SECTION 4. DEFINITIONS

The following definitions apply for purposes of § 48D and this notice:

.01 Qualified Investment . (1) For purposes of § 48D(a), a qualified investment under § 48D(b) of the Code for any taxable year is the aggregate amount of the costs paid or incurred in the taxable year for expenses necessary for and directly related to the conduct of a qualifying therapeutic discovery project (as defined in section 4.02 of this notice).

(2) The amount that is treated as qualified investment for all taxable years with respect to any qualifying therapeutic discovery project may not exceed the amount certified by the Secretary as eligible for the credit.

(3) The qualified investment for any taxable year with respect to any qualifying therapeutic discovery project will not take into account any cost (a) for remuneration for any employee described in § 162(m)(3) of the Code, (b) for interest expenses, (c) for facility maintenance expenses (as defined in section 4.04 of this notice), (d) that is identified as a service cost under § 1.263A–1(e)(4) of title 26, Code of Federal Regulations, or (e) for any other expense as determined by the Secretary.

(4) For purposes of section 4.01(3)(e) of this notice, the Secretary has determined that a qualified investment should be reduced by the amount of any grant excluded from gross income under § 61 of the Code, unless the grant can only be used for costs not included in the definition of a qualified investment under section 4.01(1) of this notice.

(5) In the case of costs described in section 4.01(1) of this notice that are paid for property of a character subject to an allowance for depreciation, rules similar to

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tioned equally among all other projects receiving a certification for only a portion of their qualified investments. Such reapportionment will continue until no project receives certification for an amount that exceeds the qualified investment described in the application as attributable to the project.

(6) For purposes of applying the limitation specified in section 5.02(5) of this notice, a project’s qualified investment will be considered to include any qualified investment made or expected to be made in a taxable year beginning in 2009 or 2010 or both, in each case as represented by the taxpayer in its application for certification. See Appendix A for further information regarding the information required to be submitted with respect to qualified investments made or expected to be made in connection with a qualifying therapeutic discovery project.

(7) In addition to the limitation specified in section 5.02(5) of this notice, the Service will not certify more than $10 million as a qualified investment for any single taxpayer, such that no taxpayer shall be allocated more than $5 million in credits or grants in the aggregate for 2009 and 2010, regardless of the number of projects the taxpayer sponsors. If a taxpayer would otherwise receive certification for an amount of qualified investment that exceeds this $10 million threshold, the amount in excess of $10 million will be apportioned equally among all other projects receiving a certification for only a portion of their qualified investments. Such reapportionment will continue until no taxpayer receives certification for an amount that exceeds the $10 million threshold.

(8) In the primary 2009–2010 allocation round, the Service will approve or deny the taxpayer’s application for § 48D certification no later than October 29, 2010, which is within 30 days after the date timely-filed applications will be considered to be submitted pursuant to section 5.02(3), and will notify the taxpayer, by letter, of its decision. If the application for certification is approved, the date of the certification letter will be treated as the approval date.

(9) If the taxpayer’s application for § 48D certification is approved by the Service, then a certification letter approving the application will state the amount of qualified investment that is certified

for which an application has been submitted pursuant to section 6 of this notice, only if:

(1) HHS determines that the taxpayer’s project is a qualifying therapeutic discovery project (as defined in section 4.02 of this notice);

(2) HHS determines that the taxpayer’s project shows reasonable potential (a) to result in new therapies (i) to treat areas of unmet medical need, or (ii) to prevent, detect, or treat chronic or acute diseases and conditions, (b) to reduce long-term health care costs in the United States, or (c) to significantly advance the goal of curing cancer within the 30-year period beginning on May 21, 2010; and

(3) The Service determines that the taxpayer’s project is among those projects that have the greatest potential (a) to create and sustain (directly or indirectly) high quality, high-paying jobs in the United States, and (b) to advance United States competitiveness in the fields of life, biological, and medical sciences.

.02 Program Specifications . (1) A taxpayer must file with the Service a separate application under § 48D(d)(2)(A) of the Code for each qualifying therapeutic discovery project for which it is seeking certification of a qualified investment. A primary allocation round will be conducted in accordance with the procedures set forth in this notice to issue certifications for both qualified investments made in taxable years beginning in 2009 and qualified investments made in taxable years beginning in 2010. If any portion of the $1 billion available under § 48D(d)(1)(B) for allocation remains unallocated after this primary allocation, one or more additional allocation rounds may be conducted.

(2) For the primary 2009–2010 allocation round, an application for certification may be filed from the date the application form is released (see section 6.02 of this notice), through July 21, 2010. Applications for certification will not be accepted if delivered after July 21, 2010. Section 7502 applies in determining the timeliness of any application for § 48D certification. Under § 7502, the date of the United States postmark stamped on the cover of an application shall be deemed the date of delivery. See section 6 of this notice and Appendix A to this notice for the information required to be filed as part of the application.

See section 10 of this notice and Appendix B of this notice for a consent to disclosure that an applicant may file with the application. Each application will be subject to a preliminary review, which will enable the Service to determine whether the applicant is an eligible taxpayer (as defined in section 4.03 of this notice) and whether the application is otherwise complete. Preliminary review of timely-filed applications will end on September 30, 2010.

(3) Under § 48D(d)(2)(B) of the Code, the Secretary is required to take action to approve or deny any application within 30 days of the submission of the application. Applications will be considered submitted for purposes of § 48D(d)(2)(B) on October 1, 2010, the day after the preliminary review ends. An application for certification may include a request for certification of a project’s costs under section 4.01(1) of this notice for taxable years beginning in 2009, 2010, or both.

(4) The Service will determine whether to certify all or a portion of a taxpayer’s qualified investment eligible for the therapeutic discovery project credit or grant after HHS has completed its review of all applications submitted by eligible taxpayers in accordance with section 5.01(1) and (2) of this notice (see section 6 of this notice for the requirements applicable to the application for § 48D certification).

(5) The Service will certify all or a portion of an eligible taxpayer’s qualified investment for each qualifying therapeutic discovery project for which an application has been submitted pursuant to section 6 of this notice that meets the certification requirements under section 5.01 of this notice. The aggregate amount of qualified investments that will be certified by the Service will not exceed $2 billion. The total amount of credits and grants allocated under the program will not exceed the $1 billion limitation of § 48D(d)(1)(B). The Service will certify an equal amount of qualified investment for each project that meets the certification requirements under section 5.01 of this notice. Nevertheless, in no case will the Service certify more than the amount of the qualified investment attributable to a project. If a project would otherwise receive certification for an amount of qualified investment that exceeds the qualified investment described in the application as attributable to the project, the unused certification amount will be appor

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.04 Effect of Certification and Alloca- tion . A certification and allocation by the Service is not a determination that the costs described in the application were or will be, in fact, paid or incurred or that the costs were or will be necessary for and directly related to the conduct of a qualified therapeutic discovery project under § 48D(b) of the Code.

.05 No Right to a Conference or Ap- peal . A taxpayer does not have a right to a conference relating to any matters under this notice. Further, a taxpayer does not have a right to appeal the decisions made under this notice (including the amount of credit allocated to the project and whether or not to certify the project) to any official of HHS or the Service or the Department of the Treasury.