AeA Applauds Governor's Competitiveness Council's Recommendations, Urges Legislature to Enact Reforms to Keep Texas Competitive

Austin, TX (August 7, 2008) – One day after the Texas Competitiveness Council presented its recommendations to Governor Rick Perry and the public, AeA commends the Council and urges the Texas legislature to move quickly and enact important and necessary changes to make Texas more economically secure, technologically advanced, and well-positioned to compete in the global marketplace. Envisioned and appointed by Governor Perry, the Competitiveness Council is composed of business and community leaders who study issues most critical to the economic security and competitiveness of the state of Texas including workforce development, education, energy, research and development, and manufacturing.

Jeff Clark, AeA’s Director of Public Policy for the Southern Region, said, "AeA commends the members of the Competitiveness Council for their diligence, and thanks Texas Governor Perry for his leadership in establishing the Council. While Texas continues to rank as one of the best places to do business in the country, there is still much that can be done to improve the competitiveness of our workforce, our educational system, and our tax structure.

"AeA is particularly encouraged by the Council’s recommendation that Texas enact a research and development (R&D) tax credit. Texas is one of only six states without tax incentives to encourage research and development. By moving quickly to act in this area, the legislature can send a critical message that Texas is not only open for business, but is also actively recruiting. Texas can use a tax credit to attract emerging technologies and those companies now doing the critical research that will yield economic opportunity in the years to come.

“Breakthroughs in areas such as medical technologies, computing, biotechnology, alternative energy, and agricultural science can be researched, developed, and commercialized in Texas if the State adopts policies that invite research investment.

“Thanks to a robust economy and fiscally prudent policies, Texas is uniquely positioned to invest in improvements to its workforce development and educational systems, its tax structure, and its infrastructure. AeA looks forward to continue working closely with legislative leadership to make these important changes.”

AeA suggests two tax incentives to attract an increased level of R&D activity to Texas:

· A sales and use tax exemption on materials and equipment purchased for research and development purposes - under current law, materials and equipment used in manufacturing are already exempted. Extending this exemption will allow companies to leverage their R&D budgets, will attract more R&D to the state, and will simplify the tax burden for those companies using equipment for both research and manufacturing.

· AeA echoes the Council’s recommendation that the state reestablish an R&D tax credit applicable toward the state's business tax. The credit, which had existed under the state's franchise tax, was eliminated when the franchise tax was replaced with the gross margins tax. It is time to reinstitute that credit and make Texas an even more attractive place in which to develop new ideas and products.

For more information about AeA’s Texas Council, please visit www.aeanet.org/texas.

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About AeA
AeA, the nation’s largest technology trade association representing all segments of the high-tech industry, is dedicated solely to helping our members’ top line and bottom line. We do this in partnership with our small, medium, and large member companies by lobbying governments at the state, federal, and international levels, providing access to capital and business opportunities, and offering select business services and networking programs. For more information, please visit www.aeanet.org.

This page was last updated on 08/11/08.