[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3307 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 3307

To amend the Internal Revenue Code of 1986 to make permanent the credit 
for increasing research activities, to increase such credit for amounts 
paid or incurred for qualified research occurring in the United States, 
 and to increase the domestic production activities deduction for the 
     manufacture of property substantially all of the research and 
   development of which occurred in the United States, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 18, 2012

Mr. Brown of Ohio (for himself and Mr. Casey) 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 make permanent the credit 
for increasing research activities, to increase such credit for amounts 
paid or incurred for qualified research occurring in the United States, 
 and to increase the domestic production activities deduction for the 
     manufacture of property substantially all of the research and 
   development of which occurred in the United States, and for other 
                               purposes.

    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 ``21st Century Investment Act of 
2012''.

SEC. 2. RESEARCH CREDIT MADE PERMANENT.

    (a) In General.--Section 41 of the Internal Revenue Code of 1986 is 
amended by striking subsection (h).
    (b) Conforming Amendment.--Paragraph (1) of section 45C(b) of such 
Code is amended by striking subparagraph (D).
    (c) Effective Date.--The amendments made by this subsection shall 
apply to amounts paid or incurred after December 31, 2011.

SEC. 3. INCREASE IN SIMPLIFIED RESEARCH CREDIT.

    (a) In General.--Subparagraph (A) of section 41(c)(5) of the 
Internal Revenue Code of 1986 is amended by striking ``14 percent (12 
percent in the case of taxable years ending before January 1, 2009)'' 
and inserting ``20 percent''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2011.

SEC. 4. INCREASE IN RESEARCH CREDIT FOR RESEARCH WITH UNITED STATES 
              BUSINESSES.

    (a) In General.--Section 41 of the Internal Revenue Code of 1986, 
as amended by section 2 of this Act, is amended by redesignating 
subsection (h) as subsection (i) and by inserting after subsection (g) 
the following new subsection:
    ``(h) Special Rule for Research With United States Manufacturing 
Business.--
            ``(1) In general.--If the taxpayer elects the application 
        of this subsection, subsection (a)(1) shall be applied by 
        substituting `25 percent' for `20 percent' with respect to 
        qualified United States research expenses.
            ``(2) Qualified united states research expenses.--For 
        purposes of this subsection, the term `qualified United States 
        research expenses' means qualified research expenses for 
        qualified research, substantially all of which occurs in the 
        United States.
            ``(3) Separate application of section.--In the case of any 
        election of the application of this subsection, this section 
        shall be applied separately with respect to qualified United 
        States research expenses.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred for taxable years beginning after the 
date of the enactment of this Act.

SEC. 5. INCREASE IN DOMESTIC PRODUCTION ACTIVITIES DEDUCTION FOR 
              MANUFACTURED PROPERTY RESEARCHED AND DEVELOPED IN UNITED 
              STATES.

    (a) In General.--Subsection (d) of section 199 of the Internal 
Revenue Code of 1986 is amended by redesignating paragraph (10) as 
paragraph (11) and by inserting after paragraph (9) the following new 
paragraph:
            ``(10) Special rule for certain manufacturing.--
                    ``(A) In general.--In the case qualified production 
                activities income attributable to the manufacture or 
                production of qualifying production property 
                substantially all of the research and development of 
                which occurred in the United States, subsection (a) 
                shall be applied by substituting `15 percent' for `9 
                percent'.
                    ``(B) Special rule when taxable income used to 
                determine deduction.--In the case of any taxable year 
                for which the taxpayer's qualified production 
                activities income exceeds the taxpayer's taxable income 
                (determined without regard to this section), the amount 
                of taxable income to which the 15 percent amount in 
                subparagraph (A) applies under subsection (a)(1) shall 
                be an amount equal to the amount which bears the same 
                ratio to such taxable income (as so determined) as--
                            ``(i) the amount of qualified production 
                        activities income of the taxpayer for the 
                        taxable year which is attributable to the 
                        manufacture or production of qualifying 
                        production property substantially all of the 
                        research and development with respect to which 
                        occurred in the United States, bears to
                            ``(ii) all qualified production activities 
                        income of the taxpayer for the taxable year.
                    ``(C) Termination.--This paragraph shall not apply 
                to taxable years beginning after December 31, 2020.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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