[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2821 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 2821

  To amend the Internal Revenue Code of 1986 to reform the credit for 
        increasing research activities, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 7, 2017

 Mr. Tiberi (for himself and Mr. Larson of Connecticut) 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 reform the credit for 
        increasing research activities, 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 ``Research and Experimentation 
Advances Competitiveness at Home Act'' or as the ``REACH Act''.

SEC. 2. INCREASE OF ALTERNATIVE SIMPLIFIED 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) Conforming Amendment.--Clause (ii) of section 41(c)(5)(B) of 
the Internal Revenue Code of 1986 is amended by striking ``6 percent'' 
and inserting ``10 percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 3. ALLOCATION OF RESEARCH EXPENSES AMONG BUSINESS COMPONENTS.

    (a) In General.--Subparagraph (A) of section 41(d)(2) of the 
Internal Revenue Code of 1986 is amended by inserting ``, and may be 
applied using a method that relies on reasonable estimation techniques 
in lieu of contemporaneous accounting to measure employee hours per 
business component'' before the period.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2016.

SEC. 4. INCLUSION OF QUALIFIED UPPER-LEVEL EMPLOYEES IN RESEARCH 
              EXPENSE CALCULATION.

    (a) In General.--Clause (ii) of section 41(b)(2)(B) of the Internal 
Revenue Code of 1986 is amended by inserting ``, without regard to the 
employee's position or management level'' before the period.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2016.

SEC. 5. REPEAL OF EXCLUSION OF ADAPTIVE RESEARCH.

    (a) In General.--Paragraph (4) of section 41(d) of the Internal 
Revenue Code of 1986 is amended by striking subparagraph (B) and by 
redesignating subparagraphs (C), (D), (E), (F), (G), and (H) as 
subparagraphs (B), (C), (D), (E), (F), and (G), respectively.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 6. INCLUSION OF COST REDUCTION RESEARCH.

    (a) In General.--Subparagraph (A) of section 41(d)(3) of the 
Internal Revenue Code of 1986 is amended--
            (1) by striking ``or'' at the end of clause (ii);
            (2) by striking the period at the end of clause (iii) and 
        inserting ``, or''; and
            (3) by adding at the end the following new clause:
                            ``(iv) reduction of costs associated with--
                                    ``(I) a business component of the 
                                taxpayer, or
                                    ``(II) research relating to a 
                                purpose described in clause (i), (ii), 
                                or (iii).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 7. INCLUSION OF OBSOLESCENCE MITIGATION.

    (a) In General.--Clause (iv) of section 41(d)(3)(A) of the Internal 
Revenue Code of 1986, as added by section 5, is amended by inserting 
``or obsolescence mitigation'' after ``reduction of costs''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2016.

SEC. 8. ELECTION OF REDUCED CREDIT MAY BE MADE ON AMENDED RETURN.

    (a) In General.--Subparagraph (C) of section 280C(c)(3) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(C) Election.--An election under this paragraph 
                shall made in such manner as the Secretary may 
                prescribe and, once made with respect to a taxable 
                year, shall be irrevocable. Such election may be made 
                on the return of tax for the taxable year to which it 
                applies or on an amended return.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amended returns which are permitted to be filed under the applicable 
provisions of the Internal Revenue Code of 1986 after the date of the 
enactment of this Act.
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