I
105TH CONGRESS
2D SESSION
H. R. 4324
To amend the Communications Act of 1934 to reduce telephone rates, provide
advanced telecommunications services to schools, libraries, and certain
health care facilities, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 23, 1998
Mr. TAUZIN (for himself, Mr. WELLER, Mr. HULSHOF, Mr. COX of California,
Mr. ROGAN, Mr. SHIMKUS, Mr. SUNUNU, Mr. GOSS, Mr. WHITFIELD,
Mr. SMITH of Michigan, and Mr. LEWIS of Kentucky) introduced the fol-
lowing bill; which was referred to the Committee on Commerce, and in
addition to the Committee on Ways and Means, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Communications Act of 1934 to reduce tele-
phone rates, provide advanced telecommunications serv-
ices to schools, libraries, and certain health care facilities,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Schools and Libraries
Internet Access Act’’.
SEC. 2. REPEAL OF FEDERAL COMMUNICATIONS COMMIS-
SION AUTHORITY.
Section 254 of the Communications Act of 1934 (47
U.S.C. 254) is amended—
(1) in subsection (b)—
(A) by striking paragraph (6); and
(B) by redesignating paragraph (7) as
paragraph (6);
(2) in subsection (c)—
(A) in paragraph (1)(A), by striking ‘‘edu-
cation, public health, or’’; and
(B) by striking paragraph (3); and
(3) by striking subsection (h).
SEC. 3. REDUCTION OF EXCISE TAX ON TELEPHONE AND
OTHER COMMUNICATIONS SERVICES.
(a) PHASE-OUT OF TAX.—Section 4251(b)(2) of the
Internal Revenue Code of 1986 is amended to read as fol-
lows:
‘‘(2) APPLICABLE
PERCENTAGE.—The term
‘applicable percentage’ means—
‘‘(A) 3.0 percent with respect to amounts
paid pursuant to bills first rendered before Jan-
uary 1, 1999; and
‘‘(B) 1.0 percent with respect to amounts
paid pursuant to bills first rendered on or after
January 1, 1999, and before October 1, 2003.’’
(b) REPEAL OF TAX.—Subchapter B of chapter 33
of the Internal Revenue Code of 1986 is repealed effective
with respect to bills first rendered on or after October 1,
2003.
SEC. 
4. 
TELECOMMUNICATIONS 
TECHNOLOGY 
TRUST
FUND.
(a) IN GENERAL.—Chapter 98 of the Internal Reve-
nue Code of 1986 is amended by inserting after section
9510 the following:
‘‘SEC. 9511. TELECOMMUNICATIONS TECHNOLOGY TRUST
FUND.
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund
to be known as the ‘‘Telecommunications Technology
Trust Fund’’, consisting of such amounts as may be ap-
propriated or credited pursuant to this section or section
9602(b).
‘‘(b) TRANSFER TO TELECOMMUNICATIONS TECH-
NOLOGY TRUST FUND AMOUNTS EQUIVALENT TO CER-
TAIN TAXES.—There are hereby appropriated to the Tele-
communications Technology Trust Fund amounts equiva-
lent to 100 percent of the taxes received in the Treasury
after December 31, 1998, under section 4251 (relating to
tax on communications).
‘‘(c) EXPENDITURES FROM TELECOMMUNICATIONS
TECHNOLOGY TRUST FUND.—Amounts in the Tele-
communications Technology Trust Fund shall be available
for making expenditures to carry out the provisions of sec-
tion 106 of the National Telecommunications and Infor-
mation Administration Organization Act.
‘‘(d) SUNSET.—The provisions of this section shall
cease to be effective on October 1, 2003.’’.
SEC. 5. PROVISION OF TELECOMMUNICATIONS SERVICES
TO 
SCHOOLS, 
LIBRARIES, 
AND 
RURAL
HEALTH CARE PROVIDERS.
Part A of the National Telecommunications and In-
formation Administration Organization Act (47 U.S.C.
901 et seq.) is amended by adding at the end the following
new section:
‘‘SEC. 106. PROVISION OF ADVANCED TELECOMMUNI-
CATIONS SERVICES.
‘‘(a) PROVISION OF CERTAIN TELECOMMUNICATIONS
AND RELATED SERVICES.—
‘‘(1) GRANTS AUTHORIZED.—The Secretary (or
the Secretary’s designee) shall award a grant for a
fiscal year to each State having an approved plan
under paragraph (3) for the following purposes:
‘‘(A) To assist in acquiring telecommuni-
cations and related services which are necessary
for the provision of health care services, includ-
ing instruction relating to such telecommuni-
cations and related services, by any public or
nonprofit health care provider that serves per-
sons who reside in a rural area, as defined in
section 1886(d)(2)(D) of the Social Security
Act (42 U.S.C. 1395ww(d)(2)(D)).
‘‘(B) To assist in acquiring telecommuni-
cations and related services for elementary
schools, secondary schools, and libraries for
educational purposes.
‘‘(2) ALLOCATION OF FUNDS.—From amounts
appropriated pursuant to subsection (b), the Sec-
retary shall allocate to each of the 50 States, the
District of Columbia, and the Commonwealth of
Puerto Rico as follows, except that no State shall re-
ceive less than 1⁄2 of 1 percent of such amount:
‘‘(A) Fifty percent shall be allocated
among such jurisdictions on the basis of their
relative populations of individuals aged five
through 17, as determined by the Secretary on
the basis of the most recent satisfactory data.
‘‘(B) Fifty percent shall be allocated
among such jurisdictions in accordance with the
relative amounts such jurisdictions received
under part A of title I of the Elementary and
Secondary Education Act of 1965 for the pre-
ceding fiscal year.
‘‘(3) STATE PLANS.—In order for a State to re-
ceive a grant or an allocation of funds under this
part for any fiscal year, such State shall have in ef-
fect for such fiscal year a State plan. Such plan
shall—
‘‘(A) designate the State educational agen-
cy (as such term is defined in section 14101 of
the Elementary and Secondary Education Act
of 1965) as the State agency responsible for the
administration of the program assisted under
this part;
‘‘(B) set forth a program under which
funds paid to the State in accordance with this
section will be expended solely for—
‘‘(i) acquiring certain telecommuni-
cations and related services under sub-
section (a); and
‘‘(ii) administration of the State plan,
except that the amount used for adminis-
tration of the State plan in any fiscal year
shall not exceed 2 percent of the amount
available to such State under this section
for such fiscal year;
‘‘(C) set forth criteria to be used in allot-
ting funds among the eligible entities in the
State, taking into consideration the relative eco-
nomic need of the eligible entities, including the
number of students or other persons who are—
‘‘(i) living in areas with high con-
centrations of low-income families;
‘‘(ii) from or part of a low-income
family; and
‘‘(iii) living in sparsely populated
areas; and
‘‘(D) contain assurance that funds paid to
the State in accordance with this section will be
expended in accordance with the regulations
prescribed by the Secretary under paragraph
(5).
‘‘(4) TERMS AND CONDITIONS.—Telecommuni-
cations and related services and network capacity
provided to a school, library, or health care provider
under this section may not be sold, resold, or other-
wise transferred by such user in consideration for
money or any other thing of value.
‘‘(5) RULEMAKING AUTHORITY.—The Secretary
(or the Secretary’s designee) shall prescribe such
regulations as may be necessary to establish quali-
fications and conditions to carry out the provisions
of this section. Such regulations shall include cri-
teria by which States shall determine, in the case of
any acquisition of telecommunications and related
services for elementary schools, secondary schools,
and libraries for educational purposes that includes
the installation of equipment within any such school
or library, whether the installation is essential to
permit such school or library to have access to ad-
vanced technologies.
‘‘(6) DEFINITIONS.—For purposes of this sec-
tion:
‘‘(A) 
ELEMENTARY
AND
SECONDARY
SCHOOLS.—The terms ‘elementary schools’ and
‘secondary schools’ have the same meanings
given those terms in paragraphs (14) and (25),
respectively, of section 14101 of the Elementary
and Secondary Education Act of 1965.
‘‘(B) HEALTH CARE PROVIDER.—The term
‘health care provider’ includes—
‘‘(i) post-secondary educational insti-
tutions offering health care instructions,
teaching hospitals, and medical schools;
‘‘(ii) community health centers or
health centers providing health care to mi-
grants;
‘‘(iii) local health departments or
agencies;
‘‘(iv) community mental health cen-
ters;
‘‘(v) not-for-profit hospitals;
‘‘(vi) rural health clinics; and
‘‘(vii) consortia of health care provid-
ers consisting of 1 or more of the above
described entities.
‘‘(C) ELIGIBLE ENTITIES.—Notwithstand-
ing subparagraph (A) or (B), no entity shall be
entitled to receive grants authorized under this
section if such entity operates as other than a
not-for-profit business, is a school described in
subparagraph (A) with an endowment of more
than $50,000,000, or is a library or library con-
sortium not eligible for assistance from a State
library administrative agency under the Library
Services and Technology Act.
‘‘(b) EXPENDITURE AUTHORITY.—
‘‘(1) APPROPRIATIONS FROM TRUST FUND.—
‘‘(A) AUTHORIZATION.—Subject to sub-
paragraphs (B) and (C), there are authorized to
be appropriated from the Telecommunications
Technology Trust Fund, established pursuant
to section 9511 of the Internal Revenue Code of
1986, such funds as may be necessary for each
of the fiscal years 1999 through 2003 to
fund—
‘‘(i) the grants authorized by section
(a)(1); and
‘‘(ii) such expenditures as may be nec-
essary to administer the programs estab-
lished by this section.
‘‘(B) LIMITATION
BASED
ON
COLLEC-
TIONS.—No amount may be appropriated pur-
suant to subparagraph (A) for a fiscal year for
grants pursuant to section (a)(1) that in the
aggregate exceed 100 percent of the trust fund
receipts credited to the Telecommunications
Technology Trust Fund with respect to the pre-
ceding fiscal year.
‘‘(C) FISCAL YEAR 1999 LIMITATION.—The
amount appropriated under subparagraph (A)
for 
fiscal 
year 
1999 
shall 
not 
exceed
$1,700,000,000.
‘‘(D) UNEXPENDED BALANCES.—Any bal-
ances in the Telecommunications Technology
Trust Fund after deduction of the amount ap-
propriated under subparagraph (A) for any fis-
cal year are authorized to be transferred to and
deposited in the general fund of the Treasury,
to the extent so provided in an appropriations
Act.
‘‘(2) APPROPRIATIONS AFTER EXPIRATION OF
TAX RECEIPTS.—For fiscal year 2004 and each of
the succeeding fiscal years, there are authorized to
be appropriated, from funds in the Treasury not
otherwise appropriated, not to exceed $500,000,000
to fund—
‘‘(A) the grants authorized by section
(a)(1); and
‘‘(B) such expenditures as may be nec-
essary to administer the programs established
by this section.’’.
SEC. 6. EFFECTIVE DATES.
(a) DELAYED DATE.—The amendments made by sec-
tions 2 and 5 of this Act shall be effective 180 days after
the date of enactment of this Act.
(b) IMMEDIATE EFFECT.—The amendments made by
sections 3 and 4 of this Act shall be effective on the date
of enactment of this Act.
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