New Mexico’s two senators today teamed to amend the JOBS Act with a provision that will encourage more U.S. businesses to invest in research & development. The amendment, written by Jeff Bingaman and co-sponsored by Pete Domenici, expands the existing R&D tax credit so that American companies that partner with federal laboratories for R&D, or form nonprofit research consortia, can take advantage of the R&D tax credit. For decades, Bingaman and Domenici have worked together as two of the Senate’s most steady supporters of science and technology. [From Jeff’s personal office. Media contact is Jude McCartin, 202/224-1804.] SENATE ADOPTS BINGAMAN-DOMENICI MEASURE TO ENCOURAGE U.S. COMPANIES TO INVEST IN RESEARCH & DEVELOPMENT DOE LABS WOULD BENEFIT FROM INCREASED R&D, LEADING-EDGE JOBS WOULD BE RETAINED AND CREATED U.S. Senator Jeff Bingaman today won Senate support of an amendment he wrote to encourage more U.S. businesses to invest in research and development. Bingaman, the top Democrat on the Senate Energy and Natural Resources Committee, said Department of Energy research laboratories in New Mexico and across the country would play a major role in helping companies develop the new research. Bingaman’s amendment, cosponsored by U.S. Senator Pete Domenici, has two components. First, it allows a consortium of up to five U.S. companies to take advantage of a 20 percent research tax credit. Under current law, consortiums receive a reduced R&D tax credit. As a result companies that want to take advantage of the R&D credit must bear the capital costs alone. Bingaman’s amendment will allow companies to share the expense. The Bingaman-Domenici amendment also eliminates a restriction in current law that allows companies to only consider 65 percent of their eligible research expenses for the purpose of calculating their tax credit when the research is conducted at places such as federal laboratories, universities or small businesses. Instead, the measure allows companies to consider 100 percent of their expenses if they contract with a lab, university, or small business. "Our country has been losing jobs at a frightening pace. I strongly believe that one way to get our economy on track is to regain our competitive edge. We can do that by encouraging U.S. businesses to invest in research and development activities at Sandia, Los Alamos and other DOE facilities, as well as in small high-tech businesses and universities in New Mexico and across the country," Bingaman said. "That is exactly what this amendment will allow companies to do." "The R&D tax credit can serve as an effective engine for economic growth in this country," Domenici said. "With this amendment, we achieve part of the improvement in the R&D tax credit that I’ve long sought. This legislation will encourage our high tech companies to use research consortia to optimize their developments, and to better utilize the technical capabilities of small businesses, universities, and federal laboratories." The Bingaman-Domenici amendment was made part of another amendment sponsored by Senators Orrin Hatch (R-UT) and Patty Murray (D-WA), and adds a new, simplified alternative R&D tax credit so more companies may be able to take advantage of the existing credit. Both the Hatch-Murray and Bingaman-Domenici amendments were made part of the JOBs Act - legislation currently under debate, which is designed to increase U.S. manufacturing. Under the bill, the R&D tax credit with the Bingaman improvements would be sunset in 2005. Bingaman and others would seek an extension at that time.
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