[Congressional Record Volume 141, Number 167 (Thursday, October 26, 1995)]
[Extensions of Remarks]
[Page E2060]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             REMOVING BARRIERS TO RESEARCH AND DEVELOPMENT

                                 ______


                          HON. CHRISTOPHER COX

                             of california

                    in the house of representatives

                       Thursday, October 26, 1995

  Mr. COX of California. Mr. Speaker, the House is today considering 
H.R. 2491, the Seven-Year Balanced Budget Reconciliation Act of 1995. 
We have a moral responsibility to cease building a flawed Federal 
bureaucracy on the backs of our children. This legislation, the most 
important in years, will free our economy from the burden of wasteful 
Government spending and empower the private sector to build a brighter 
future for the next generation.
  There are few provisions of the Reconciliation Act which do more to 
unleash the creativity and productivity in the private sector than the 
research and experimentation tax credit. Since 1981, the R&E tax credit 
has proven a powerful boost to American competitiveness in our global 
economy. By extending the R&E tax credit, this legislation will ensure 
that our Nation's research base continues to be a dynamic source of job 
creation and technological innovation. Though many of us hoped that 
this credit might be made permanent, I fully understand the revenue 
constraints under which we all must operate and therefore applaud the 
decision to favor an extension.
  Mr. Speaker, in addition to extending this useful credit, the Budget 
Reconciliation Act we're currently considering will helpfully eliminate 
a Government-created barrier to growth in the electronics and 
biotechnology industries. As Gordon Steel, V.P. and CEO of the Xilinx 
Corp., and others have pointed out, the current tax code unfairly 
denies full eligibility for the R&E tax credit to companies which began 
operating between 1984 and 1988. This arbitrary policy has proven to be 
a significant roadblock to U.S. business development.
  To correct this inequity, the budget reconciliation bill before us 
includes commonsense guidelines to determine qualification for start-up 
R&E credit--regardless of the year a company began operations. I am 
delighted to support this important effort to remove existing penalties 
for companies that invest in long-term R&D, and I urge all my 
colleagues to join with me in voting for this landmark legislation.

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