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CONTENTS

ADMINISTRATION WITNESSES

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American Bar Association, Edward N. Delaney, chairman, section of taxation.

American Car Rental Association

American Education Associations, Edward J. Bloustein.

American Electronics Association, Roger Wellington

American Society of Engineering Education, Stephen Kahne...

American Vocational Association, Gene Bottoms, executive director.

Baran, Jan W., Esq., on behalf of the Knight Foundation....

Bloch, Erich, chairman of the board, Semiconductor Research Corp........

Bloustein, Edward J., president, Rutgers, the State University of New Jersey,

on behalf of the American Education Associations .....

Blyth Eastman Paine Webber, Nicholas Clements, vice president

Bothwell, Robert O., executive director, National Committee for Responsive

Philanthropy.

Bottoms, Gene, executive director, American Vocational Association.

Bregman, Stanley I., on behalf of the Truck Renting and Leasing Association

and the American Car Rental Association......

Bryan, L. Thomas, Jr., chairman, Committee on Capital Availability for Re-

search and Development, New England Council, Inc.
Buckman, Thomas R., president, the Foundation Center
Business Equipment Manufacturers Association, the Scientific Apparatus

Makers Association and the Semiconductor Industry Association, Larry R.

Langdon

Chandler, Hon. Rod, a U.S. Representative from Washington

Clements, Nicholas, vice president, Blyth Eastman Paine Webber

Coalition of Service Industries, Frederic K. Howard.

Council on Foundations, James A. Joseph, president.

Delaney, Edward N., chairman, section of taxation, American Bar Associa-

tion...

Foundation Center, Thomas R. Buckman, president.

Freeman, Mrs. Orville L., national president, Girl Scouts of America

Girl Scouts of America, Mrs. Orville L. Freeman, national president.

Harris, Richard D., manager, Information Management Policy and Productiv-

ity, Xerox Corp., on behalf of the Rochester tax council...
Heritage Foundation, William J. Lehrfeld, Esq., special counsel.
Howard, Frederic K., vice president and treasurer, Johnson & Higgins on

behalf of the Coalition of Service Industries

Independent Sector, Brian O'Connell, president...

Joseph, James A., president, Council on Foundations..

Kahne, Stephen, dean of engineering, Polytechnic Institute of New York on

behalf of the American Society of Engineering Education.

Knight Foundation, Jan W. Baran, Esq
Langdon, Larry R., corporate tax director and tax counsel, Hewlett-Packard

Co., on behalf of the Computer and Business Equipment Manufacturers
Association, the Scientific Apparatus Makers Association, and the Semicon-

ductor Industry Association ...
Lehrfeld, William J., Esq., special counsel for the Heritage Foundation

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Page 372

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207 393

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211

134 372

Moore, Wayne, R., president and chief executive officer, Moore Special Tool

Co., Inc., on behalf of the National Machine Tool Builders' Association .......
Moskowitz, Jack, senior vice president, Federal Government relations, United

Way of America...
Motor Vehicle Manufacturers Association, John S. Nolan, Esq.
Motley, John J., III, director of Federal legislation, National Federation of

Independent Business....
National Committee for Responsive Philanthropy, Robert O. Bothwell, execu-

tive director.
National Federation of Independent Business, John J. Motley III, director of

Federal legislation
National Machine Tool Builders’ Association, Wayne R. Moore..
New England Council, Inc., L. Thomas Bryan Jr., chairman, Committee on

Capital Availability for Research and Development....
Nolan, John S., Esq., on behalf of the Motor Vehicle Manufacturers Associa-

tion...
O'Connell, Brian, president, Independent Sector....
Semiconductor Research Corp., Erich Bloch, chairman of the board
Truck Renting and Leasing Association and the American Car Rental Asso-

ciation, Stanley I. Bregman...
United Way of America, Jack Moskowitz, senior vice president, Federal Gov-

ernment relations........ Wellington, Roger, chairman and chief executive officer, Augat, Inc., on

behalf of the American Electronics Association Zschau, Hon. Ed, a U.S. Representative from California..

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393 202 346

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257 49

ADDITIONAL INFORMATION

Committee press release .....

Opening statement of Senator Durenberger.....
Opening statement of Senator Danforth.

Opening statement of Senator Wallop....

Opening statement of Senator Mitchell

Description of S. 1758, S. 1857, and S. 2165 by the Joint Committee on

Taxation .....

51 64 84

Prepared statement of Congressman Ed Zschau
Prepared statement of Congressman Rod Chandler
Prepared statements of Hon. John E. Chapoton.......
Prepared statement of the Truck Renting and Leasing Association and the

American Car Rental Association......
Prepared statement of the National Federation of Independent Business.
Prepared statement of the American Bar Association,
Prepared statement of the Council on Foundations...
Prepared statement of the Foundation Center
Prepared statement of the Girl Scouts of America.
Prepared statement of the YMCA..
Prepared statement of the Independent Sector
Prepared statement of the United Way of America
Prepared statement of the National Committee for Responsive Philanthropy ...
Prepared statement of the Heritage Foundation....
Prepared statement of the Knight Foundation.
Prepared statement of the American Electronics Association.
Prepared statement of the Rochester Tax Council...
Prepared statement of the Business Equipment Manufacturers Association,

the Scientific Apparatus Makers Association, and the Semiconductor Indus

try Association
Prepared statement of Blyth Eastman Paine Webber Inc
Prepared statement of the New England Council, Inc..
Prepared statement of Edward J. Bloustein ......
Prepared statement of the American Vocational Association
Prepared statement of the Semiconductor Research Corp
Prepared statement of the American Society for Engineering Education

132 136 144 160 184 193 199 203 208 213 232 250 259 281

290 307 310 328 332 348 366 436 443 451 455 479 490 493 503 510 513 538 544 546 549 551 553

Prepared statement of the National Machine Tool Builders' Association..
Prepared statement of the Motor Vehicle Manufacturers Association ....
Prepared statement of the Coalition of Service Industries...

Page 376 395 427

COMMUNICATIONS
Statement of Congressman James M. Shannon.
American Telephone & Telegraph Co.....
Associated General Contractors of America
Arthur Andersen & Co......
Clara Abbott Foundation..
Consortium of Social Science Associations.......
Chamber of Commerce of the United States of America
Computer and Business Equipment Manufacturers Association.....
Deloitte Haskins & Sells...
Ernst & Whinney
Hospital Corp. of America..
University of Michigan
National Association of Foundations
University of Notre Dame.
National Conference of Catholic Charities..
U.S. Air Group, Inc...

PROPOSALS RELATING TO FOUNDATIONS, HIGH

TECHNOLOGY, AND DEPRECIATION

FRIDAY, FEBRUARY 24, 1984

U.S. SENATE, SUBCOMMITTEE ON TAXATION AND DEBT

MANAGEMENT AND SUBCOMMITTEE ON SAVINGS, PEN-
SIONS, AND INVESTMENT POLICY, OF THE COMMITTEE ON
FINANCE,

Washington, DC. The subcommittees met, pursuant to notice, at 9:40 a.m. in room SD-215, Dirksen Senate Office Building, Senators Durenberger and Chafee (chairmen) presiding.

Present: Senators Chafee, Durenberger, Danforth, Wallop, Bentsen, and Mitchell.

[The press release announcing the hearings, background material on the bills under discussion, and the prepared statements of Senators Chafee and Wallop follow:]

[Press release No. 84-113, January 31, 1984)

FINANCE COMMITTEE SETS HEARING ON FOUNDATIONS, HIGH TECHNOLOGY AND

DEPRECIATION PROPOSALS Senator Bob Packwood, Chairman of the Subcommittee on Taxation and Debt Management, and Senator John Chafee, Chairman of the Subcommittee on Savings, Pensions, and Investment Policy, announced today that a joint hearing will be held on Friday, February 24, 1984, on proposals concerning private foundations and incentives for high technology.

The hearing will begin at 9:30 a.m. in Room SD-215 of the Dirksen Senate Office Building

The following proposals will be considered:

S. 1857.-S. 1857 is designed to increase the ability of private foundations to receive donations and use their funds for charitable purposes. The bill generally eliminates distinctions in the tax treatment of donors to private foundations and public charities. The bill also eliminates certain restrictions on the activities of donors to private foundations, and changes certain reporting and disclosure obligations of private foundations.

S. 2165.-S. 2165, the High Technology Research and Scientific Education Act of 1983, combines a number of proposals and bills pending in the Senate that deal with tax incentives designed to promote the development of new technology. The bill (1) makes the tax credit for qualified research expenses permanent, and adopts a new separate definition of qualified research for purposes of the credit; (2) adds depreciation as a qualified research expense for purposes of the credit; (3) creates a new credit for university basic research; and (4) makes the credit available for use by start-up companies and joint research ventures. The bill also expands the deduction for corporate donations of scientific equipment to certain post-secondary schools, and sets forth rules governing the exclusion from income of scholarships, grants and student loan forgiveness received by certain graduate students in scientific fields.

Immediately following the joint hearing, the Subcommittee on Taxation and Debt Management will hear testimony on S. 1758, the Accounting Cost Recovery Simplification Act of 1983, introduced by Senator Bentsen for himself and others.

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