[Congressional Record Volume 141, Number 22 (Friday, February 3, 1995)]
[Extensions of Remarks]
[Page E267]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


      INTRODUCTION OF LEGISLATION TO MAKE THE R&D CREDIT PERMANENT

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                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                        Friday, February 3, 1995
  Mr. NEAL. Mr. Speaker, yesterday Mrs. Johnson, Mr. Matsui, Mr. 
Herger, and I introduced legislation to make permanent the Research and 
Development [R&D] tax credit. U.S. based R&D is critical to our 
continued economic growth. The R&D credit provides a significant 
incentive for U.S. companies of perform valuable R&D in the United 
States providing high-skilled, high-paid jobs for American workers.
  The R&D credit was enacted in 1981 to provide an incentive for 
companies to increase their spending on U.S. R&D. The credit requires 
companies to increase their current year R&D spending above a 
predetermined base before they are eligible to receive the credit. 
Since 1981, the credit has been extended five times and changed to 
reduce the benefits available to certain companies. The current R&D 
credit expires on June 30, 1995.
  Failure to make the credit permanent has substantially reduced its 
value to business. Research and Development projects are generally 
long-term efforts, often spanning 5-10 years. Corporate research 
planners can not rely on the incentive provided by the R&D tax credit 
if it is extended for only 12-18 months at a time.
  I believe New England would substantially benefit from a permanent 
R&D credit. New England is still trying to recover from difficult 
economic times. A permanent R&D credit will provide a signficant 
incentive for New England companies to perform R&D in New England. The 
technological innovations perfected through R&D are necessary to assist 
New England companies that are undergoing defense conversion to compete 
in the market place.
  R&D will help rebuild our economy. I urge you to support this 
legislation.


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