[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9183 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 9183

      To amend the Internal Revenue Code of 1986 to add qualified 
    semiconductor design expenditures to the advanced manufacturing 
                           investment credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 30, 2024

 Mr. Moore of Utah (for himself, Ms. DelBene, Mr. McCaul, Ms. Matsui, 
  Mr. Moolenaar, Mr. Krishnamoorthi, Ms. Tenney, Mr. Khanna, and Mr. 
   Morelle) 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 add qualified 
    semiconductor design expenditures to the advanced manufacturing 
                           investment credit.

    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 ``Semiconductor Technology Advancement 
and Research Act of 2024'' or the ``STAR Act of 2024''.

SEC. 2. QUALIFIED SEMICONDUCTOR DESIGN EXPENDITURES ADDED TO ADVANCED 
              MANUFACTURING INVESTMENT CREDIT.

    (a) In General.--Section 48D of the Internal Revenue Code of 1986 
is amended--
            (1) in subsection (a), by striking ``an amount equal to'' 
        and all that follows through the period and inserting ``, with 
        respect to an eligible taxpayer, an amount equal to the sum 
        of--
            ``(1) 25 percent of the qualified investment for such 
        taxable year with respect to any advanced manufacturing 
        facility of such taxpayer, and
            ``(2) 25 percent of the qualified semiconductor design 
        expenditures paid or incurred by such taxpayer during the 
        taxable year.'',
            (2) by redesignating subsections (c), (d), and (e) as 
        subsections (e), (f), and (g), respectively,
            (3) by inserting after subsection (b) the following new 
        subsections:
    ``(c) Qualified Semiconductor Design Expenditures.--
            ``(1) In general.--For purposes of subsection (a)(2), the 
        term `qualified semiconductor design expenditures' means the 
        sum of the following amounts which are paid or incurred by the 
        taxpayer during the taxable year in carrying on any trade or 
        business of the taxpayer for--
                    ``(A) in-house semiconductor design expenses for 
                semiconductor design conducted in the United States, 
                and
                    ``(B) contract design expenses for semiconductor 
                design conducted in the United States.
            ``(2) In-house semiconductor design expenses.--
                    ``(A) In general.--The term `in-house semiconductor 
                design expenses' means--
                            ``(i) any wages paid or incurred to an 
                        employee for qualified services performed by 
                        such employee,
                            ``(ii) any amount paid or incurred for 
                        supplies used in the conduct of qualified 
                        semiconductor design, and
                            ``(iii) under regulations prescribed by the 
                        Secretary, any amount paid or incurred to 
                        another person for the right to use computers 
                        in the conduct of qualified semiconductor 
                        design.
                Clause (iii) shall not apply to any amount to the 
                extent that the taxpayer (or any person with whom the 
                taxpayer must aggregate expenditures under paragraph 
                (7) receives or accrues any amount from any other 
                person for the right to use substantially identical 
                personal property.
                    ``(B) Qualified services.--The term `qualified 
                services' means services consisting of--
                            ``(i) engaging in qualified semiconductor 
                        design, or
                            ``(ii) engaging in the direct supervision 
                        or direct support of design activities which 
                        constitute qualified semiconductor design.
                If substantially all of the services performed by an 
                individual for the taxpayer during the taxable year 
                consists of services meeting the requirements of clause 
                (i) or (ii), the term ``qualified services'' means all 
                of the services performed by such individual for the 
                taxpayer during the taxable year.
                    ``(C) Supplies.--The term `supplies' has the 
                meaning given such term in section 41(b)(2)(C).
                    ``(D) Wages.--The term `wages' has the meaning 
                given such term in section 41(b)(2)(D).
            ``(3) Contract design expenses.--
                    ``(A) In general.--The term `contract design 
                expenses' means 100 percent of any amount paid or 
                incurred by the taxpayer to any person (other than an 
                employee of the taxpayer) for qualified semiconductor 
                design.
                    ``(B) Prepaid amounts.--If any contract design 
                expenses paid or incurred during any taxable year are 
                attributable to qualified semiconductor research to be 
                conducted after the close of such taxable year, such 
                amount shall be treated as paid or incurred during the 
                period during which the qualified semiconductor design 
                is conducted.
            ``(4) Trade or business requirement disregarded for in-
        house design expenses of certain startup ventures.--In the case 
        of in-house semiconductor design expenses, a taxpayer shall be 
        treated as meeting the trade or business requirement of 
        paragraph (1) if, at the time such in-house semiconductor 
        design expenses are paid or incurred, the principal purpose of 
        the taxpayer in making such expenditures is to use the results 
        of the design in the active conduct of a future trade or 
        business--
                    ``(A) of the taxpayer, or
                    ``(B) of 1 or more persons who with the taxpayer 
                are treated as single taxpayer under paragraph (7).
            ``(5) Qualified semiconductor design.--
                    ``(A) In general.--The term `qualified 
                semiconductor design'--
                            ``(i) means the development (or direction 
                        of the development) of product design, design 
                        specifications, trade secrets, technology, or 
                        other intellectual property for the purpose of 
                        semiconductor manufacturing, substantially all 
                        of the activities of which constitute elements 
                        of a process of experimentation for a purpose 
                        described in subparagraph (B)(i), and
                            ``(ii) does not include any activity 
                        described in subparagraph (B)(ii).
                    ``(B) Purposes for which research may qualify for 
                credit.--For purposes of subparagraph (A)--
                            ``(i) In general.--Semiconductor design 
                        shall be treated as conducted for a purpose 
                        described in this paragraph if it relates to--
                                    ``(I) a new or improved function,
                                    ``(II) performance, or
                                    ``(III) reliability or quality.
                            ``(ii) Certain purposes not qualified.--
                        Semiconductor design shall in no event be 
                        treated as conducted for a purpose described in 
                        this paragraph if it is conducted for purposes 
                        of--
                                    ``(I) style, taste, cosmetic, or 
                                other design factors unrelated to a 
                                purpose described in clause (i),
                                    ``(II) design after the 
                                commencement of commercial production 
                                of the semiconductor, unless such 
                                design is related to firmware, 
                                software, or manufacturing process 
                                activities that would otherwise meet 
                                the requirements of clause (i),
                                    ``(III) duplication of an existing 
                                semiconductor product (in whole or in 
                                part) from a physical examination of 
                                the semiconductor itself or from plans, 
                                blueprints, detailed specifications, or 
                                publicly available information with 
                                respect to such semiconductor, or
                                    ``(IV) surveys or studies related 
                                to--
                                            ``(aa) efficiency,
                                            ``(bb) management function 
                                        or techniques,
                                            ``(cc) market research, 
                                        testing, or development, 
                                        including advertising and 
                                        promotions,
                                            ``(dd) routine data 
                                        collection, or
                                            ``(ee) routine or ordinary 
                                        testing or inspection for 
                                        quality control.
            ``(6) United states.--For purposes of this subsection, the 
        term `United States' includes the possessions of the United 
        States.
            ``(7) Aggregation of expenditures.--For purposes of this 
        subsection, in determining the amount of qualified 
        semiconductor design expenditures, rules similar to the rules 
        of section 41(f)(1) shall apply.
    ``(d) Coordination With Credit for Increasing Research 
Expenditures.--Any qualified semiconductor design expenditures for 
which a credit is allowed under this section shall not be taken into 
account for purposes of determining the credit allowable under section 
41 for such taxable year.'', and
            (4) in subsection (g) (as so redesignated), by inserting 
        ``or qualified semiconductor design expenditures paid or 
        incurred after December 31, 2026'' before the period.
    (b) Conforming Amendment.--Section 56A(c)(9) of the Internal 
Revenue Code of 1986 is amended by striking ``48D(d)'' and inserting 
``48D(f)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.
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