[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1425 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1425

  To amend the Internal Revenue Code of 1986 to provide a 10 percent 
biotechnology investment tax credit and to reauthorize the Research and 
                 Development tax credit for ten years.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 22, 1999

  Mr. Specter introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide a 10 percent 
biotechnology investment tax credit and to reauthorize the Research and 
                 Development tax credit for ten years.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Biotechnology Tax Credit Act of 
1999''.

SEC. 2. TEN YEAR EXTENSION OF THE RESEARCH AND DEVELOPMENT TAX CREDIT.

    (a) In General.--Section 41 of the Internal Revenue Code of 1986 
(relating to credit for increasing research activities) is amended by 
striking subsection (h) and in its place, insert the following new 
section:
    ``(h) In General.--This section shall not apply to any amount paid 
or incurred after June 30, 2009.''
    (b) Conforming Amendment.--Paragraph (1) of section 45C(b) of such 
Code is amended by striking subparagraph (D).

SEC. 3. BIOTECHNOLOGY INVESTMENT TAX CREDIT.

    (a) Allowance of Credit.--Section 46(a) of the Internal Revenue 
Code of 1986 (relating to amount of investment credit) is amended by 
striking ``and'' at the end of paragraph (2), by striking the period at 
the end of paragraph (3) and inserting ``, and'', and by adding at the 
end thereof the following new paragraph:
            ``(4) the biotechnology investment credit.''
    (b) Amount of Credit.--Section 48 of such Code is amended by adding 
at the end thereof the following new subsection:
    ``(c) Biotechnology Investment Credit.--
            ``(1) In general.--For purposes of section 46, the 
        biotechnology investment credit for any taxable year is an 
        amount equal to 10 percent of the qualified investment for such 
        taxable year.
            ``(2) Qualified investment.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the qualified investment for any taxable year is the 
                aggregate of--
                            ``(i) the applicable percentage of the 
                        basis of each new biotechnology property placed 
                        in service by the taxpayer during such taxable 
                        year; plus
                            ``(ii) the applicable percentage of the 
                        cost of each used biotechnology property placed 
                        in service by the taxpayer during such taxable 
                        year.
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage for any 
property shall be determined under paragraphs (2) and (7) of section 
46(c) (as in effect on the day before the date of the enactment of the 
Revenue Reconciliation Act of 1990).
                    ``(C) Certain rules made applicable.--The 
                provisions of subsections (b) and (c) of section 48 (as 
                in effect on the day before the date of the enactment 
                of the Revenue Reconciliation Act of 1990) shall apply 
                for purposes of this paragraph.
            ``(3) Definitions.--For purposes of this section:
                    ``(A) `Biotechnology Property' means capital 
                equipment, instruments and supplies used in a 
                laboratory setting by a biotechnology company. These 
                items would include but would not be limited to 
                microscopes, various laboratory machines, glassware, 
                chemical reagents, and technical books and manuals 
                purchased by a manufacturer for research purposes. Also 
                included are computers and software used primarily to 
                develop data for research and development.
                    ``(B) `Biotechnology Company' is an organization 
                that deals with the application of technologies, such 
                as recombinant DNA techniques, biochemistry, molecular 
                and cellular biology, genetics and genetic engineering, 
                biological cell fusion techniques, and new 
                bioprocesses, using living organisms, or parts of 
                organisms, to produce or modify products, to develop 
                microorganisms for specific uses, to identify targets 
                for small molecule pharmaceutical development, to 
                transform biological systems into useful processes and 
                products or to develop microorganisms for specific 
                uses. Potential endpoints for these products, 
                developments and uses shall be for societal benefit 
                through improving human healthcare.
            ``(4) Coordination with other credits.--This subsection 
        shall not apply to any property to which the energy credit or 
        rehabilitation credit would apply unless the taxpayer elects to 
        waive the application of such credits to such property.
            ``(5) Certain progress expenditure rules made applicable.--
        Rules similar to rules of subsection (c)(4) and (d) of section 
        46 (as in effect on the day before the date of the enactment of 
        the Revenue Reconciliation Act of 1990) shall apply for 
        purposes of this subsection.''
    (c) Technical Amendments.--
            (1) Subparagraph (C) of section 49(a)(1) of such Code is 
        amended by striking ``and'' at the end of clause (ii), by 
        striking the period at the end of clause (iii) and inserting 
        ``, and'', and by adding at the end thereof the following new 
        clause:
                            ``(iv) the basis of any new biotechnology 
                        property and the cost of any used biotechnology 
                        property.''
            (2) Subparagraph (E) of section 50(a)(2) of such Code is 
        amended by striking ``section 48(a)(5)(A)'' and inserting 
        ``section 48(a)(5) or 48(c)(5)''.
            (3) Paragraph (5) of section 50(a) of such Code is amended 
        by adding at the end thereof the following new subparagraph:
                    ``(D) Special rules for certain property.--In the 
                case of any biotechnology property which is 3-year 
                property (within the meaning of section 168(e))--
                            ``(i) the percentage set forth in clause 
                        (ii) of the table contained in paragraph (1)(B) 
                        shall be 66 percent;
                            ``(ii) the percentage set forth in clause 
                        (iii) of such table shall be 33 percent; and
                            ``(iii) clauses (iv) and (v) of such table 
                        shall not apply.''
            (4)(A) The section heading for section 48 of such Code is 
        amended to read as follows:

``SEC. 48. OTHER CREDITS.''

            (B) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 48 and inserting the following:

``Sec. 48. Other Credits.''

SEC. 4. EFFECTIVE DATE.

    The amendments made by this bill shall apply to amounts paid or 
incurred after June 30, 1999.
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