[Congressional Record Volume 152, Number 25 (Thursday, March 2, 2006)]
[Extensions of Remarks]
[Pages E261-E262]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         INTRODUCTION OF THE INNOVATION AND COMPETITIVENESS ACT

                                 ______
                                 

                           HON. BOB GOODLATTE

                              of virginia

                    in the house of representatives

                        Thursday, March 2, 2006

  Mr. GOODLATTE. Mr. Speaker, today I rise to introduce the Innovation 
and Competitiveness Act.
  The Framers of our system of government realized that innovation was 
essential to the success of the United States. They embodied this 
strong belief in Article I Section 8 of our Constitution, which lays 
the framework for our nation's copyright and patent laws. The Framers 
realized that American innovation was so important that it merited 
specific reference and protection in our founding document.
  Today, America is the world leader in innovation. However, to ensure 
that America remains the world leader, we must again take a hard look 
at our policies to make sure that they still encourage inventors to 
create and businesses to grow and expand.
  Every business and individual must weigh the advantages and the 
hurdles when making the decisions about whether to bring an idea to the 
market, expand services to other geographical areas and the like. In 
addition to market factors, unfortunately, today there are additional 
hurdles to innovation and growth--excessive litigation, as well as 
taxation, red tape and regulation imposed by governments.
  The Innovation and Competitiveness Act is a comprehensive piece of 
legislation to get Congress engaged in the business of promoting 
innovation in America by creating additional incentives for private 
individuals and businesses to create and rollout new products and 
services so that America will remain the world leader in innovation. 
Government sometimes is the problem--not the answer to the problem--so 
the Innovation and Competitiveness Act also addresses government-
imposed hurdles to innovation by clearing the way for inventors and 
businesses to do what they do best--create and compete.
  Specifically, this legislation will promote research and development 
by permanently extending the R&D tax credit. Companies know best how to 
spend their money on research and development, not government 
bureaucracies.
  In addition, excessive red tape and confusing rules regarding tax 
liability are currently stifling businesses from moving across State 
lines. Increasingly, States are taxing businesses outside their borders 
for the right to do business within the State even when those out-of-
State businesses have minimal contacts with the taxing jurisdictions. 
Given this environment, some businesses have made the decision that it 
is not worth expanding to other jurisdictions because of the ambiguity 
about when they must pay these taxes and the fear of aggressive 
taxation and the resulting litigation and compliance costs. The 
Innovation and Competitiveness Act contains provisions to set clear, 
bright line rules for when out-of-State businesses would be obliged to 
pay taxes to a jurisdiction. This bill creates a physical presence test 
such that States could only collect business activity taxes from 
businesses with employees or property in the taxing State. This will 
create the clarity necessary for businesses to grow beyond State lines, 
and offer new and exciting products and services to consumers.

  In addition, excessive litigation hampers investment and innovation. 
With that in mind, this legislation cracks down on frivolous lawsuits 
by strengthening sanctions against attorneys who file truly frivolous 
actions.
  Furthermore, rising health care costs are one of the most difficult 
challenges facing individuals, businesses and manufacturing today. The 
Innovation and Competitiveness Act contains provisions that will allow 
individuals to purchase health insurance that best suits their needs 
and budgets, while also promoting competition in health care. In 
addition, our bill encourages the use of health information technology, 
which will improve health quality and

[[Page E262]]

reduce errors by leveraging cutting edge technology to make medical 
records available almost instantaneously to doctors when they are 
needed so that they can best treat patients. Technology can help reduce 
paperwork and administrative burdens and thus help doctors provide the 
best and fastest care possible to their patients.
  Finally, as we have heard, by 2010, more than 90 percent of all 
scientists and engineers could be living in Asia. This is a major 
challenge to our competitive leadership, but America must keep pace. To 
address this issue, the Innovation and Competitiveness Act includes 
provisions that will provide incentives for teachers to specialize in 
math, science, and other technical fields--and to remain in the 
classroom to educate our youth in these fields. In addition, this 
legislation provides incentives for students to receive degrees in 
technical fields with financial aid and scholarships.
  The Innovation and Competitiveness Act will get Congress into the 
business of protecting America's place as the world leader in 
innovation and competitiveness, and I urge the Members of the House to 
support the initiatives in this important legislation.  

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