article: SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE. (a) Short Title.--This Act may be cited as the ``Grow Research Opportunities With Taxcredits' Help Act'' or ``GROWTH Act''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. SEC. 2. EXTENSION OF RESEARCH CREDIT; INCREASE IN ALTERNATIVE SIMPLIFIED RESEARCH CREDIT. (a) Extension of Credit.-- (1) In general.--Subparagraph (B) of section 41(h)(1) is amended by striking ``December 31, 2009'' and inserting ``December 31, 2010''. (2) Conforming amendment.--Subparagraph (D) of section 45C(b)(1) is amended by striking ``December 31, 2009'' and inserting ``December 31, 2010''. (3) Effective date.--The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2009. (b) Alternative Simplified Research Credit Increased.-- (1) Increased credit.--Paragraph (5) of section 41(c) (relating to election of alternative simplified credit) is amended-- (A) by striking ``14 percent (12 percent in the case of taxable years ending before January 1, 2009)'' in subparagraph (A) and inserting ``20 percent'', and (B) by striking ``6 percent'' in subparagraph (B)(ii) and inserting ``10 percent''. (2) Effective date.--The amendment made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. SEC. 3. MODIFICATION OF RESEARCH CREDIT AFTER 2010. (a) Simplified Credit for Qualified Research Expenses.--Subsection (a) of section 41 is amended to read as follows: ``(a) General Rule.-- ``(1) Credit determined.--For purposes of section 38, the research credit determined under this section for the taxable year shall be an amount equal to 20 percent of so much of the qualified research expenses for the taxable year as exceeds 50 percent of the average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. ``(2) Special rule in case of no qualified research expenses in any of 3 preceding taxable years.-- ``(A) Taxpayers to which paragraph applies.--The credit under this section shall be determined under this paragraph if the taxpayer has no qualified research expenses in any one of the 3 taxable years preceding the taxable year for which the credit is being determined. ``(B) Credit rate.--The credit determined under this paragraph shall be equal to 10 percent of the qualified research expenses for the taxable year.''. (b) Conforming Amendments.-- (1) Termination of base amount calculation.--Section 41 is amended by striking subsection (c) and redesignating subsection (d) as subsection (c). (2) Termination of basic research payment calculation.-- Section 41 is amended by striking subsection (e) and redesignating subsections (f) and (g) as subsections (d) and (e), respectively. (3) Special rules.-- (A) Paragraph (1)(A)(ii) of subsection (d) of section 41, as so redesignated, is amended by striking ``shares of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums,'' and inserting ``share of the qualified research expenses''. (B) Paragraph (1)(B)(ii) of section 41(d), as so redesignated, is amended by striking ``shares of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums,'' and inserting ``share of the qualified research expenses''. (C) Paragraph (3) of section 41(d), as so redesignated, is amended-- (i) by striking ``, and the gross receipts of the taxpayer'' and all that follows in subparagraph (A) and inserting a period, (ii) by striking ``, and the gross receipts of the taxpayer'' and all that follows in subparagraph (B) and inserting a period, and (iii) by striking subparagraph (C). (D) Paragraph (4) of section 41(d), as so redesignated, is amended by striking ``and gross receipts''. (E) Subsection (d) of section 41, as so redesignated, is amended by striking paragraph (6). (4) Permanent extension.-- (A) Section 41 is amended by striking subsection (h). (B) Paragraph (1) of section 45C(b) is amended by striking subparagraph (D). (5) Cross-references.-- (A) Paragraphs (2)(A) and (4) of section 41(b) are each amended by striking ``subsection (f)(1)'' and inserting ``subsection (d)(1)''. (B) Paragraph (2) of section 45C(c) is amended by striking ``base period research expenses'' and inserting ``average qualified research expenses''. (C) Paragraph (3) of section 45C(d) is amended by striking ``section 41(f)'' and inserting ``section 41(d)''. (D) Paragraph (2) of section 45G(e) is amended by striking ``section 41(f)'' and inserting ``section 41(d)''. (E) Subsection (g) of section 45O is amended by striking ``section 41(f)'' and inserting ``section 41(d)''. (F) Subparagraph (A) of section 54(l)(3) is amended by striking ``section 41(g)'' and inserting ``section 41(e)''. (G) Clause (i) of section 170(e)(4)(B) is amended to read as follows: ``(i) the contribution is to a qualified organization,''. (H) Paragraph (4) of section 170(e) is amended by adding at the end the following new subparagraph: ``(E) Qualified organization.--For purposes of this paragraph, the term `qualified organization' means-- ``(i) any educational organization which-- ``(I) is an institution of higher education (within the meaning of section 3304(f)), and ``(II) is described in subsection (b)(1)(A)(ii), or ``(ii) any organization not described in clause (i) which-- ``(I) is described in section 501(c)(3) and is exempt from tax under section 501(a), ``(II) is organized and operated primarily to conduct scientific research, and ``(III) is not a private foundation.''. (I) Subsection (f) of section 197 is amended by striking ``section 41(f)(1)'' each place it appears in paragraphs (1)(C) and (9)(C)(i) and inserting ``section 41(d)(1)''. (J) Section 280C is amended-- (i) by striking ``41(f)'' each place it appears in subsection (b)(3) and inserting ``41(d)'', (ii) by striking ``or basic research expenses (as defined in section 41(e)(2))'' in subsection (c)(1), (iii) by striking ``section 41(a)(1)'' in subsection (c)(2)(A) and inserting ``section 41(a)'', and (iv) by striking ``or basic research expenses'' in subsection (c)(2)(B). (K) Subclause (IV)(c) of section 936(h)(5)(C)(i) is amended by striking ``section 41(f)'' and inserting ``section 41(d)''. (L) Subparagraph (D) of section 936(j)(5) is amended by striking ``section 41(f)(3)'' and inserting ``section 41(d)(3)''. (M) Clause (i) of section 965(c)(2)(C) is amended by striking ``section 41(f)(3)'' and inserting ``section 41(d)(3)''. (N) Clause (i) of section 1400N(l)(7)(B) is amended by striking ``section 41(g)'' and inserting ``section 41(e)''. (c) Technical Corrections.--Section 409 is amended-- (1) by inserting ``, as in effect before the enactment of the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)'' in subsection (b)(1)(A), (2) by inserting ``, as in effect before the enactment of the Tax Reform Act of 1984'' after ``relating to the employee stock ownership credit'' in subsection (b)(4), (3) by inserting ``(as in effect before the enactment of the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)'' in subsection (i)(1)(A), (4) by inserting ``(as in effect before the enactment of the Tax Reform Act of 1984)'' after ``section 41(c)(1)(B)'' in subsection (m), (5) by inserting ``(as so in effect)'' after ``section 48(n)(1)'' in subsection (m), (6) by inserting ``(as in effect before the enactment of the Tax Reform Act of 1984)'' after ``section 48(n)'' in subsection (q)(1), and (7) by inserting ``(as in effect before the enactment of the Tax Reform Act of 1984)'' after ``section 41'' in subsection (q)(3). (d) Effective Date.-- (1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2010. (2) Technical corrections.--The amendments made by subsection (c) shall take effect on the date of the enactment of this Act.
summary: Grow Research Opportunities With Taxcredits' Help Act or GROWTH Act - Amends the Internal Revenue Code to: (1) extend the tax credit for increasing research activities through 2010; (2) modify the rate of such credit and make such modified credit permanent after 2010; and (3) increase to 20% the rate of the alternative simplified research tax credit after 2010.