BILL NUMBER: AB 1564	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member V. Manuel Pérez

                        JANUARY 29, 2014

   An act to add Article 4.5 (commencing with Section 12097) to
Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government
Code, and to amend Sections 17052.12 and 23609 of, and to add Section
19535 to, the Revenue and Taxation Code, relating to taxation, and
making an appropriation therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1564, as introduced, V. Manuel Pérez. Income taxes: research
and development credit: credit sale and purchase.
   The Personal Income Tax Law and the Corporation Tax Law allow
various credits against the taxes imposed by those laws, including a
credit for a percentage of specified research expenses.
   This bill would increase that percentage by 3% each taxable year
for 5 taxable years and then return to the current rate. This bill
would limit the credit to a 10-year carryover period. This bill would
create a Research and Development Tax Credit Trade Program, which
the Governor's Office of Business and Economic Development (GO-Biz)
would administer to authorize taxpayers to purchases and sell the
credits. This bill would appropriate a portion of the money made from
the sale of the credits to GO-Biz and the Franchise Tax Board for
the costs incurred by the agencies in administering the program. This
bill would impose specified auditing requirements on the Franchise
Tax Board related to this credit, as specified.
   This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
   Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares the following:
   (a) California's greatest economic asset is its diverse economy
that supports key industry clusters that rely upon innovation to
compete globally.
   (b) California is uniquely situated to benefit from increasing
research and development tax credits because of California's world
renowned academic institutions, industry clusters, and diverse
population that attracts worldwide talent.
   (c) Recent studies conducted by the Public Policy Institute of
California ranked California fourth in the nation in entrepreneurial
energy and second in the nation in innovation capacity. However,
California was ranked as having only the 43rd most favorable
corporate tax structure. This low raking artificially reduces the
capacity of research and development that could occur in the state
because companies are more likely to expand to other states or
counties where they will be taxed at a lower level.
   (d) Creating an environment rich in research and development
spawns the growth of manufacturing. In the last 10 years, California
has declined from the sixth largest economy in the world to the
ninth, which is behind Brazil. During that time, manufacturing
declined in California from 1.865 million jobs to 1.257 million jobs.

   (e) California needs to invest in the innovation economy by
eliminating the roadblocks in state law and regulations and by
developing a tax system that rewards capital expenditures in order to
ensure that the private sector will invest financial capital and
intellectual capital in California.
   (f) California needs to support the creation of new manufacturing
jobs created by the private sector in the innovation economy with a
highly skilled workforce.
  SEC. 2.  It is the intent of the Legislature to do the following:
   (a) Incrementally increase the research and development tax
credits under the Personal Income Tax Law and the Corporation Tax Law
up to 15 percent for a five-year period.
   (b) Reduce California's research and development tax credits by
creating a 10-year carryover maximum, focusing the credits on startup
businesses.
   (c) Create new and clearly defined auditing procedures for the
Franchise Tax Board relating to this credit to allow taxpayers
claiming a research and development tax credit to defend their
research and development activities.
  SEC. 3.  Article 4.5 (commencing with Section 12097) is added to
Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government
Code, to read:

      Article 4.5.  The Research and Development Tax Credit Trade
Program


   12097.  The Governor's Office of Business and Economic Development
(GO-Biz) shall develop and administer a program to allow the sale or
purchase of research and development tax credits allowed under
Sections 17052.12 and 23609 of the Revenue and Taxation Code. GO-Biz
shall create an Internet Web site through which approved taxpayers
may, by January 1, 2017, make such sale or purchase.
   (a) The Franchise Tax Board shall notify GO-Biz quarterly of all
taxpayers that claim a credit under Sections 17052.12 and 23609 of
the Revenue and Taxation Code, and the amount of credit claimed.
   (b) A taxpayer may request approval by GO-Biz to sell or purchase
a credit.
   (c) GO-Biz shall approve a taxpayer before that taxpayer may sell
or purchase the credits.
   (1) GO-Biz shall approve a taxpayer to sell its credits if that
taxpayer has all of the following:
   (A) A facility in which research and development occurs in the
state.
   (B) Less than fifty million dollars ($50,000,000) in earnings
before income tax, depreciation, and amortization.
   (C) Unused research and development tax credits from a previous
taxable year.
   (2) GO-Biz shall approve a taxpayer to purchase a research and
development tax credit if all of the following requirements are met:
   (A) The taxpayer has had qualified research expenses, as defined
in Sections 17052.12 and 23609 of the Revenue and Taxation Code and
Section 41 of the Internal Revenue Code, within the past five years.
   (B) The taxpayer conducts a trade or business in the state.
   (d) If a taxpayer is approved, GO-Biz shall create an online
account for the taxpayer to allow the taxpayer to log into the
Internet Web site to sell or purchase the credits.
   (e) A taxpayer shall not be approved to sell or purchase more than
five million dollars ($5,000,000) in unused research and development
tax credits per taxable year.
   (f) If the taxpayer does not reinvest the money received from the
sale of the credit into the taxpayer's trade or business or if the
purchased credits reduce the taxpayer's tax liability by more than 50
percent, any remaining unapplied credit shall be canceled and any
previously applied credit that was not reinvested or that exceeds 50
percent of the taxpayer's tax liability shall be recaptured, and the
taxpayer shall be liable for any increase in tax attributable to the
recapture of any credit previously allowed under this section.
   (g) The price of the credit shall be based on the open-market
demand.
   (h) GO-Biz shall notify the Franchise Tax Board of each sale or
purchase of a credit, the identity of the taxpayer selling the
credit, the identity of the taxpayer that purchased the credit, and
the amount of the credit sold quarterly. The Franchise Tax Board
shall review this information to ensure that a credit is not being
used multiple times.
   12097.1.  (a) There is hereby established in the State Treasury
the Research and Development Tax Credit Trade Fund.
   (b) (1) Until GO-Biz has been fully reimbursed for its costs of
developing, creating, and starting the Research and Development Tax
Credit Trade Program, 15 percent of each credit sold or purchased on
the Internet Web site established by GO-Biz shall be deposited into
the Research and Development Tax Credit Trade Fund for the purpose of
funding this program pursuant to Section 12097, and appropriated as
follows:
   (A) Thirteen percent of each credit to GO-Biz for the
administrative and start-up costs of implementing this program.
   (B) Two percent of each credit to the Franchise Tax Board for the
administrative costs of implementing this program.
   (2) The remaining 85 percent of each credit may be used as a
credit against the "net tax" or "tax," as applicable of the taxpayer
that purchased the credit.
   (c) (1) Once GO-Biz has been fully reimbursed for its costs of
developing, creating, and starting this program, 5 percent of each
credit sold through the Internet Web site established by GO-Biz shall
be deposited into the Research and Development Tax Credit Trade Fund
for the purpose of funding the Research and Development Tax Credit
Trade Program pursuant to Section 12097, and appropriated as follows:

   (A) Three percent of each credit to GO-Biz for the administrative
costs of implementing this program.
   (B) Two percent of each credit to the Franchise Tax Board for the
administrative costs of implementing this program.
   (2) The remaining 95 percent of each credit may be used as a
credit against the "net tax" or "tax," as applicable of the taxpayer
that purchased the credit.
  SEC. 4.  Section 17052.12 of the Revenue and Taxation Code is
amended to read:
   17052.12.  For each taxable year beginning on or after January 1,
1987, there shall be allowed as a credit against the "net tax" (as
defined by Section 17039) for the taxable year an amount determined
in accordance with Section 41 of the Internal Revenue Code, except as
follows:
   (a) For each taxable year beginning before January 1, 1997, the
reference to "20 percent" in Section 41(a)(1) of the Internal Revenue
Code is modified to read "8 percent."
   (b) (1) For each taxable year beginning on or after January 1,
1997, and before January 1, 1999, the reference to "20 percent" in
Section 41(a)(1) of the Internal Revenue Code is modified to read "11
percent."
   (2) For each taxable year beginning on or after January 1, 1999,
and before January 1, 2000, the reference to "20 percent" in Section
41(a)(1) of the Internal Revenue Code is modified to read "12
percent."
   (3) For each taxable year beginning on or after January 1, 2000,
 and before January 1, 2014,  the reference to "20 percent"
in Section 41(a)(1) of the Internal Revenue Code is modified to read
"15 percent." 
   (4) For each taxable year beginning on or after January 1, 2014,
and before January 1, 2015, the reference to "20 percent" in Section
41(a)(1) of the Internal Revenue Code is modified to read "18
percent."  
   (5) For each taxable year beginning on or after January 1, 2015,
and before January 1, 2016, the reference to "20 percent" in Section
41(a)(1) of the Internal Revenue Code is modified to read "21
percent."  
   (6) For each taxable year beginning on or after January 1, 2016,
and before January 1, 2017, the reference to "20 percent" in Section
41(a)(1) of the Internal Revenue Code is modified to read "24
percent."  
   (7) For each taxable year beginning on or after January 1, 2017,
and before January 1, 2018, the reference to "20 percent" in Section
41(a)(1) of the Internal Revenue Code is modified to read "27
percent."  
   (8) For each taxable year beginning on or after January 1, 2018,
and before January 1, 2019, the reference to "20 percent" in Section
41(a)(1) of the Internal Revenue Code is modified to read "30
percent."  
   (9) For each taxable year beginning on or after January 1, 2019,
the reference to "20 percent" in Section 41(a)(1) of the Internal
Revenue Code is modified to read "15 percent." 
   (c) Section 41(a)(2) of the Internal Revenue Code shall not apply.

   (d) "Qualified research" shall include only research conducted in
California.
   (e) In the case where the credit allowed under this section
exceeds the "net tax," the excess may be carried over to reduce the
"net tax" in the following year, and succeeding  nine  years
if necessary, until the credit has been exhausted.
   (f) (1) With respect to any expense paid or incurred after the
operative date of Section 6378, Section 41(b)(1) of the Internal
Revenue Code is modified to exclude from the definition of "qualified
research expense" any amount paid or incurred for tangible personal
property that is eligible for the exemption from sales or use tax
provided by Section 6378.
   (2) For each taxable year beginning on or after January 1, 1998,
the reference to "Section 501(a)" in Section 41(b)(3)(C) of the
Internal Revenue Code, relating to contract research expenses, is
modified to read "this part or Part 11 (commencing with Section
23001)."
   (g) (1) For each taxable year beginning on or after January 1,
2000:
   (A) The reference to "3 percent" in Section 41(c)(4)(A)(i) of the
Internal Revenue Code is modified to read "one and forty-nine
hundredths of one percent."
   (B) The reference to "4 percent" in Section 41(c)(4)(A)(ii) of the
Internal Revenue Code is modified to read "one and ninety-eight
hundredths of one percent."
   (C) The reference to "5 percent" in Section 41(c)(4)(A)(iii) of
the Internal Revenue Code is modified to read "two and forty-eight
hundredths of one percent."
   (2) Section 41(c)(4)(B) shall not apply and in lieu thereof an
election under Section 41(c)(4)(A) of the Internal Revenue Code may
be made for any taxable year of the taxpayer beginning on or after
January 1, 1998. That election shall apply to the taxable year for
which made and all succeeding taxable years unless revoked with the
consent of the Franchise Tax Board.
   (3) Section 41(c)(7) of the Internal Revenue Code, relating to
gross receipts, is modified to take into account only those gross
receipts from the sale of property held primarily for sale to
customers in the ordinary course of the taxpayer's trade or business
that is delivered or shipped to a purchaser within this state,
regardless of f.o.b. point or any other condition of the sale.
   (4) Section 41(c)(5) of the Internal Revenue Code, relating to
election of alternative simplified credit, shall not apply.
   (h) Section 41(h) of the Internal Revenue Code, relating to
termination, shall not apply.
   (i) Section 41(g) of the Internal Revenue Code, relating to
special rule for passthrough of credit, is modified by each of the
following:
   (1) The last sentence shall not apply.
   (2) If the amount determined under Section 41(a) of the Internal
Revenue Code for any taxable year exceeds the limitation of Section
41(g) of the Internal Revenue Code, that amount may be carried over
to other taxable years under the rules of subdivision (e); except
that the limitation of Section 41(g) of the Internal Revenue Code
shall be taken into account in each subsequent taxable year.
   (j) Section 41(a)(3) of the Internal Revenue Code shall not apply.

   (k) Section 41(b)(3)(D) of the Internal Revenue Code, relating to
amounts paid to eligible small businesses, universities, and federal
laboratories, shall not apply.
   (l) Section 41(f)(6), relating to energy research consortium,
shall not apply. 
   (m) A taxpayer may sell a credit allowed under this section
pursuant to Article 4.5 (commencing with Section 12097) of Chapter
1.6 of Part, of Division 3 of Title 2 of the Government Code. 
  SEC. 5.  Section 19535 is added to the Revenue and Taxation Code,
to read:
   19535.  (a) The Franchise Tax Board shall perform the following
audit procedures if a taxpayer filed for a credit under Section
17052.12 or 23609 and was not allowed that credit:
   (1) Use a risk-based approach to conduct an audit. The risk-based
approach shall focus on identifying areas of a taxpayer's business or
trade in which there may be subjectivity in determining whether an
employee of the taxpayer is performing qualified research or
nonqualified research, and what percentage of that employee's time is
devoted to performing qualified research.
   (2) Require a general explanation of the taxpayer's trade or
business, the role of research and development in the trade or
business, the development of new and improved products, processes,
and software from the taxpayer.
   (3) Determine whether the Internal Revenue Services has conducted
an examination of the credit allowed under Section 41 of the Internal
Revenue Code and request a copy of the audit report. If the Internal
Revenue Services has conducted an examination, the Franchise Tax
Board shall rely upon the findings of the examination, subject to
verifying that the research activities and costs were incurred in
state.
   (4) Conduct a physical tour of the taxpayer's facilities and
interview employees of the taxpayer that are performing qualified
research. A physical tour should be conducted prior to arriving at a
determination that a taxpayer's activities do not qualify as
qualified research, as defined in Sections 17052.12 and 23609. The
tour shall include the area in which research is performed and follow
a product or process through its life cycle beginning with
development and ending in production.
   (5) Identify the types of employees dedicated to research,
production, or administrative duties, or a mixture of any of those
activities.
   (b) The Franchise Tax Board may perform the following audit
procedures if a taxpayer filed for a credit under Section 17052.12 or
23609 and was not allowed that credit and the auditor deems it
necessary:
   (1) Ask the taxpayer to provide examples of research projects from
the examination years and to describe projects that are currently
under development.
   (2) Ask the taxpayer to explain each step of the development
process, where mixed-services are performed, and distinguish between
production or administration functions and research.
   (c) If the Franchise Tax Board determines a particular expense to
not be a qualified research expenditure, a taxpayer shall be allowed
an opportunity to provide additional supporting records. If an
adjustment in whether an expense is considered a qualified research
expense is necessary based on the taxpayers additional supporting
records, the Franchise Tax Board shall explain and document the
discrepancy. An adjustment based upon mere criticism of a taxpayer's
workpapers, study, methods, or vague disallowance for law of
substantiation, without actual information or evidence that
contradict a taxpayer's documents or other evidence shall not be
upheld. A lack of substantiation shall be a valid reason for
disallowing a credit when the taxpayer only submits vague testimony.
  SEC. 6.  Section 23609 of the Revenue and Taxation Code is amended
to read:
   23609.  For each taxable year beginning on or after January 1,
1987, there shall be allowed as a credit against the "tax" (as
defined by Section 23036) an amount determined in accordance with
Section 41 of the Internal Revenue Code, except as follows:
   (a) For each taxable year beginning before January 1, 1997, both
of the following modifications shall apply:
   (1) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "8 percent."
   (2) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "12 percent."
   (b) (1) For each taxable year beginning on or after January 1,
1997, and before January 1, 1999, both of the following modifications
shall apply:
   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "11 percent."
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "24 percent."
   (2) For each taxable year beginning on or after January 1, 1999,
and before January 1, 2000, both of the following shall apply:
   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "12 percent."
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "24 percent."
   (3) For each taxable year beginning on or after January 1, 2000,
 and before January 1, 2014,  both of the following shall
apply:
   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "15 percent."
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "24 percent." 
   (4) For each taxable year beginning on or after January 1, 2014,
and before January 1, 2015, both of the following shall apply: 

   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "18 percent."  
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "27 percent."  
   (5) For each taxable year beginning on or after January 1, 2015,
and before January 1, 2016, both of the following shall apply: 

   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "21 percent."  
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "30 percent."  
   (6) For each taxable year beginning on or after January 1, 2016,
and before January 1, 2017, both of the following shall apply: 

   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "24 percent."  
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "33 percent."  
   (7) For each taxable year beginning on or after January 1, 2017,
and before January 1, 2018, both of the following shall apply: 

   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "27 percent."  
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "36 percent."  
   (8) For each taxable year beginning on or after January 1, 2018,
and before January 1, 2019, both of the following shall apply: 

   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "30 percent."  
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "39 percent."  
   (9) For each taxable year beginning on or after January 1, 2019,
both of the following shall apply:  
   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "15 percent."  
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "24 percent." 
   (c) (1) With respect to any expense paid or incurred after the
operative date of Section 6378, Section 41(b)(1) of the Internal
Revenue Code is modified to exclude from the definition of "qualified
research expense" any amount paid or incurred for tangible personal
property that is eligible for the exemption from sales or use tax
provided by Section 6378.
   (2) "Qualified research" and "basic research" shall include only
research conducted in California.
   (d) The provisions of Section 41(e)(7)(A) of the Internal Revenue
Code, shall be modified so that "basic research," for purposes of
this section, includes any basic or applied research including
scientific inquiry or original investigation for the advancement of
scientific or engineering knowledge or the improved effectiveness of
commercial products, except that the term does not include any of the
following:
   (1) Basic research conducted outside California.
   (2) Basic research in the social sciences, arts, or humanities.
   (3) Basic research for the purpose of improving a commercial
product if the improvements relate to style, taste, cosmetic, or
seasonal design factors.
   (4) Any expenditure paid or incurred for the purpose of
ascertaining the existence, location, extent, or quality of any
deposit of ore or other mineral (including oil and gas).
   (e) (1) In the case of a taxpayer engaged in any biopharmaceutical
research activities that are described in codes 2833 to 2836,
inclusive, or any research activities that are described in codes
3826, 3829, or 3841 to 3845, inclusive, of the Standard Industrial
Classification (SIC) Manual published by the United States Office of
Management and Budget, 1987 edition, or any other biotechnology
research and development activities, the provisions of Section 41(e)
(6) of the Internal Revenue Code shall be modified to include both of
the following:
   (A) A qualified organization as described in Section 170(b)(1)(A)
(iii) of the Internal Revenue Code and owned by an institution of
higher education as described in Section 3304(f) of the Internal
Revenue Code.
   (B) A charitable research hospital owned by an organization that
is described in Section 501(c)(3) of the Internal Revenue Code, is
exempt from taxation under Section 501(a) of the Internal Revenue
Code, is not a private foundation, is designated a "specialized
laboratory cancer center," and has received Clinical Cancer Research
Center status from the National Cancer Institute.
   (2) For purposes of this subdivision:
   (A) "Biopharmaceutical research activities" means those activities
that use organisms or materials derived from organisms, and their
cellular, subcellular, or molecular components, in order to provide
pharmaceutical products for human or animal therapeutics and
diagnostics. Biopharmaceutical activities make use of living
organisms to make commercial products, as opposed to pharmaceutical
activities that make use of chemical compounds to produce commercial
products.
   (B) "Other biotechnology research and development activities"
means research and development activities consisting of the
application of recombinant DNA technology to produce commercial
products, as well as research and development activities regarding
pharmaceutical delivery systems designed to provide a measure of
control over the rate, duration, and site of pharmaceutical delivery.

   (f) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" in the
following year, and succeeding  nine  years if necessary,
until the credit has been exhausted.
   (g) For each taxable year beginning on or after January 1, 1998,
the reference to "Section 501(a)" in Section 41(b)(3)(C) of the
Internal Revenue Code, relating to contract research expenses, is
modified to read "this part or Part 10 (commencing with Section
17001)."
   (h) (1) For each taxable year beginning on or after January 1,
2000:
   (A) The reference to "3 percent" in Section 41(c)(4)(A)(i) of the
Internal Revenue Code is modified to read "one and forty-nine
hundredths of one percent."
   (B) The reference to "4 percent" in Section 41(c)(4)(A)(ii) of the
Internal Revenue Code is modified to read "one and ninety-eight
hundredths of one percent."
   (C) The reference to "5 percent" in Section 41(c)(4)(A)(iii) of
the Internal Revenue Code is modified to read "two and forty-eight
hundredths of one percent."
   (2) Section 41(c)(4)(B) shall not apply and in lieu thereof an
election under Section 41(c)(4)(A) of the Internal Revenue Code may
be made for any taxable year of the taxpayer beginning on or after
January 1, 1998. That election shall apply to the taxable year for
which made and all succeeding taxable years unless revoked with the
consent of the Franchise Tax Board.
   (3) Section 41(c)(7) of the Internal Revenue Code, relating to
gross receipts, is modified to take into account only those gross
receipts from the sale of property held primarily for sale to
customers in the ordinary course of the taxpayer's trade or business
that is delivered or shipped to a purchaser within this state,
regardless of f.o.b. point or any other condition of the sale.
   (4) Section 41(c)(5) of the Internal Revenue Code, relating to
election of the alternative simplified credit, shall not apply.
   (i) Section 41(h) of the Internal Revenue Code, relating to
termination, shall not apply.
   (j) Section 41(g) of the Internal Revenue Code, relating to
special rule for passthrough of credit, is modified by each of the
following:
   (1) The last sentence shall not apply.
   (2) If the amount determined under Section 41(a) of the Internal
Revenue Code for any taxable year exceeds the limitation of Section
41(g) of the Internal Revenue Code, that amount may be carried over
to other taxable years under the rules of subdivision (f), except
that the limitation of Section 41(g) of the Internal Revenue Code
shall be taken into account in each subsequent taxable year.
   (k) Section 41(a)(3) of the Internal Revenue Code shall not apply.

   (l) Section 41(b)(3)(D) of the Internal Revenue Code, relating to
amounts paid to eligible small businesses, universities, and federal
laboratories, shall not apply.
   (m) Section 41(f)(6) of the Internal Revenue Code, relating to
energy research consortium, shall not apply. 
   (n) A taxpayer may sell a credit allowed under this section
pursuant to Article 4.5 (commencing with Section 12097) of Chapter
1.6 of Part, of Division 3 of Title 2 of the Government Code.