secretary1 any amount paid or incurred to another person for the right to use computers in the conduct of qualified semiconductor design4 ,clause 7iii7 shall not apply to any amount to the extent that the taxpayer 7or any person with whom the taxpayer must aggregate expenditures under paragraph 7#g7 receives or accrues any amount from any other person for the right to use substantially identical personal property4 7,b7 ,qualified services ,the term qualified services means services consisting of-- 7i7 engaging in qualified semiconductor design1 or 7ii7 engaging in the direct supervision or direct support of design activities which constitute qualified semiconductor design4 ,if substantially all of the services performed by an individual for the taxpayer during the taxable year consists of services meeting the requirements of clause 7i7 or 7ii71 the term 8qualified services0 means all of the services performed by such individual for the taxpayer during the taxable year4 7,c7 ,supplies ,the term supplies has the meaning given such term in section #da7;b77#b77;,c74 7,d7 ,wages ,the term wages has the meaning given such term in section #da7;b77#b77;,d74 7#c7 ,contract design expenses 7,a7 ,in general ,the term contract design expenses means #ajj percent of any amount paid or incurred by the taxpayer to any person 7other than an employee of the taxpayer7 for qualified semiconductor design4 7,b7 ,prepaid amounts ,if any contract design expenses paid or incurred during any taxable year are attributable to qualified semiconductor research to be conducted after the close of such taxable year1 such amount shall be treated as paid or incurred during the period during which the qualified semiconductor design is conducted4 7#d7 ,trade or business requirement disregarded for in-house design expenses of certain startup ventures ,in the case of in-house semiconductor design expenses1 a taxpayer shall be treated as meeting the trade or business requirement of paragraph 7#a7 if1 at the time such in-house semiconductor design expenses are paid or incurred1 the principal purpose of the taxpayer in making such expenditures is to use the results of the design in the active conduct of a future trade or business-- 7,a7 of the taxpayer1 or 7,b7 of #a or more persons who with the taxpayer are treated as single taxpayer under paragraph 7#g74 7#e7 ,qualified semiconductor design 7,a7 ,in general ,the term qualified semiconductor design-- 7i7 means the development 7or direction of the development7 of product design1 design specifications1 trade secrets1 technology1 or other intellectual property for the purpose of semiconductor manufacturing1 substantially all of the activities of which constitute elements of a process of experimentation for a purpose described in subparagraph 7,b77i71 and 7ii7 does not include any activity described in subparagraph 7,b77ii74 7,b7 ,purposes for which research may qualify for credit ,for purposes of subparagraph 7,a7-- 7i7 ,in general ,semiconductor design shall be treated as conducted for a purpose described in this paragraph if it relates to-- 7,i7 a new or improved function1 7,,ii7 performance1 or 7,,iii7 reliability or quality4 7ii7 ,certain purposes not qualified ,semiconductor design shall in no event be treated as conducted for a purpose described in this paragraph if it is conducted for purposes of-- 7,i7 style1 taste1 cosmetic1 or other design factors unrelated to a purpose described in clause 7i71 7,,ii7 design after the commencement of commercial production of the semiconductor1 unless such design is related to firmware1 software1 or manufacturing process activities that would otherwise meet the requirements of clause 7i71 7,,iii7 duplication of an existing semiconductor product 7in whole or in part7 from a physical examination of the semiconductor itself or from plans1 blueprints1 detailed specifications1 or publicly available information with respect to such semiconductor1 or 7,,iv7 surveys or studies related to-- 7aa7 efficiency1 7bb7 management function or techniques1 7cc7 market research1 testing1 or development1 including advertising and promotions1 7dd7 routine data collection1 or 7ee7 routine or ordinary testing or inspection for quality control4 7#f7 ,united ,states ,for purposes of this subsection1 the term ,united ,states includes the possessions of the ,united ,states4 7#g7 ,aggregation of expenditures ,for purposes of this subsection1 in determining the amount of qualified semiconductor design expenditures1 rules similar to the rules of section #da7;f77#a7 shall apply4 7d7 ,coordination with credit for increasing research expenditures ,any qualified semiconductor design expenditures for which a credit is allowed under this section shall not be taken into account for purposes of determining the credit allowable under section #da for such taxable year4 1 and 7#d7 by amending subsection 7g7 7as so redesignated7 to read as follows31 by inserting or qualified semiconductor design expenditures paid or incurred after ,december #ca1 #bjbf before the period4 7g7 ,termination of credit ,the credit allowed under this section shall not apply to-- 7#a7 property the construction of which begins after ,december #ca1 #bjcf1 or 7#b7 qualified semiconductor design expenditures paid or incurred after ,december #ca1 #bjcf4 4 7b7 ,conforming amendment ,section #ef;,a7c77#i7 of the ,internal ,revenue ,code of #aihf is amended by striking #dh;,d7d7 and inserting #dh;,d7f74 7c7 ,effective date ,the amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this ,act4