[Congressional Record Volume 142, Number 18 (Friday, February 9, 1996)]
[Senate]
[Pages S1180-S1185]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LEAHY (for himself and Mr. Feingold):
  S. 1567. A bill to amend the Communications Act of 1934 to repeal the 
amendments relating to obscene and harassing use of telecommunications 
facilities made by the Communications Decency Act of 1995; to the 
Committee on Commerce, Science, and Transportation.


                     telecommunication legislation

  Mr. LEAHY. Mr. President, last week, the Congress passed 
telecommunications legislation. The President signed it into law this 
week. For a number of reasons, and I stated them in the Chamber at the 
time, I voted against the legislation. There were a number of things in 
that legislation I liked and I am glad to see them in law. There were, 
however, some parts I did not like, one of them especially. Today I am 
introducing a bill to repeal parts of the new law, parts I feel would 
have far-reaching implications and would impose far-reaching new 
Federal crimes on Americans for exercising their free speech rights on-
line and on the Internet.
  The parts of the telecommunications bill called the Communications 
Decency Act are fatally flawed and unconstitutional. Indeed, such 
serious questions about the constitutionality of this legislation have 
been raised that a new section was added to speed up judicial review to 
see if the legislation would pass constitutional muster. The 
legislation is not going to pass that test.
  The first amendment to our Constitution expressly states that 
``Congress shall make no law abridging the freedom of speech.'' The new 
law flouts that prohibition for the sake of political posturing. We 
should not wait to let the courts fix this mistake. Even on an 
expedited basis, the judicial review of the new law would take months 
and possibly years of litigation. During those years of litigation 
unsuspecting Americans who are using the Internet in unprecedented 
numbers and more every day, are going to risk criminal liability every 
time they go on-line.
  Let us be emphatically clear that the people at risk of committing a 
felony under this new law are not child pornographers, purveyors of 
obscene materials, or child sex molesters. These people can already be 
prosecuted and should be prosecuted under longstanding Federal criminal 
laws that prevent the distribution over computer networks of obscene 
and other pornographic materials harmful to minors, under 18 U.S.C. 
sections 1465, 2252 and 2423(a); that prohibit the illegal solicitation 
of a minor by way of a computer network, under 18 U.S.C. section 2252; 
and that bar the illegal luring of a minor into sexual activity through 
computer conversations, under 18 U.S.C. section 2423(b). In fact, just 
last year, we passed unanimously a new law that sharply increases 
penalties for people who commit these crimes.
  There is absolutely no disagreement in the Senate, no disagreement 
certainly among the 100 Senators about wanting to protect children from 
harm. All 100 Senators, no matter where they are from, would agree that 
obscenity and child pornography should be kept out of the hands of 
children. All Senators agree that we should punish those who sexually 
exploit children or abuse children. I am a former prosecutor. I have 
prosecuted people for abusing children. This is something where there 
are no political or ideological differences among us.

  I believe there was a terribly misguided effort to protect children 
from what some prosecutors somewhere in this country might consider 
offensive or indecent online material, and in doing that, the 
Communications Decency Act tramples on the free speech rights of all 
Americans who want to enjoy this medium.
  This legislation sweeps more broadly than just stopping obscenity 
from being sent to children. It will impose felony penalties for using 
indecent four-letter words, or discussing material deemed to be 
indecent, on electronic bulletin boards or Internet chat areas and news 
groups accessible to children.
  Let me give a couple of examples: You send e-mail back and forth, and 
you want to annoy somebody whom you talked with many times before--it 
may be your best buddy--and you use a four-letter word. Well, you could 
be prosecuted for that, although you could pick up the phone, say the 
same thing to him, and you commit no crime; or send a letter and say 
the same word and commit no crime; or talk to him walking down the 
street and commit no crime.
  To avoid liability under this legislation, users of e-mail will have 
to ban curse words and other expressions that might be characterized as 
indecent from their online vocabulary.
  The new law will punish with 2-year jail terms someone using one of 
the seven dirty words in a message to a minor or for sharing with a 
minor material containing indecent passages. In some areas of the 
country, a copy of Seventeen magazine would be considered indecent, 
even though kids buy it. The magazine is among the 10 most frequently 
challenged school library materials in the country. Somebody sends an 
excerpt from it, and bang, they could be prosecuted.
  The new law will make it a crime ``to display in a manner available 
to'' a child any message or material ``that, in context, depicts or 
describes, in terms patently offensive as measured by contemporary 
community standards, sexual or excretory activities or organs* * *'' 
That covers any of the over 13,000 Usenet discussion groups, as well as 
electronic bulletin boards, online service provider chat rooms, and Web 
sites, that are all accessible to children. 

[[Page S1181]]

  This display prohibition, according to the drafters, ``applies to 
content providers who post indecent material for online display without 
taking precautions that shield that material from minors.''
  What precautions will Internet users have to take to avoid criminal 
liability? These users, after all, are the ones who provide the 
``content'' read in news groups and on electronic bulletin boards. The 
legislation gives the FCC authority to describe the precautions that 
can be taken to avoid criminal liability. All Internet users will have 
to wait and look to the FCC for what they must do to protect themselves 
from criminal liability.
  Internet users will have to limit all language used and topics 
discussed in online discussions accessible to minors to that 
appropriate for kindergartners, just in case a child clicks onto the 
discussion. No literary quotes from racy parts of ``Catcher in the 
Rye'' or ``Ulysses'' will be allowed. Certainly, online discussions of 
safe sex practices, or birth control methods, and of AIDS prevention 
methods will be suspect. Any user who crosses the vague and undefined 
line of ``indecency'' will be subject to 2 years in jail and fines.
  This worries me considerably. I will give you an idea of what 
happens. People look at this, and because it is so vague and so broad 
and so sweeping, attempts to protect one's self from breaking the law 
become even broader and even more sweeping.
  A few weeks ago, America Online took the online profile of a 
Vermonter off the service. Why? Because the Vermonter used what AOL 
deemed a vulgar, forbidden word. The word--and I do not want to shock 
my colleagues--but the word was ``breast.'' And the reason this 
Vermonter was using the word ``breast"? She was a survivor of breast 
cancer. She used the service to exchange the latest information on 
detection of breast cancer or engage in support to those who are 
survivors of breast cancer. Of course, eventually, America Online 
apologized and indicated they would allow the use of the word where 
appropriate.
  We are already seeing premonitions of the chilling effect this 
legislation will have on online service providers. Far better we use 
the laws on the books today to go after child pornographers, to go 
after child abusers.
  What strikes some people as indecent or patently offensive may look 
very different to other people in another part of the country. Given 
these differences, a vague ban on patently offensive and indecent 
communications may make us feel good but threatens to drive off the 
Internet and computer networks an unimaginable amount of valuable 
political, artistic, scientific, health and other speech.
  For example, many museums in this country and abroad are going high-
technology and starting Web pages to provide the public with greater 
access to the cultural riches they offer. What if museums, like the 
Whitney Museum, which currently operates a Web page, had to censor what 
it made available online out of fear of being dragged into court? Only 
adults and kids who can make it in person to the museum will be able to 
see the paintings or sculpture censored for online viewing under this 
law.
  What about the university health service that posts information 
online about birth control and protections against the spread of AIDS? 
With many students in college under 18, this information would likely 
disappear under threat of prosecution.
  What happens if they are selling online versions of James Joyce's 
``Ulysses'' or of ``Catcher in the Rye''? Can they advertise this? Can 
excerpts be put online? In all likelihood not. The Internet is breaking 
new ground important for the economic health of this country. 
Businesses, like the Golden Quill Book Shop in Manchester Center, VT, 
can advertise and sell their books around the country or the world via 
the Internet. But now, advertisers will have to censor their ads.
  For example, some people consider the Victoria's Secret catalogue 
indecent. Under this new law, advertisements that would be legal in 
print could subject the advertiser to criminal liability if circulated 
online. You could put them in your local newspaper, but you cannot put 
it online.
  In bookstores and on library shelves, the protections of the first 
amendment are clear. The courts are unwavering in the protection of 
indecent speech. In altering the protections of the first amendment for 
online communications, I believe you could cripple this new mode of 
communication.
  At some point you have to start asking, where do we censor? What 
speech do we keep off? Is it speech we may find politically disturbing? 
If somebody wants to be critical of any one Member of Congress, are we 
able to keep that off? Should we be able to keep that off? I think not. 
There is a lot of reprehensible speech and usually it becomes more 
noted when attempts are made to censor it rather than let it out in the 
daylight where people can respond to it.
  The Internet is an American technology that has swept around the 
world. As its popularity has grown, so have efforts to censor it. For 
example, complaints by German prosecutors prompted an online service 
provider to cut off subscriber access to over 200 Internet news groups 
with the words ``sex,'' ``gay,'' or ``erotica'' in the name. They 
censored such groups as ``clarinet.news.gays,'' which is an online 
newspaper focused on gay issues, and ``gay-net.coming-out,'' which is a 
support group for gay men and women dealing with going public with 
their sexual orientation.

  German prosecutors have also tried to get AOL to stop providing 
access to neo-Nazi propaganda accessible on the Internet. No doubt such 
material is offensive and abhorrent, but nonetheless just as protected 
by our first amendment as indecent material.
  In China, look what they are trying to do. They are trying to create 
an intranet that would heavily censor outside access to the worldwide 
Internet. We ought to make sure it is open, not censored. We ought to 
send that out as an example to China.
  Americans should be taking the high ground to protect the future of 
our home-grown Internet, and to fight these censorship efforts that are 
springing up around the globe. Instead of championing the first 
amendment, however, the Communications Decency Act tramples on the 
principles of free speech and free flow of information that has fueled 
the growth of this medium.
  We have to be vigilant in enforcing the laws we have on the books to 
protect our children from obscenity, child pornography, and sexual 
exploitation. Those laws are being enforced. Just last September, using 
current laws, the FBI seized computers and computer files from about 
125 homes and offices across the country as part of an operation to 
shut down an online child pornography ring.
  I well understand the motivation for the Communications Decency Act. 
We want to protect our children from offensive or indecent online 
materials. This Senator--and I am confident every other Senator--agrees 
with that. But we must be careful that the means we use to protect our 
children does not do more harm than good. We can already control the 
access our children have to indecent material with blocking 
technologies available for free from some online service providers and 
for a relatively low cost from software manufacturers.
  Frankly, and I will close with this, Mr. President, at some point we 
ought to stop saying the Government is going to make a determination of 
what we read and see, the Government will determine what our children 
have or do not have.
  I grew up in a family where my parents thought it was their 
responsibility to guide what I read or would not read. They probably 
had their hands full. I was reading at the age of 4. I was a voracious 
reader, and all the time I was growing up I read several books a week 
and went through our local library in the small town I grew up in very 
quickly. That love of reading has stood me in very good stead. I am 
sure I read some things that were a total waste of time, but very 
quickly I began to determine what were the good things to read and what 
were the bad things. I had read all of Dickens by the end of the third 
grade and much of Robert Louis Stevenson. I am sure some can argue 
there are parts of those that maybe were not suitable for somebody in 
third grade. I do not think I was severely damaged by it at all. That 
same love of reading helped me get through law school and become a 
prosecutor 

[[Page S1182]]
where I did put child abusers behind bars.
  Should we not say that the parents ought to make this decision, not 
us in the Congress? We should put some responsibility back on families, 
on parents. They have the software available that they can determine 
what their children are looking at. That is what we should do. Banning 
indecent material from the Internet is like using a meat cleaver to 
deal with the problems better addressed with a scalpel.
  We should not wait for the courts. Let us get this new 
unconstitutional law off the books as soon as possible.
                                 ______

      My Mr. HATCH (for himself, Mr. Baucus, Mr. Simpson, and Mr. 
        D'Amato):
  S. 1568. A bill to amend the Internal Revenue Code of 1986 to provide 
for the extension of certain expiring provisions; to the Committee on 
Finance.


            extension of expired tax provisions legislation

  Mr. HATCH. Mr. President, I am pleased today to join with my friends 
and colleagues, Senator Baucus, Senator Simpson, and Senator D'Amato, 
in introducing legislation that would extend certain expired tax 
provisions that have been delayed by the recent budget impasse. If no 
action is taken, the current tax treatment for individuals who accept 
educational benefits from their employer or donate stock to a 
charitable foundation will disappear as well as the tax incentives for 
companies who hire disadvantaged employees and invest heavily in 
research and development, orphan drug research, and alternative fuel 
research. These items are noncontroversial and have consistently 
enjoyed bipartisan support. However, because President Clinton vetoed 
the balanced budget of 1995, which included these extensions, these 
much-needed provisions need immediate attention inasmuch as April 15 is 
quickly approaching. Both individuals and businesses are anxiously 
awaiting the extension of these expired provisions so they will be able 
to pay their anticipated tax bill.
   Mr. President, this bill would ensure continued opportunity for 
Americans. The termination of one of these provisions--the employer-
provided educational assistance program--would end the hopes of 
thousands to attend college in order to enhance their job 
opportunities. This program has been well-established as an alternative 
way for individuals to meet their long-range educational goals. Without 
this extension, an estimated 800,000 Americans would be required to pay 
taxes on the education expenses paid by employers who did not withhold 
for the 1995 tax year because they counted on Congress to extend this 
program. Companies have already reported a significant drop in program 
participation because employees would be unable to pay the anticipated 
additional taxes. Without this exclusion, education becomes too 
expensive for many and the future promise embodied by it often slips 
away.
  Not only will educational goals be defeated if these expired 
provisions are not extended, but programs that contribute to economic 
growth and long-term job creation will also be eliminated as research 
incentives dissipate. Many high-technology industries rely on the 
research and experimentation tax credit to make the development of new 
products economically feasible. Without this credit, they would be 
forced to either reduce the amount of their research or relocate to a 
country with research-friendly tax policies. In the end, the people of 
the United States would pay the price for our negligence in not 
extending this tax credit. They would be the ones without the high-
technology, high paying jobs. They would be the ones who would suffer 
from a research deficit. And they would be the ones who had to live in 
a country with a less than robust economy.
  As this extender package focuses on job creation for the high-
technology industries, it also creates incentives for businesses to 
hire high-risk employees through the work opportunities tax credit 
[WOTC]. This program helps remove individuals from the more costly 
government assistant programs and provides them with jobs that allow 
them to both learn and earn.

  Mr. President, some of my colleagues will correctly note that this 
bill includes no offset to pay for the lost revenue of extending these 
expired tax provisions. However, when these items were introduced as a 
small portion of the balanced budget of 1995, they were an important 
part of a complete package that placed this Nation on a path to fiscal 
responsibility. Thus, in the context of a complete balanced budget 
deal, the cost of these provisions are offset by the necessary spending 
cuts. This bill has been carved out of the larger piece of legislation 
because time constraints require that we must now focus attention on 
the immediacy of this issue. While all of the tax provisions in the 
Balanced Budget Act of 1995 are important and need to be addressed in 
comprehensive legislation, the items singled out in this bill are those 
that will have a direct impact on tax returns that are due this spring. 
As the sponsor of the balanced budget amendment, I certainly recognize 
the need to enact these provisions in a way that will not increase the 
deficit. And, I remain hopeful that Congress will pass an effective and 
responsible budget bill, including these and other vital tax 
provisions, that the President will sign. We look forward to working 
with Chairman Roth of the Finance Committee and Senator Domenici of the 
Budget Committee in crafting a revenue neutral package that would 
include these provisions.
  Mr. President, these programs are specifically designed to target 
individuals and businesses in a way that will produce benefits for the 
American economy. History has proven that high employment rates, 
educational opportunities, and intensive research are goals that we can 
agree on. It is important that we see this bill enacted in a timely 
matter so that our Nation will feel the effects of this legislation. 
Individuals and businesses alike have anticipated the renewal of these 
provisions. Congress has extended them in the past, and should have 
extended them in the 1995 budget agreement. Failure to do so now could 
have serious repercussions. I note that similar legislation will be 
introduced in the House by Representatives Nancy Johnson and Robert 
Matsui. I urge all of my colleagues to support this bill.
  I ask unanimous consent that the text of the bill and a summary of 
its provisions be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1568

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. WORK OPPORTUNITY TAX CREDIT.

       (a) Amount of Credit.--Subsection (a) of section 51 of the 
     Internal Revenue Code of 1986 (relating to amount of credit) 
     is amended by striking ``40 percent'' and inserting ``35 
     percent''.
       (b) Members of Targeted Groups.--Subsection (d) of section 
     51 of the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(d) Members of Targeted Groups.--For purposes of this 
     subpart--
       ``(1) In general.--An individual is a member of a targeted 
     group if such individual is--
       ``(A) a qualified IV-A recipient,
       ``(B) a qualified veteran,
       ``(C) a qualified ex-felon,
       ``(D) a high-risk youth,
       ``(E) a vocational rehabilitation referral,
       ``(F) a qualified summer youth employee, or
       ``(G) a qualified food stamp recipient.
       ``(2) Qualified iv-a recipient.--
       ``(A) In general.--The term `qualified IV-A recipient' 
     means any individual who is certified by the designated local 
     agency as being a member of a family receiving assistance 
     under a IV-A program for at least a 9-month period ending 
     during the 9-month period ending on the hiring date.
       ``(B) IV-A program.--For purposes of this paragraph, the 
     term `IV-A program' means any program providing assistance 
     under a State plan approved under part A of title IV of the 
     Social Security Act (relating to assistance for needy 
     families with minor children) and any successor of such 
     program.
       ``(3) Qualified veteran.--
       ``(A) In general.--The term `qualified veteran' means any 
     veteran who is certified by the designated local agency as 
     being--
       ``(i) a member of a family receiving assistance under a IV-
     A program (as defined in paragraph (2)(B)) for at least a 9-
     month period ending during the 12-month period ending on the 
     hiring date, or
       ``(ii) a member of a family receiving assistance under a 
     food stamp program under the Food Stamp Act of 1977 for at 
     least a 3-month period ending during the 12-month period 
     ending on the hiring date.
       ``(B) Veteran.--For purposes of subparagraph (A), the term 
     `veteran' means any individual who is certified by the 
     designated local agency as--
       ``(i)(I) having served on active duty (other than active 
     duty for training) in the Armed 

[[Page S1183]]
     Forces of the United States for a period of more than 180 days, or
       ``(II) having been discharged or released from active duty 
     in the Armed Forces of the United States for a service-
     connected disability, and
       ``(ii) not having any day during the 60-day period ending 
     on the hiring date which was a day of extended active duty in 
     the Armed Forces of the United States.
     For purposes of clause (ii), the term `extended active duty' 
     means a period of more than 90 days during which the 
     individual was on active duty (other than active duty for 
     training).
       ``(4) Qualified ex-felon.--The term `qualified ex-felon' 
     means any individual who is certified by the designated local 
     agency--
       ``(A) as having been convicted of a felony under any 
     statute of the United States or any State,
       ``(B) as having a hiring date which is not more than 1 year 
     after the last date on which such individual was so convicted 
     or was released from prison, and
       ``(C) as being a member of a family which had an income 
     during the 6 months immediately preceding the earlier of the 
     month in which such income determination occurs or the month 
     in which the hiring date occurs, which, on an annual basis, 
     would be 70 percent or less of the Bureau of Labor Statistics 
     lower living standard.
     Any determination under subparagraph (C) shall be valid for 
     the 45-day period beginning on the date such determination is 
     made.
       ``(5) High-risk youth.--
       ``(A) In general.--The term `high-risk youth' means any 
     individual who is certified by the designated local agency--
       ``(i) as having attained age 18 but not age 25 on the 
     hiring date, and
       ``(ii) as having his principal place of abode within an 
     empowerment zone or enterprise community.
       ``(B) Youth must continue to reside in zone.--In the case 
     of a high-risk youth, the term `qualified wages' shall not 
     include wages paid or incurred for services performed while 
     such youth's principal place of abode is outside an 
     empowerment zone or enterprise community.
       ``(6) Vocational rehabilitation referral.--The term 
     `vocational rehabilitation referral' means any individual who 
     is certified by the designated local agency as--
       ``(A) having a physical or mental disability which, for 
     such individual, constitutes or results in a substantial 
     handicap to employment, and
       ``(B) having been referred to the employer upon completion 
     of (or while receiving) rehabilitative services pursuant to--
       ``(i) an individualized written rehabilitation plan under a 
     State plan for vocational rehabilitation services approved 
     under the Rehabilitation Act of 1973, or
       ``(ii) a program of vocational rehabilitation carried out 
     under chapter 31 of title 38, United States Code.
       ``(7) Qualified summer youth employee.--
       ``(A) In general.--The term `qualified summer youth 
     employee' means any individual--
       ``(i) who performs services for the employer between May 1 
     and September 15,
       ``(ii) who is certified by the designated local agency as 
     having attained age 16 but not 18 on the hiring date (or if 
     later, on May 1 of the calendar year involved),
       ``(iii) who has not been an employee of the employer during 
     any period prior to the 90-day period described in 
     subparagraph (B)(i), and
       ``(iv) who is certified by the designated local agency as--

       ``(I) having his principal place of abode within an 
     empowerment zone or enterprise community, or
       ``(II) being a member of a family receiving assistance 
     under a food stamp program under the Food Stamp Act of 1977 
     for at least a 3-month period ending during the 12-month 
     period ending on the hiring date.

       ``(B) Special rules for determining amount of credit.--For 
     purposes of applying this subpart to wages paid or incurred 
     to any qualified summer youth employee--
       ``(i) subsection (b)(2) shall be applied by substituting 
     `any 90-day period between May 1 and September 15' for `the 
     1-year period beginning with the day the individual begins 
     work for the employer', and
       ``(ii) subsection (b)(3) shall be applied by substituting 
     `$3,000' for `$6,000'.
     The preceding sentence shall not apply to an individual who, 
     with respect to the same employer, is certified as a member 
     of another targeted group after such individual has been a 
     qualified summer youth employee.
       ``(C) Youth must continue to reside in zone.--Paragraph 
     (5)(B) shall apply for purposes of subparagraph (A)(iv)(I).
       ``(8) Qualified food stamp recipient.--
       ``(A) In general.--The term `qualified food stamp 
     recipient' means any individual who is certified by the 
     designated local agency--
       ``(i) as having attained age 18 but not age 25 on the 
     hiring date, and
       ``(ii) as being a member of a family receiving assistance 
     under a food stamp program under the Food Stamp Act of 1977 
     for at least a 3-month period ending during the 12-month 
     period ending on the hiring date.
       ``(9) Hiring date.--The term `hiring date' means the day 
     the individual is hired by the employer.
       ``(10) Designated local agency.--The term `designated local 
     agency' means a State employment security agency established 
     in accordance with the Act of June 6, 1933, as amended (29 
     U.S.C. 49-49n).
       ``(11) Special rules for certifications.--
       ``(A) In general.--An individual shall not be treated as a 
     member of a targeted group unless--
       ``(i) on or before the day on which such individual begins 
     work for the employer, the employer has received a 
     certification from a designated local agency that such 
     individual is a member of a targeted group, or
       ``(ii)(I) on or before the day the individual is offered 
     employment with the employer, a pre-screening notice is 
     completed by the employer with respect to such individual, 
     and
       ``(II) not later than the 14th day after the individual 
     begins work for the employer, the employer submits such 
     notice, signed by the employer and the individual under 
     penalties of perjury, to the designated local agency as part 
     of a written request for such a certification from such 
     agency.
     For purposes of this paragraph, the term `pre-screening 
     notice' means a document (in such form as the Secretary shall 
     prescribe) which contains information provided by the 
     individual on the basis of which the employer believes that 
     the individual is a member of a targeted group.
       ``(B) Incorrect certifications.--If--
       ``(i) an individual has been certified by a designated 
     local agency as a member of a targeted group, and
       ``(ii) such certification is incorrect because it was based 
     on false information provided by such individual,
     the certification shall be revoked and wages paid by the 
     employer after the date on which notice of revocation is 
     received by the employer shall not be treated as qualified 
     wages.
       ``(C) Explanation of denial of request.--If a designated 
     local agency denies a request for certification of membership 
     in a targeted group, such agency shall provide to the person 
     making such request a written explanation of the reasons for 
     such denial.''
       (c) Minimum Employment Period.--Paragraph (3) of section 
     51(i) of the Internal Revenue Code of 1986 (relating to 
     certain individuals ineligible) is amended to read as 
     follows:
       ``(3) Individuals not meeting minimum employment period.--
     No wages shall be taken into account under subsection (a) 
     with respect to any individual unless such individual 
     either--
       ``(A) is employed by the employer at least 180 days (20 
     days in the case of a qualified summer youth employee), or
       ``(B) has completed at least 250 hours (120 hours in the 
     case of a qualified summer youth employee) of services 
     performed for the employer.''
       (d) Termination.--Paragraph (4) of section 51(c) of the 
     Internal Revenue Code of 1986 (relating to wages defined) is 
     amended to read as follows:
       ``(4) Termination.--The term `wages' shall not include any 
     amount paid or incurred to an individual who begins work for 
     the employer--
       ``(A) after December 31, 1994, and before January 1, 1996, 
     or
       ``(B) after December 31, 1997.''
       (e) Redesignation of Credit.--
       (1) Sections 38(b)(2) and 51(a) of the Internal Revenue 
     Code of 1986 are each amended by striking ``targeted jobs 
     credit'' and inserting ``work opportunity credit''.
       (2) The subpart heading for subpart F of part IV of 
     subchapter A of chapter 1 of such Code is amended by striking 
     ``Targeted Jobs Credit'' and inserting ``Work Opportunity 
     Credit''.
       (3) The table of subparts for such part IV is amended by 
     striking ``targeted jobs credit'' and inserting ``work 
     opportunity credit''.
       (4) The heading for paragraph (3) of section 1396(c) of 
     such Code is amended by striking ``targeted jobs credit'' and 
     inserting ``work opportunity credit''.
       (f) Technical Amendments.--
       (1) Paragraph (1) of section 51(c) of the Internal Revenue 
     Code of 1986 is amended by striking ``, subsection 
     (d)(8)(D),''.
       (2) Paragraph (3) of section 51(i) of such Code is amended 
     by striking ``(d)(12)'' each place it appears and inserting 
     ``(d)(6)''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to individuals who begin work for the employer 
     after December 31, 1995.

     SEC. 2. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE PROGRAMS.

       (a) Extension.--Subsection (d) of section 127 of the 
     Internal Revenue Code of 1986 (relating to educational 
     assistance programs) is amended by striking ``December 31, 
     1994'' and inserting ``December 31, 1997''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.

     SEC. 3. RESEARCH CREDIT.

       (a) In General.--Subsection (h) of section 41 of the 
     Internal Revenue Code of 1986 (relating to credit for 
     research activities) is amended--
       (1) by striking ``June 30, 1995'' each place it appears and 
     inserting ``December 31, 1997'', and
       (2) by striking ``July 1, 1995'' each place it appears and 
     inserting ``January 1, 1998''.
       (b) Base Amount for Start-Up Companies.--Clause (i) of 
     section 41(c)(3)(B) of the Internal Revenue Code of 1986 
     (relating to start-up companies) is amended to read as 
     follows:
       ``(i)  Taxpayers to which subparagraph applies.--The fixed-
     base percentage shall be determined under this subparagraph 
     if--
     
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       ``(I) the first taxable year in which a taxpayer had both 
     gross receipts and qualified research expenses begins after 
     December 31, 1983, or
       ``(II) there are fewer than 3 taxable years beginning after 
     December 31, 1983, and before January 1, 1989, in which the 
     taxpayer had both gross receipts and qualified research 
     expenses.''.

       (c) Election of Alternative Incremental Credit.--Subsection 
     (c) of section 41 of the Internal Revenue Code of 1986 is 
     amended by redesignating paragraphs (4) and (5) as paragraphs 
     (5) and (6), respectively, and by inserting after paragraph 
     (3) the following new paragraph:
       ``(4) Election of alternative incremental credit.--
       ``(A) In general.--At the election of the taxpayer, the 
     credit determined under subsection (a)(1) shall be equal to 
     the sum of--
       ``(i) 1.65 percent of so much of the qualified research 
     expenses for the taxable year as exceeds 1 percent of the 
     average described in subsection (c)(1)(B) but does not exceed 
     1.5 percent of such average,
       ``(ii) 2.2 percent of so much of such expenses as exceeds 
     1.5 percent of such average but does not exceed 2 percent of 
     such average, and
       ``(iii) 2.75 percent of so much of such expenses as exceeds 
     2 percent of such average.
       ``(B) Election.--An election under this paragraph may be 
     made only for the first taxable year of the taxpayer 
     beginning after June 30, 1995. Such an election shall apply 
     to the taxable year for which made and all succeeding taxable 
     years unless revoked with the consent of the Secretary.''
       (d) Increased Credit for Contract Research Expenses With 
     Respect to Certain Research Consortia.--Paragraph (3) of 
     section 41(b) of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following new subparagraph:
       ``(C) Amounts paid to certain research consortia.--
       ``(i) In general.--Subparagraph (A) shall be applied by 
     substituting `75 percent' for `65 percent' with respect to 
     amounts paid or incurred by the taxpayer to a qualified 
     research consortium for qualified research.
       ``(ii) Qualified research consortium.--The term `qualified 
     research consortium' means any organization described in 
     subsection (e)(6)(B) if--

       ``(I) at least 15 unrelated taxpayers paid (during the 
     calendar year in which the taxable year of the taxpayer 
     begins) amounts to such organization for qualified research,
       ``(II) no 3 persons paid during such calendar year more 
     than 50 percent of the total amounts paid during such 
     calendar year for qualified research, and
       ``(III) no person contributed more than 20 percent of such 
     total amounts.

     For purposes of subclause (I), all persons treated as a 
     single employer under subsection (a) or (b) of section 52 
     shall be treated as related taxpayers.''
       (e)  Conforming Amendment.--Subparagraph (D) of section 
     28(b)(1) of the Internal Revenue Code of 1986 is amended by 
     striking ``June 30, 1995'' and inserting ``December 31, 
     1997''.
       (f) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     ending after June 30, 1995.
       (2) Subsections (c) and (d).--The amendments made by 
     subsections (c) and (d) shall apply to taxable years 
     beginning after June 30, 1995.

     SEC. 4. ORPHAN DRUG TAX CREDIT.

       (a) Recategorized as a Business Credit.--
       (1) In general.--Section 28 of the Internal Revenue Code of 
     1986 (relating to clinical testing expenses for certain drugs 
     for rare diseases or conditions) is transferred to subpart D 
     of part IV of subchapter A of chapter 1 of such Code, 
     inserted after section 45B, and redesignated as section 45C.
       (2) Conforming amendment.--Subsection (b) of section 38 of 
     such Code (relating to general business credit) is amended by 
     striking ``plus'' at the end of paragraph (10), by striking 
     the period at the end of paragraph (11) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(12) the orphan drug credit determined under section 
     45C(a).''.
       (3) Clerical amendments.--
       (A) The table of sections for subpart B of such part IV is 
     amended by striking the item relating to section 28.
       (B) The table of sections for subpart D of such part IV is 
     amended by adding at the end the following new item:

``Sec. 45C. Clinical testing expenses for certain drugs for rare 
              diseases or conditions.''.
       (b) Credit Termination.--Subsection (e) of section 45C of 
     the Internal Revenue Code of 1986, as redesignated by 
     subsection (a)(1), is amended by striking ``December 31, 
     1994'' and inserting ``December 31, 1997''.
       (c) No Pre-1995 Carrybacks.--Subsection (d) of section 39 
     of the Internal Revenue Code of 1986 (relating to carryback 
     and carryforward of unused credits) is amended by adding at 
     the end the following new paragraph:
       ``(7) No carryback of section 45c credit before 1995.--No 
     portion of the unused business credit for any taxable year 
     which is attributable to the orphan drug credit determined 
     under section 45C may be carried back to a taxable year 
     beginning before January 1, 1995.''.
       (d) Additional Conforming Amendments.--
       (1) Section 45C(a) of the Internal Revenue Code of 1986, as 
     redesignated by subsection (a)(1), is amended by striking 
     ``There shall be allowed as a credit against the tax imposed 
     by this chapter for the taxable year'' and inserting ``For 
     purposes of section 38, the credit determined under this 
     section for the taxable year is''.
       (2) Section 45C(d) of such Code, as so redesignated, is 
     amended by striking paragraph (2) and by redesignating 
     paragraphs (3), (4), and (5) as paragraphs (2), (3), and (4).
       (3) Section 29(b)(6)(A) of such Code is amended by striking 
     ``sections 27 and 28'' and inserting ``section 27''.
       (4) Section 30(b)(3)(A) of such Code is amended by striking 
     ``sections 27, 28, and 29'' and inserting ``sections 27 and 
     29''.
       (5) Section 53(d)(1)(B) of such Code is amended--
       (A) by striking ``or not allowed under section 28 solely by 
     reason of the application of section 28(d)(2)(B),'' in clause 
     (iii), and
       (B) by striking ``or not allowed under section 28 solely by 
     reason of the application of section 28(d)(2)(B)'' in clause 
     (iv)(II).
       (6) Section 55(c)(2) of such Code is amended by striking 
     ``28(d)(2),''.
       (7) Section 280C(b) of such Code is amended--
       (A) by striking ``section 28(b)'' in paragraph (1) and 
     inserting ``section 45C(b)'',
       (B) by striking ``section 28'' in paragraphs (1) and (2)(A) 
     and inserting ``section 45C(b)'', and
       (C) by striking ``subsection (d)(2) thereof'' in paragraphs 
     (1) and (2)(A) and inserting ``section 38(c)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 1994.

     SEC. 5. CONTRIBUTIONS OF STOCK TO PRIVATE FOUNDATIONS.

       (a) In General.--Subparagraph (D) of section 170(e)(5) of 
     the Internal Revenue Code of 1986 (relating to special rule 
     for contributions of stock for which market quotations are 
     readily available) is amended by striking ``December 31, 
     1994'' and inserting ``December 31, 1997''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 1994.

     SEC. 6. EXTENSION OF BINDING CONTRACT DATE FOR BIOMASS AND 
                   COAL FACILITIES.

       (a) In General.--Subparagraph (A) of section 29(g)(1) of 
     the Internal Revenue Code of 1986 (relating to extension of 
     certain facilities) is amended by striking ``January 1, 
     1997'' and inserting ``January 1, 1999'' and by striking 
     ``January 1, 1996'' and inserting ``July 1, 1997''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 7. EXTENSION OF TRANSITION RULE FOR CERTAIN PUBLICLY 
                   TRADED PARTNERSHIPS.

       (a) In General.--Subparagraph (B) of section 10211(c)(1) of 
     the Revenue Act of 1987 (Public Law 100-203) is amended by 
     striking ``December 31, 1997'' and inserting ``December 31, 
     1999''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the provisions of section 
     10211 of the Revenue Act of 1987.

     SEC. 8. EXTENSION OF GROUP LEGAL SERVICES.

       (a) Extension.--Subsection (e) of section 120 of the 
     Internal Revenue Code of 1986 (relating to amounts received 
     under qualified group legal services plans) is amended by 
     striking ``June 30, 1992'' and inserting ``December 31, 
     1997''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after June 30, 1992.
                                                                    ____


                    Provisions of the Extender Bill

       All the tax provisions in this legislation are extended 
     until 12/31/97 so that they will be protected through the 
     fundamental tax reform debate that is sure to ensue in this 
     election year.
       1. Work Opportunities Tax Credit [WOTC], formerly TJTC:
       This program is not as flexible as the original TJTC. 
     However, this bill expands it from the limited version that 
     was included in the Balanced Budget Act of 1995, as follows:
       The categories have been expanded to include qualified 
     summer youth who live with families dependent on food stamps 
     and 18-25 year olds who live with families dependent on food 
     stamps.
       The hour requirement for the minimum employment period was 
     reduced from the 500 hours included in the Balanced Budget 
     Act of 1995 to 250 hours.
       2. Employer-Provided Educational Assistance Program:
       This program remains the same as the version included in 
     the Balanced Budget Act, but this legislation does not limit 
     the provision to undergraduate education.
       3. Research and Experimentation Tax Credit:
       This bill extends the research and experimentation credit 
     as included in the Balanced Budget Act by incorporating an 
     Alternative Increment Research Credit as well as an 
     adjustment for start-up companies (the notch baby issue).
       4. Orphan Drug Tax Credit:
       This bill extends the research credit for rare diseases and 
     allows the carryforward or carryback of unused credit, as 
     included in the Balanced Budget Act of 1995. 
     
[[Page S1185]]

       5. Contributions of Stock to Private Foundation:
       Extends existing law to December 31, 1997.
       6. Extension of Binding Contract Date for the Section 29 
     Credit:
       Extends the placed-in-service date to January 1, 1999, and 
     the binding contract date to July 1, 1997.
       7. Publicly Traded Partnerships:
       Extends grandfathered PTPs as regular partnerships until 
     December 31, 1997.
       8. Group Legal Services:
       This bill extends the program included in the Senate 
     version of the Balanced Budget Act of 1995 until December 31, 
     1997.

 Mr. D'AMATO. Mr. President, I am very pleased to join my 
distinguished colleagues, Senators Hatch, Baucus, and Simpson, in 
introducing legislation to extend certain expiring tax provisions. Over 
the years, all of the provisions in this bill have received support 
from most Members of Congress. In the first session of this Congress, I 
joined Senator Hatch in cosponsoring legislation to extend the tax 
benefits on a number of these provisions. In addition, on June 29, 
1995, I introduced S. 997 to permanently reinstate the tax exclusion 
for employer-provided group legal services. I am very pleased that that 
provision has been included in this bill.
  Mr. President, this bill is an important and necessary piece of 
legislation. As such, I urge my colleagues to join us in the effort to 
extend these important benefits.

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