,i  #aai? ,,congress  #a/ ,session  ,h4 
,r4 #hjb  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,janu>y #bh1 #bjbe,mr4
 ,moore ( ,utah 7= himself1 ,ms4        
,del,bene1 ,mr4 ,mc,caul1 ,ms4 ,matsui1 
,mr4 ,mool5a>1 ,mr4 ,kri%namoor?i1 ,ms4 
,t5ney1 ,mr4 ,khanna1 ,mr4 ,morelle1    
,mr4 ,bu*anan1 ,mr4 ,c>son1 ,mr4        
,got!im]1 ,ms4 ,sewell1 & ,mr4 ,panetta7
 introduc$ ! foll[+ bill2 :i* 0 ref]r$  
to ! ,committee on ,ways & ,means  ,a   
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code ( #aihf to add qualifi$           
semiconductor design exp5ditures to !   
advanc$ manufactur+ inve/m5t cr$it4  #a4
 ,%ort title ,?is ,act may be cit$ z !  
,semiconductor ,te*nology ,advancem5t & 
,rese>* ,act ( #bjbe or ! ,,/> ,act (   
#bjbe4  #b4 ,qualifi$ semiconductor     
design exp5ditures add$ to advanc$      
manufactur+ inve/m5t cr$it  7a7 ,9 g5]al
 ,section #dh;,d ( ! ,int]nal ,rev5ue   
,code ( #aihf is am5d$-- 7#a7 9         
subsection 7a71 by /rik+ an am\nt equal 
to & all t foll[s ?r\gh ! p]iod & ins]t+

 1 ) respect to an eligible taxpay]1 an 
am\nt equal to ! sum (-- 7#a7 #be p]c5t 
( ! qualifi$ inve/m5t = su* taxable ye> 
) respect to any advanc$ manufactur+    
facility ( su* taxpay]1 &  7#b7 #be     
p]c5t ( ! qualifi$ semiconductor design 
exp5ditures paid or incurr$ by su*      
taxpay] dur+ ! taxable ye>4  1  7#b7 by 
r$esignat+ subsections 7c71 7d71 & 7e7 z
 subsections 7e71 7f71 & 7g71           
respectively1  7#c7 by ins]t+ aft]      
subsection 7b7 ! foll[+ new subsections3
  7c7 ,qualifi$ semiconductor design    
exp5ditures  7#a7 ,9 g5]al ,= purposes (
 subsection 7a77#b71 ! t]m qualifi$     
semiconductor design exp5ditures means !
 sum ( ! foll[+ am\nts :i* are paid or  
incurr$ by ! taxpay] dur+ ! taxable ye> 
9 c>ry+ on any trade or bus9ess ( !     
taxpay] =-- 7,a7 9-h\se semiconductor   
design exp5ses = semiconductor design   
conduct$ 9 ! ,unit$ ,/ates1 &  7,b7     
contract design exp5ses = semiconductor 
design conduct$ 9 ! ,unit$ ,/ates4  7#b7
 ,9-h\se semiconductor design exp5ses   

7,a7 ,9 g5]al ,! t]m 9-h\se             
semiconductor design exp5ses means-- 7i7
 any wages paid or incurr$ to an        
employee = qualifi$ s]vices p]=m$ by su*
 employee1  7ii7 any am\nt paid or      
incurr$ = supplies us$ 9 ! conduct (    
qualifi$ semiconductor design1 &  7iii7 
"u regulations prescrib$ by ! ,secret>y1
 any am\nt paid or incurr$ to ano!r     
p]son = ! "r to use comput]s 9 ! conduct
 ( qualifi$ semiconductor design4       
,clause 7iii7 %all n apply to any am\nt 
to ! ext5t t ! taxpay] 7or any p]son )  
:om ! taxpay] mu/ aggregate exp5ditures 
"u p>agraph 7#g7 receives or accrues any
 am\nt f any o!r p]son = ! "r to use    
sub/antially id5tical p]sonal prop]ty4  
7,b7 ,qualifi$ s]vices ,! t]m qualifi$  
s]vices means s]vices consi/+ (-- 7i7   
engag+ 9 qualifi$ semiconductor design1 
or  7ii7 engag+ 9 ! direct sup]vision or
 direct support ( design activities :i* 
con/itute qualifi$ semiconductor design4
  ,if sub/antially all ( ! s]vices p]=m$
 by an individual = ! taxpay] dur+ !    

taxable ye> consi/s ( s]vices meet+ !   
requirem5ts ( clause 7i7 or 7ii71 ! t]m 
8qualifi$ s]vices0 means all ( ! s]vices
 p]=m$ by su* individual = ! taxpay]    
dur+ ! taxable ye>4  7,c7 ,supplies ,!  
t]m supplies has ! mean+ giv5 su* t]m 9 
section #da7;b77#b77;,c74  7,d7 ,wages  
,! t]m wages has ! mean+ giv5 su* t]m 9 
section #da7;b77#b77;,d74  7#c7         
,contract design exp5ses  7,a7 ,9 g5]al 
,! t]m contract design exp5ses means    
#ajj p]c5t ( any am\nt paid or incurr$  
by ! taxpay] to any p]son 7o!r ?an an   
employee ( ! taxpay]7 = qualifi$        
semiconductor design4  7,b7 ,prepaid    
am\nts ,if any contract design exp5ses  
paid or incurr$ dur+ any taxable ye> are
 attributable to qualifi$ semiconductor 
rese>* to be conduct$ aft] ! close ( su*
 taxable ye>1 su* am\nt %all be treat$ z
 paid or incurr$ dur+ ! p]iod dur+ :i* !
 qualifi$ semiconductor design is       
conduct$4  7#d7 ,trade or bus9ess       
requirem5t disreg>d$ = 9-h\se design    
exp5ses ( c]ta9 />tup v5tures ,9 ! case 

( 9-h\se semiconductor design exp5ses1 a
 taxpay] %all be treat$ z meet+ ! trade 
or bus9ess requirem5t ( p>agraph 7#a7   
if1 at ! "t su* 9-h\se semiconductor    
design exp5ses are paid or incurr$1 !   
pr9cipal purpose ( ! taxpay] 9 mak+ su* 
exp5ditures is to use ! results ( !     
design 9 ! active conduct ( a future    
trade or bus9ess-- 7,a7 ( ! taxpay]1 or 
7,b7 ( #a or m p]sons :o ) ! taxpay] are
 treat$ z s+le taxpay] "u p>agraph 7#g74
  7#e7 ,qualifi$ semiconductor design   
7,a7 ,9 g5]al ,! t]m qualifi$           
semiconductor design-- 7i7 means !      
developm5t 7or direction ( ! developm5t7
 ( product design1 design               
specifications1 trade secrets1          
te*nology1 or o!r intellectual prop]ty =
 ! purpose ( semiconductor manufactur+1 
sub/antially all ( ! activities ( :i*   
con/itute elem5ts ( a process (         
exp]im5tation = a purpose describ$ 9    
subp>agraph 7,b77i71 &  7ii7 does n     
include any activity describ$ 9         
subp>agraph 7,b77ii74  7,b7 ,purposes = 

:i* rese>* may qualify = cr$it ,=       
purposes ( subp>agraph 7,a7-- 7i7 ,9    
g5]al ,semiconductor design %all be     
treat$ z conduct$ = a purpose describ$ 9
 ?is p>agraph if x relates to-- 7,i7 a  
new or improv$ function1  7,,ii7        
p]=mance1 or  7,,iii7 reliability or    
quality4  7ii7 ,c]ta9 purposes n        
qualifi$ ,semiconductor design %all 9 no
 ev5t be treat$ z conduct$ = a purpose  
describ$ 9 ?is p>agraph if x is conduct$
 = purposes (-- 7,i7 /yle1 ta/e1        
cosmetic1 or o!r design factors unrelat$
 to a purpose describ$ 9 clause 7i71    
7,,ii7 design aft] ! comm5cem5t (       
comm]cial production ( ! semiconductor1 
unless su* design is relat$ to firmw>e1 
s(tw>e1 or manufactur+ process          
activities t w\ld o!rwise meet !        
requirem5ts ( clause 7i71  7,,iii7      
duplication ( an exi/+ semiconductor    
product 79 :ole or 9 "p7 f a physical   
exam9ation ( ! semiconductor itself or f
 plans1 bluepr9ts1 detail$              
specifications1 or publicly available   

in=mation ) respect to su*              
semiconductor1 or  7,,iv7 surveys or    
/udies relat$ to-- 7aa7 effici5cy1  7bb7
 managem5t function or te*niques1  7cc7 
m>ket rese>*1 te/+1 or developm5t1      
includ+ adv]tis+ & promotions1  7dd7    
r\t9e data collection1 or  7ee7 r\t9e or
 ord9>y te/+ or inspection = quality    
control4  7#f7 ,unit$ ,/ates ,= purposes
 ( ?is subsection1 ! t]m ,unit$ ,/ates  
includes ! possessions ( ! ,unit$       
,/ates4  7#g7 ,aggregation ( exp5ditures
 ,= purposes ( ?is subsection1 9 det]m9+
 ! am\nt ( qualifi$ semiconductor design
 exp5ditures1 rules simil> to ! rules ( 
section #da7;f77#a7 %all apply4  7d7    
,coord9ation ) cr$it = increas+ rese>*  
exp5ditures ,any qualifi$ semiconductor 
design exp5ditures = :i* a cr$it is     
all[$ "u ?is section %all n be tak5 into
 acc\nt = purposes ( det]m9+ ! cr$it    
all[able "u section #da = su* taxable   
ye>4  1 &  7#d7 by am5d+ subsection 7g7 
7z s r$esignat$7 to read z foll[s31 by  
ins]t+ or qualifi$ semiconductor design 

exp5ditures paid or incurr$ aft]        
,decemb] #ca1 #bjbf be=e ! p]iod4  7g7  
,t]m9ation ( cr$it ,! cr$it all[$ "u ?is
 section %all n apply to-- 7#a7 prop]ty 
! con/ruction ( :i* beg9s aft] ,decemb] 
#ca1 #bjcf1 or  7#b7 qualifi$           
semiconductor design exp5ditures paid or
 incurr$ aft] ,decemb] #ca1 #bjcf4  4   
7b7 ,con=m+ am5dm5t ,section            
#ef;,a7c77#i7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ by /rik+ #dh;,d7d7 &  
ins]t+ #dh;,d7f74  7c7 ,effective date  
,! am5dm5ts made by ?is section %all    
apply to am\nts paid or incurr$ aft] !  
date ( ! enactm5t ( ?is ,act4