WASHINGTON -- Sen. Orrin Hatch celebrated his 65th birthday Monday not by receiving gifts but by trying to give a big one to the nation's high-tech firms and manufacturers.
The Utah Republican, who is now officially a senior citizen, introduced a bill to make permanent a tax credit for research and development of future products.Hatch and Sen. Max Baucus, D-Utah -- co-sponsors of the bill -- have pushed such legislation previously. But it has always ended up instead as temporary extensions of the tax break. The tax credit has been extended nine times since 1981 and is due to expire in June.
Hatch said, "This on-again, off-again pattern makes the credit unreliable and severely handicaps its effectiveness."
He added that research and development projects can last longer than a decade, and businesses need to know if they can count on the credit for long-term planning.
Hatch -- appearing at a press conference wearing a bright tie decorated with computers -- said his bill is especially important to Utah.
"Approximately 80,000 workers in Utah are employees in the 1,400-plus technology-based companies, including many biotechnology and biomedical firms. R&D is the lifeblood of these firms," he said.
He said his bill could help lead to "possibilities beyond imagination" important to continued economic growth.
A long line of business interests praised the legislation and called for its passage.
"Many foreign governments have developed generous research incentives that subsidize their companies heavily for research expenditures. This bill will level the playing field for U.S. companies . . . while encouraging foreign companies to conduct research in the U.S.," said Ruth Harkin, senior vice president of United Technologies Corp.
Her corporation builds such things as Pratt & Whitney aircraft engines, Carrier air conditioning units, Sikorski helicopters and Otis elevators.
Roger D. Wheeler, chief tax officer for General Motors, representing the National Association of Manufacturers, said, "the R&D tax credit contributes to American manufacturers' ability to retain and hire workers who perform the actual research and development."
A coalition of 52 trade groups calling itself the R&D Credit Coalition also praised it. Judy Carter, president of Softworks, who represented the coalition, said, "If we expect to lead technologically, it is imperative that we make long-term investments in innovation."