[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6165 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 6165

 To amend the Internal Revenue Code of 1986 to provide incentives for 
                        life sciences research.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 22, 2010

 Ms. Schwartz (for herself, Mr. Pascrell, Mr. Brady of Texas, and Mr. 
    Nunes) introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide incentives for 
                        life sciences research.

    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 ``Life Sciences Jobs and Investment 
Act of 2010''.

SEC. 2. INCREASED CREDIT FOR INITIAL LIFE SCIENCES RESEARCH.

    (a) In General.--Subsection (h) of section 41 of the Internal 
Revenue Code of 1986 is amended by redesignating subsection (h) as 
subsection (i) and inserting after subsection (g) the following new 
subsection:
    ``(h) Special Rules for Increased Initial Life Sciences Research.--
            ``(1) In general.--In the case of qualified initial life 
        sciences research expenses for any taxable year with respect to 
        which the taxpayer elects the application of this subsection--
                    ``(A) Increased credit.--Subsection (a) shall be 
                applied by substituting `40 percent' for `20 percent'.
                    ``(B) Amounts paid for qualified life sciences 
                research to certain research incubators, eligible small 
                businesses, universities, and federal laboratories.--
                Subsection (b)(3)(A) shall be applied by substituting 
                `100 percent' for `65 percent', in the case of amounts 
                paid or incurred to a qualified research incubator, or 
                to persons described in subclause (I), (II), or (III) 
                of subsection (b)(3)(D)(i), for qualified life sciences 
                research.
                    ``(C) Alternative simplified credit in case of 
                initial qualified life science research.--
                            ``(i) Subsection (c)(5)(A) shall be applied 
                        by substituting `28 percent' for `14 percent', 
                        and
                            ``(ii) subsection (c)(5)(B) shall be 
                        applied by substituting `12 percent' for `6 
                        percent'.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Qualified initial life sciences research 
                expenses.--The term `qualified initial life sciences 
                research expenses' means so much of the amounts taken 
                into account under subsection (a) as are attributable 
                to qualified life sciences research and do not exceed 
                $150,000,000.
                    ``(B) Qualified life sciences research.--The term 
                `qualified life sciences research' means any qualified 
                research with respect to the branch of knowledge or 
                study of biology, biochemistry, biophysics, 
                bioengineering, microbiology, genetics, or physiology 
                (in each case as such knowledge or study relates to 
                human beings), except that the term does not include 
                sociology or psychology.
                    ``(C) Qualified research incubator.--The term 
                `qualified research incubator' means any entity created 
                by and operated under State law exclusively to conduct 
                qualified life sciences research on behalf of the 
                taxpayer and 1 or more unrelated taxpayers.
            ``(3) Coordination with 965A.--This subsection shall not 
        apply with respect to any taxpayer for any taxable year for 
        which an election is in effect under section 965A (relating to 
        limited deduction for life sciences jobs and investment in 
        United States).
            ``(4) Election.--Any election under this subsection shall 
        be made in such manner as may be prescribed by the Secretary, 
        and shall be made with respect to a taxable year not later than 
        the due date (including extensions of time) for filing the 
        taxpayer's return for such taxable year.
            ``(5) Termination.--This subsection shall not apply to any 
        taxable year beginning after December 31, 2015.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. INCENTIVES TO INVEST IN LIFE SCIENCES JOBS, RESEARCH, AND 
              FACILITIES.

    (a) In General.--Subpart F of part III of subchapter N of chapter 1 
of the Internal Revenue Code of 1986 (relating to controlled foreign 
corporations) is amended by adding at the end the following new 
section:

``SEC. 965A. LIMITED DEDUCTION FOR LIFE SCIENCES JOBS AND INVESTMENT IN 
              UNITED STATES.

    ``(a) Deduction.--
            ``(1) In general.--In the case of a corporation which is a 
        United States shareholder and for which the election under this 
        section is in effect for the taxable year, there shall be 
        allowed as a deduction an amount equal to 100 percent of the 
        cash dividends which are received during such taxable year by 
        such shareholder from controlled foreign corporations.
            ``(2) Dividends paid indirectly from controlled foreign 
        corporations.--If, within the taxable year for which the 
        election under this section is in effect, a United States 
        shareholder receives a cash distribution from a controlled 
        foreign corporation which is excluded from gross income under 
        section 959(a), such distribution shall be treated for purposes 
        of this section as a cash dividend to the extent of any amount 
        included in income by such United States shareholder under 
        section 951(a)(1)(A), including as a result of any cash 
        dividend during such taxable year to--
                    ``(A) such controlled foreign corporation from 
                another controlled foreign corporation that is in a 
                chain of ownership described in section 958(a), or
                    ``(B) any other controlled foreign corporation in 
                such chain of ownership from another controlled foreign 
                corporation in such chain of ownership, but only to the 
                extent of cash distributions described in section 
                959(b) which are made during such taxable year to the 
                controlled foreign corporation from which such United 
                States shareholder received such distribution.
    ``(b) Limitations.--
            ``(1) In general.--The amount of dividends taken into 
        account under subsection (a) shall not exceed the lesser of--
                    ``(A) $150,000,000, or
                    ``(B) the amount shown on the applicable financial 
                statement as earnings permanently reinvested outside 
                the United States.
        The amounts described in subparagraph (B) shall be treated as 
        being zero if there is no such statement or such statement 
        fails to show a specific amount of such earnings.
            ``(2) Requirement to invest in life sciences.--Subsection 
        (a) shall not apply to any dividend received by a United States 
        shareholder unless the amount of the dividend is invested 
        solely in the United States and solely for the purpose of--
                    ``(A) the new hiring of additional scientists, 
                researchers, and comparable personnel engaged in 
                qualified life sciences research,
                    ``(B) payments to universities, qualified research 
                incubators, and other qualified organizations which are 
                used by such organizations to conduct qualified life 
                sciences research, or
                    ``(C) the building or leasing of new facilities to 
                be used in the conduct of qualified life sciences 
                research.
            ``(3) Prohibited uses.--Subsection (a) shall not apply to 
        any dividend any amount of which is used by the taxpayer to pay 
        remuneration for services of any covered employee (as defined 
        in section 162(m)(3)), to pay dividends to the shareholders of 
        the taxpayer, or to pay interest or principal on any debt 
        security of the taxpayer.
            ``(4) No reserve.--Subsection (a) shall not apply to any 
        dividend if the taxpayer's compliance with this section is 
        uncertain and requires a provision or reserve on the taxpayer's 
        applicable financial statements.
            ``(5) Separate account.--Subsection (a) shall not apply to 
        any dividend unless the amount of the dividend is held in a 
        separate account, trust, or other arrangement that segregates 
        the amount from other funds of the taxpayer until the amount is 
        used solely for the purposes described in paragraph (2).
    ``(c) Substantiation of Compliance.--
            ``(1) In general.--The taxpayer must substantiate its 
        compliance with subsection (b) with written documents and such 
        other credible evidence as the Secretary may reasonably 
        require, and shall bear the burden of proof with respect to 
        such substantiation.
            ``(2) Certification.--The chief executive officer and the 
        independent director serving as head of the audit committee of 
        the taxpayer, or comparable corporate officials, shall attest 
        in writing to the taxpayer's compliance with each of the 
        requirements of subsection (b).
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified life sciences research; qualified research 
        incubator.--The terms `qualified life sciences research' and 
        `qualified research incubator' shall have the respective 
        meanings given such terms by section 41(d).
            ``(2) The term `qualified organization' means any 
        organization described in subparagraph (A), (B), or (C) of 
        section 41(e)(6).
            ``(3) The term `applicable financial statement' and 
        `dividend' shall have the respective meanings given such terms 
        by section 965(c).
            ``(4) Rules similar to the rules of paragraph (3) of 
        section 965(b) shall apply for purposes of this section, except 
        that such paragraph shall be applied by substituting `December 
        31, 2009' for `October 3, 2004'.
            ``(5) Rules similar to the rules of paragraphs (4) and (5) 
        of section 965(c) shall apply for purposes of this section, 
        except that such paragraph (5) shall be applied--
                    ``(A) by substituting `$150,000,000' for 
                `$500,000,000', and
                    ``(B) without regard to the reference to 
                subparagraph (C) of section 965(b)(1).
    ``(e) Denial of Foreign Tax Credit.--
            ``(1) No credit shall be allowed under section 901 for any 
        taxes paid or accrued (or treated as paid or accrued) with 
        respect to any dividend with respect to which an election is in 
        effect under this section and which is included in income under 
        section 951(a)(1)(A).
            ``(2) No deduction shall be allowed under this chapter for 
        any tax for which credit is not allowable by reason of 
        paragraph (1).
    ``(f) Election.--Any election under this section shall be made in 
such manner as may be prescribed by the Secretary, and shall be made 
with respect to a taxable year not later than the due date (including 
extensions of time) for filing the taxpayer's return for such taxable 
year.
    ``(g) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 2015.''.
    (b) Clerical Amendment.--The table of sections for subpart F of 
part III of subchapter N of chapter 1 of such Code is amended by adding 
at the end the following new section:

``Sec. 965A. Limited deduction for life sciences jobs and investment in 
                            United States.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of enactment.
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