Page:United States Statutes at Large Volume 119.djvu/1075

 PUBLIC LAW 109–58—AUG. 8, 2005

119 STAT. 1057

‘‘(iii) to which at least 5 unrelated persons paid or incurred during the calendar year in which the taxable year of the organization begins amounts (including as contributions) to such organization for energy research, and ‘‘(iv) to which no single person paid or incurred (including as contributions) during such calendar year an amount equal to more than 50 percent of the total amounts received by such organization during such calendar year for energy research. ‘‘(B) TREATMENT OF PERSONS.—All persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as related persons for purposes of subparagraph (A)(iii) and as a single person for purposes of subparagraph (A)(iv).’’. (3) CONFORMING AMENDMENT.—Section 41(b)(3)(C) is amended by inserting ‘‘(other than an energy research consortium)’’ after ‘‘organization’’. (b) REPEAL OF LIMITATION ON CONTRACT RESEARCH EXPENSES PAID TO SMALL BUSINESSES, UNIVERSITIES, AND FEDERAL LABORATORIES.—Section 41(b)(3) (relating to contract research expenses) is amended by adding at the end the following new subparagraph: ‘‘(D) AMOUNTS PAID TO ELIGIBLE SMALL BUSINESSES, UNIVERSITIES, AND FEDERAL LABORATORIES.— ‘‘(i) IN GENERAL.—In the case of amounts paid by the taxpayer to— ‘‘(I) an eligible small business, ‘‘(II) an institution of higher education (as defined in section 3304(f)), or ‘‘(III) an organization which is a Federal laboratory, for qualified research which is energy research, subparagraph (A) shall be applied by substituting ‘100 percent’ for ‘65 percent’. ‘‘(ii) ELIGIBLE SMALL BUSINESS.—For purposes of this subparagraph, the term ‘eligible small business’ means a small business with respect to which the taxpayer does not own (within the meaning of section 318) 50 percent or more of— ‘‘(I) in the case of a corporation, the outstanding stock of the corporation (either by vote or value), and ‘‘(II) in the case of a small business which is not a corporation, the capital and profits interests of the small business. ‘‘(iii) SMALL BUSINESS.—For purposes of this subparagraph— ‘‘(I) IN GENERAL.—The term ‘small business’ means, with respect to any calendar year, any person if the annual average number of employees employed by such person during either of the 2 preceding calendar years was 500 or fewer. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the person was in existence throughout the year.

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