I. Introduction and Summary Comments Presented below are specific comments concerning proposed legislation dealing with expanded incentives for research Bills S.738, S.1194 and S.1195. S.738 proposes to make permanent the credit for increasing S.1194 and S.1195 both propose to expand the scope of existing for basic research should be enhanced by the exclusion of basic research from the base-period limitation, the elimination of the prepaid contract research rules, and the addition of payments for scientific education being eligible for the credit. In general, the bills appear to contain the appropriate provisions to accomplish these goals. However, in a few instances which are dealt with below, certain modifications may enhance the encouraging intent of the proposed legislation. II. S.738 Research Incentives Continuation Act of 1983 The bill proposes to eliminate the sunset provision contained in Internal Revenue Code section 44F and make the credit provided by the section (R&D Credit) permanent. We believe that this proposal is appropriate, in fact, The present provisions which would cause the R&D Credit to III. S.1194 A. B. Technology Education Assistance and Development Section 174A(c)(1) defines qualified computer equipment Because the definition is so specific, it is possible This problem could be cured by making it clear that the of hardware or software which are not intended to qualify could be specifically excluded. Section 174A(c)(1): 1. Subparagraph (I) mandates that donated property be kept by the recipient for the property's ACRS life. 2. A number of questions surface with respect to this. First, since the bill specifically permits software sumption that software is ACRS property? which ACRS class is the appropriate one? If not, what would be the length of time software must be retained? From a policy point of view, it may not make sense It may make more sense to make this provision more time. |