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others, is not sufficient for such information to come within the
meaning of discovery for purposes of this test. The purpose of the
R&E credit was to stimulate capital formation and improve the U.S.
economy--not merely the taxpayer's business. See H. Rept. 97-201,
at 111 (1981), 1981-2 C.B. 352, 358; H. Rept. 99-426, supra at 177,
1986-3 C.B. (Vol. 2) at 177.
The legislative purpose of the discovery test in section 41
was to narrow the scope of the research and experimentation under
section 174 to that which is technological in nature. The
technological-in-nature requirement is consistent with Congress'
concern that the R&E credit was not being used for high technology
research before the 1986 amendments. S. Rept. 99-313, supra at
694-695, 1986-3 C.B. (Vol. 3) at 694-695; H. Rept. 99-426, supra at
178, 1986-3 C.B. (Vol. 2) at 178. Thus, Congress specifically
stated that the discovery process must fundamentally rely on
principles of the hard sciences--namely, physical or biological
sciences, engineering, or computer science.
The parties dispute the significance of note 3 of the
conference report, H. Conf. Rept. 99-841 (Vol. II), supra at II-71
n.3, 1986-3 C.B. (Vol. 4) at 71 n.3, accompanying the TRA 1986.
That footnote states that the research must "expand or refine" the
principles of the hard sciences. Respondent contends that the
phrase "expand or refine" is meant to explain the nature of the
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