11th-Hour Victory For Tech
Visa increase, R&D tax measure in budget bill
Tom Abate, Jon Swartz, Chronicle Staff Writers
Friday, October 16, 1998
©2000 San Francisco Chronicle

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1998/10/16/BU82828.DTL


The high-tech industry was in high spirits yesterday after scoring a series of 11th-hour legislative victories -- just days after it looked like its political agenda might get shut out.

In an adroit political move, tech leaders got several of their stalled measures included in the $500 billion omnibus appropriations bill that was hammered out yesterday between Congress and the White House. Congress is expected to pass the bill today. The tech measures include:

-- A three-year increase in the number of foreign workers who can be hired under H-1B visas.

-- A three-year moratorium on new local and state Internet taxes.

-- A one-year extension of the research-and-development tax credit.

Together with tech-backed measures that recently passed Congress -- a bill banning securities litigation in state courts, a digital-copyright act and limits on lawsuits for Y2K flaws -- yesterday's action capped a remarkable, come-from-behind legislative windfall for Silicon Valley.

``It marks a coming of age for tech in wielding influence in the Beltway,'' said Jon Englund, a vice president at the Information Technology Association of America in Washington. ``This is a banner day for the industry that will translate into more jobs and a more competitive U.S. technology industry.''

But even last night, Senator Tom Harkin, D-Iowa, who nearly scuttled the H-1B bill with a parliamentary maneuver on Friday, hinted that he also might try to stall the budget bill because it includes the H-1B increase. It was unclear what the effect of his maneuver might be.

Throughout the week, a number of organizations, spearheaded by ITAA and the bipartisan lobbying group TechNet, have been working feverishly behind the scenes to repackage the tech bills.

Their efforts were aided by the fact that Republicans and Democrats put aside their bickering to ease passage of the tech bills, as both parties vie for the favor of an increasingly influential Silicon Valley lobby.

With the budget -- and the tech measures -- now apparently headed for President Clinton's expected signature, the bipartisan spirit was replaced by polite credit-taking.

During a conference call yesterday, TechNet leader Brook Byers attributed this ``remarkable achievement'' to the leadership of Vice President Al Gore. Byers also praised Senator Barbara Boxer, D-Calif., for doing some ``heavy lifting'' to get the H-1B bill included in the budget.

But TechNet's Republican spokeswoman, Lezlee Westine, pointed out that Boxer's challenger, Matt Fong, had lobbied U.S. senators to make sure the R&D tax credit was appended to the budget package.

The H-1B provision was the hardest fight. The controversial measure was opposed by labor groups who managed one delay after another right up until Friday, when a lone senator -- Harkin -- nearly killed the bill.

Mary Dee Beall, who lobbied for Hewlett-Packard on the H-1B issue, credited Senator Spencer Abraham, R-Mich., and Representative Lamar Smith, R-Texas, for reviving the bill.

``It wouldn't have gotten done at all if Abraham hadn't stayed behind it,'' Beall said. ``It wouldn't have the worker protections it does if Smith hadn't insisted.''

The budget bill also includes a requirement that Web sites get permission from parents before collecting information from children under 13.

But one tech-related measure buried in the budget bill already has drawn opposition. It is a provision on online pornography that would impose criminal penalties on commercial Web sites that allow anyone 17 or under to access pornographic material deemed ``harmful to minors.'' Violators would face up to $50,000 in fines and six months in jail.

A coalition of civil rights groups, fearful that the ``harmful to minors'' standard is vague and may chill freedom of expression, said yesterday that they would file a lawsuit as soon as next week to block the bill.

``I think it's likely we will challenge it in court and challenge it quickly,'' said Chris Hansen, senior staff counsel of the American Civil Liberties Union in New York.

Not every tech-related bill sailed through the House and Senate, however.

A ban on Internet gambling, an attempt to regulate unsolicited junk e-mail and legislation to eliminate government export controls on data-scrambling technology all were defeated.


HOW HIGH TECH FARED
What passed:

-- Y2K liability -- shields Year 2000 companies from lawsuits stemming from disclosed information.

-- Digital-copyright protection -- applies worldwide copyright standards to music, software and literary works on the Internet.

-- Securities Litigation Uniform Standards Act -- shields high-tech companies from frivolous securities litigation. What is expected to pass:

-- Omnibus Appropriations bill -- sweeping $500 billion package includes three-year ban on new local and state Internet taxes; raises cap on visas for foreign workers to 115,000 in 1999 and 2000 from 65,000; extends research-and-development tax credit until June 30, 1999; requires Web site operators to get permission before collecting information from children under 13; and bars commercial Web sites from posting pornographic material deemed ``harmful to minors'' ages 17 and under. What was defeated:

-- Encryption -- attempt to eliminate government export controls on data-scrambling technology.

-- Online gambling -- required Internet service providers to block user access to gambling sites.

-- Spam -- regulates unsolicited commercial e-mail.

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