Opening Statement by Rep. Connie Morella. Re: Technology Subcommittee hearing on HR 2086 IH. Date: July 1, 1999. Source: Subcommittee on Technology. This document was created by Tech Law Journal by scanning a paper copy of the statement as prepared for delivery, and converting to HTML. Hypertext links have been added.

Statement of Chairwoman Constance A. Morella
Subcommittee on Technology
Committee on Science
The Networking and Information Technology Research and
Development Act of 1999: Resources for IT Research
Thursday, July, 1, 1999
10:00 a.m. to 12:00 p.m.
2318 RHOB

I want to welcome everyone to our hearing, "The Networking and Information Technology Research and Development Act of 1999: Resources for IT Research."

Today's rapid advancement in technology development has opened us all up to a new and exciting world that has forever changed the way we live, work, and learn.

With a computer that can fit into the palm of our hand, we can communicate via e-mail, conduct business transactions, and obtain information from the Internet virtually anyplace and anytime.

Emerging technologies have revolutionized our health care industry making it possible for a heart specialist in New York City to effectively diagnose and help treat an ailing patient hundreds of miles away.

And technology in our schools has created vast new opportunities for students to learn in an environment that reaches far beyond the classroom walls.

While we are still a society primarily driven by industry, we've become increasingly reliant on information and the great promise it holds for the future.

Today, the United States remains the undisputed global leader in computing and communications.

A healthy information-technology industry is paramount to ensuring our Nation's economy continues to thrive well into the next century.

Information technology represents one of the fastest growing sectors of the U.S. economy, growing at an annual rate of 12 percent between 1993 and 1997. Since 1992, businesses producing computers, semiconductors, software, and communications equipment have accounted for one third of our economic growth.

Unfortunately, while fundamental research in information technology has contributed to the creation of new industries and high-paying jobs, the current IT boom is built on research carried out more than two decades ago.

If we are to maintain our global preeminence in IT, it is clear that we must prioritize and increase our investment in information-technology research.

That is why the Science Committee has introduced H.R. 2086, the Networking and Information Technology Research and Development Act of 1999.

H.R. 2086 is an innovative and bold five year authorization bill aimed at returning the Federal Government's funding emphasis on information technology to basic research.

This is the first in a series of two hearings our Committee will be holding on H.R. 2086.

The Basic Research Subcommittee will be holding a companion hearing shortly after the Independence Day Congressional break.

Today, rather than focus on the entire bill, we will be focusing on three important provisions contained within the legislation.

First, H.R. 2086 makes permanent the Research and Development (R&D) tax credit.

Unfortunately, just yesterday, the R&D tax credit expired once again for the 10th time.

This annual guessing game surrounding the extension of the credit has often inhibited those in the high-tech industry from planning for and engaging in long-term research. In fact, when the tax credit temporarily expired last year, some projects were actually canceled.

Yet, a recent study conducted by the former consulting firm, Coopers & Lybrand, clearly highlights the economic benefits of the R&D tax credit.

According to the study, making the credit permanent would increase private sector investment in R&D by roughly an additional $41 billion over the next 10 years.

More importantly, it concluded that a permanent R&D tax credit, through increased productivity and economic growth, would ultimately pay for itself, creating a win-win situation for both taxpayers and government.

I am pleased to report that the Clinton Administration has recently informed the Science Committee that it has reversed its previous position and now supports making the tax credit permanent.

In addition to permanently extending the R&D tax credit, H.R. 2086 seeks to improve the IT workforce by providing college students the opportunity to get hands on experience in the information technology workforce.

Specifically, H.R. 2086 authorizes $95 million over five years to establish an internship program which will award grants to colleges, including community colleges, for students to intern at IT companies.

As most of you know, we have again reached our limit on the number of temporary Hl-B visas granted to high-tech foreign workers despite an increase approved by Congress last year.

The high-tech community is already pressing Congress to again take action and provide for an additional increase in the number of visas allocated this year.

I supported raising the limit last Congress, but I also feel that we need to do more to actively train and recruit U.S. workers to fill these high-tech jobs. That is why the internship program created in H.R. 2086 is so important.

In addition to providing a quality education on campus, we need to get students out of the classroom and into the business community so that they can see first hand the enormous opportunity and benefits afforded to those who choose to pursue careers in the high-tech fields.

I am also concerned that we need to do more to draw women and minorities into the IT workforce.

Women represent nearly 50 percent of all U.S. workers, yet only comprise roughly 22 percent of the science and engineering workforce.

There are currently more female clergy than there are female engineers in the workforce.

So I think the internship program proposed in H.R. 2086 can also go a long way in helping to entice those who are currently under-represented in the science & engineering fields to explore careers in IT.

Finally, H.R. 2086 directs the National Science Foundation to conduct a study on the availability of encryption technologies in foreign countries.

As you know, current export policy restricts the exportation of certain U.S. encryption technologies.

Critics of the Administration's policy argue that strong, high-quality encryption products already are widely available in foreign markets. Thus, U.S. companies are unable to compete on a level playing field in the global marketplace.

We are hopeful that the study conducted by NSF will allow the Administration and Congress to make informed decisions on criteria for exporting U.S. encryption products and will help us to ensure that U.S. companies remain competitive in the international market.

We are joined by a distinguished panel of guests today to discuss these three provisions of the Networking and Information Technology Research and Development Act.

I look forward to their testimony and welcome everyone here today.

Thank you.