SECTION 8. GRANTS IN LIEU OF

TAX CREDITS FOR QUALIFIED INVESTMENTS IN A QUALIFYING THERAPEUTIC DISCOVERY PROJECT

.01 Background . (1) Section 9023(e)(1) of the Affordable Care Act provides that upon application, the Secretary will provide a grant to each person who makes a qualified investment in a qualifying therapeutic discovery project in the amount of 50 percent of the investment. No grant will be made with respect to any investment unless the investment is made during a taxable year beginning in 2009 or 2010.

(2) Section 9023(e)(2)(A) of the Affordable Care Act provides that, at the stated election of the applicant, an application for certification under § 48D(d)(2) of the Code for a credit for the taxable year of the applicant which begins in 2009 will be considered to be an application for a grant under section 9023(e)(1) for the taxable year.

(3) Section 9023(e)(2)(B) of the Affordable Care Act provides that an application for a grant under section 9023(e)(1) for a taxable year beginning in 2010 must be submitted (i) not earlier than the day after the last day of the taxable year, and (ii) not later than the due date (including extensions) for filing the return of tax for the taxable year.

(4) Section 9023(e)(2)(C) of the Affordable Care Act provides that an application for a grant under section 9023(e)(1)

as eligible for the credit or grant under § 48D and the amount of the credit or grant allocated to the taxpayer for the taxpayer’s project(s). If the amount of the taxpayer’s qualified investment certified by the Service is less than the taxpayer’s total qualified investment for 2009 and 2010, then the taxpayer may attribute the certification to any of the qualified investment costs of the project(s) to which the certification relates, subject to the provisions of section 5.02(10) of this notice.

(10) If the taxpayer requests a grant for both 2009 and 2010 and the aggregate amount of the taxpayer’s qualified investment certified by the Service for both 2009 and 2010 is less than the taxpayer’s total qualified investment for 2009 and 2010, then the taxpayer’s qualified investment will be attributed to 2009 before 2010.

(11) If the amount of the taxpayer’s certification by the Service is based on a qualified investment expected to be made, and the amount certified exceeds the taxpayer’s actual qualified investment for 2009 and 2010, then the credit allocated to the taxpayer shall be reduced by 50 percent of the difference between the qualified investment certified by the Service and the taxpayer’s actual qualified investment.

(12) If an applicant has an overpayment after receiving a certification and claiming a credit under § 48D, the rules of the Code with respect to overpayments of tax, including the rules of § 6402 relating to offsets, will apply. If an applicant elects to receive a grant, the offset provisions under Title 31, rather than § 6402 of the Code, will apply.