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Budget, Tax Bill Update

August 08, 1997

On Tuesday, President Clinton signed two budget bills, approved last week by Congress: one aims to balance the budget by the year 2002, and a companion piece cuts taxes by a net $95 billion over five years.

The Taxpayer Relief Act of 1997 includes a provision that extends the 20 percent federal research and development tax credit from May 31, 1997 to June 30, 1998. The Act, while not providing a two-year extension that proponents sought, provides continuity for the program. The tax credit is not a permanent provision and was allowed to expire for months between 1995 and 1996.

The Act also includes a three-year Brownfields tax incentive that will reduce the cost of cleaning up thousands of contaminated, abandoned sites in economically distressed areas by permitting clean-up costs to be deducted immediately for tax purposes. The Treasury Department estimates that this $1.5 billion tax incentive would leverage more than $6 billion for private sector cleanups nationwide, allowing redevelopment of 14,000 Brownfield sites.

Details of the measures now must be written into 13 appropriations bills that Congress is currently addressing, and differences worked out between the two houses. During their deliberations on the appropriations for the Commerce Department, the Senate voted down (57-42) an amendment that would have made large corporations ineligible for the Advanced Technology Program.

Below is a list of R&D agency appropriations that have been approved by either the House or the Senate and the date approved.

Agency Approved by House Approved by Senate DOD 7/29 7/15 NASA, NSF, EPA 7/16 7/22 Most of DOE 7/25 7/16 Commerce --- 7/29 USDA 7/24 7/24 DOT 7/23 7/30 NIH, Education --- ---

AAAS R&D Budget and Policy Project