In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

Input: Consider Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Orphan Works Act of 2006''.

SEC. 2. LIMITATION ON REMEDIES IN CASES INVOLVING ORPHAN WORKS.

    (a) Limitation on Remedies.--Chapter 5 of title 17, United States 
Code, is amended by adding at the end the following new section:
``Sec. 514. Limitation on remedies in cases involving orphan works
    ``(a) Limitation on Remedies.--
            ``(1) Conditions.--Notwithstanding sections 502 through 
        505, in an action brought under this title for infringement of 
        copyright in a work, the remedies for infringement shall be 
        limited under subsection (b) if the infringer sustains the 
        burden of proving, and the court finds, that--
                    ``(A) before the infringing use of the work began, 
                the infringer, a person acting on behalf of the 
                infringer, or any person jointly and severally liable 
                with the infringer for the infringement of the work--
                            ``(i) performed and documented a reasonably 
                        diligent search in good faith to locate the 
                        owner of the infringed copyright; but
                            ``(ii) was unable to locate the owner; and
                    ``(B) the infringing use of the work provided 
                attribution, in a manner reasonable under the 
                circumstances, to the author and owner of the 
                copyright, if known with a reasonable degree of 
                certainty based on information obtained in performing 
                the reasonably diligent search.
            ``(2) Definitions; requirements for searches.--
                    ``(A) Owner of infringed copyright.--For purposes 
                of paragraph (1), the `owner' of an infringed copyright 
                in a work is the legal or beneficial owner of, or any 
                party with authority to grant or license, an exclusive 
                right under section 106 applicable to the infringement.
                    ``(B) Requirements for reasonably diligent 
                search.--(i) For purposes of paragraph (1), a search to 
                locate the owner of an infringed copyright in a work--
                            ``(I) is `reasonably diligent' only if it 
                        includes steps that are reasonable under the 
                        circumstances to locate that owner in order to 
                        obtain permission for the use of the work; and
                            ``(II) is not `reasonably diligent' solely 
                        by reference to the lack of identifying 
                        information with respect to the copyright on 
                        the copy or phonorecord of the work.
                    ``(ii) The steps referred to in clause (i)(I) shall 
                ordinarily include, at a minimum, review of the 
                information maintained by the Register of Copyrights 
                under subparagraph (C).
                    ``(iii) A reasonably diligent search includes the 
                use of reasonably available expert assistance and 
                reasonably available technology, which may include, if 
                reasonable under the circumstances, resources for which 
                a charge or subscription fee is imposed.
                    ``(C) Information to guide searches.--The Register 
                of Copyrights shall receive, maintain, and make 
                available to the public, including through the 
                Internet, information from authoritative sources, such 
                as industry guidelines, statements of best practices, 
                and other relevant documents, that is designed to 
                assist users in conducting and documenting a reasonably 
                diligent search under this subsection. Such information 
                may include--
                            ``(i) the records of the Copyright Office 
                        that are relevant to identifying and locating 
                        copyright owners;
                            ``(ii) other sources of copyright ownership 
                        information reasonably available to users;
                            ``(iii) methods to identify copyright 
                        ownership information associated with a work;
                            ``(iv) sources of reasonably available 
                        technology tools and reasonably available 
                        expert assistance; and
                            ``(v) best practices for documenting a 
                        reasonably diligent search.
    ``(b) Limitations on Remedies.--The limitations on remedies in a 
case to which subsection (a) applies are the following:
            ``(1) Monetary relief.--
                    ``(A) General rule.--Subject to subparagraph (B), 
                an award for monetary relief (including actual damages, 
                statutory damages, costs, and attorney's fees) may not 
                be made, other than an order requiring the infringer to 
                pay reasonable compensation for the use of the 
                infringed work.
                    ``(B) Exceptions.--(i) An order requiring the 
                infringer to pay reasonable compensation for the use of 
                the infringed work may not be made under subparagraph 
                (A) if--
                            ``(I) the infringement is performed without 
                        any purpose of direct or indirect commercial 
                        advantage and primarily for a charitable, 
                        religious, scholarly, or educational purpose, 
                        and
                            ``(II) the infringer ceases the 
                        infringement expeditiously after receiving 
                        notice of the claim for infringement,
                unless the copyright owner proves, and the court finds, 
                that the infringer has earned proceeds directly 
                attributable to the infringement.
                    ``(ii) If the infringer fails to negotiate in good 
                faith with the owner of the infringed work regarding 
                the amount of reasonable compensation for the use of 
                the infringed work, the court may award full costs, 
                including a reasonable attorney's fee, against the 
                infringer under section 505, subject to section 412.
            ``(2) Injunctive relief.--
                    ``(A) General rule.--Subject to subparagraph (B), 
                the court may impose injunctive relief to prevent or 
                restrain the infringing use, except that, if the 
                infringer has met the requirements of subsection (a), 
                the relief shall, to the extent practicable, account 
                for any harm that the relief would cause the infringer 
                due to its reliance on having performed a reasonably 
                diligent search under subsection (a).
                    ``(B) Special rule for new works.--In a case in 
                which the infringer recasts, transforms, adapts, or 
                integrates the infringed work with the infringer's 
                original expression in a new work of authorship, the 
                court may not, in granting injunctive relief, restrain 
                the infringer's continued preparation or use of that 
                new work, if the infringer--
                            ``(i) pays reasonable compensation to the 
                        owner of the infringed copyright for the use of 
                        the infringed work; and
                            ``(ii) provides attribution to the owner of 
                        the infringed copyright in a manner that the 
                        court determines is reasonable under the 
                        circumstances.
                    ``(C) Treatment of parties not subject to suit.--
                The limitations on remedies under this paragraph shall 
                not be available to an infringer that asserts in an 
                action under section 501(b) that neither it nor its 
                representative acting in an official capacity is 
                subject to suit in Federal court for an award of 
                damages to the copyright owner under section 504, 
                unless the court finds that such infringer has-- 
                            ``(i) complied with the requirements of 
                        subsection (a) of this section;
                            ``(ii) made a good faith offer of 
                        compensation that was rejected by the copyright 
                        owner; and
                            ``(iii) affirmed in writing its willingness 
                        to pay such compensation to the copyright owner 
                        upon the determination by the court that such 
                        compensation was reasonable under paragraph (3) 
                        of this subsection.
                    ``(D) Construction.--Nothing in subparagraph (C) 
                shall be deemed to authorize or require, and no action 
                taken pursuant to subparagraph (C) shall be deemed to 
                constitute, an award of damages by the court against 
                the infringer.
                    ``(E) Rights and privileges not waived.--No action 
                taken by an infringer pursuant to subparagraph (C) 
                shall be deemed to waive any right or privilege that, 
                as a matter of law, protects such infringer from being 
                subject to suit in Federal court for an award of 
                damages to the copyright owner under section 504.
            ``(3) Reasonable compensation.--In establishing reasonable 
        compensation under paragraph (1) or (2), the owner of the 
        infringed copyright has the burden of establishing the amount 
        on which a reasonable willing buyer and a reasonable willing 
        seller in the positions of the owner and the infringer would 
        have agreed with respect to the infringing use of the work 
        immediately before the infringement began.
    ``(c) Preservation of Other Rights, Limitations, and Defense.--This 
section does not affect any right, limitation, or defense to copyright 
infringement, including fair use, under this title. If another 
provision of this title provides for a statutory license when the 
copyright owner cannot be located, that provision applies in lieu of 
this section.
    ``(d) Copyright for Derivative Works.--Notwithstanding section 
103(a), the infringing use of a work in accordance with this section 
shall not limit or affect the copyright protection for a work that uses 
the infringed work.''.
    (b) Conforming Amendment.--The table of sections for chapter 5 of 
title 17, United States Code, is amended by adding at the end the 
following new item:

``514. Limitation on remedies in cases involving orphan works''.
    (c) Effective Date.--The amendments made by this section shall 
apply only to infringing uses that commence on or after June 1, 2008.

SEC. 3. REPORT TO CONGRESS ON AMENDMENTS.

    The Register of Copyrights shall, not later than December 12, 2014, 
report to the Committee on the Judiciary of the House of 
Representatives and the Committee on the Judiciary of the Senate on the 
implementation and effects of the amendments made by section 2, 
including any recommendations for legislative changes that the Register 
considers appropriate.

SEC. 4. INQUIRY ON REMEDIES FOR SMALL COPYRIGHT CLAIMS.

    (a) In General.--The Register of Copyrights shall conduct an 
inquiry with respect to remedies for copyright infringement claims 
seeking limited amounts of monetary relief, including consideration of 
alternatives to disputes currently heard in the United States district 
courts. The inquiry shall cover infringement claims to which section 
514 of title 17, United States Code (as added by section 2 of this 
Act), apply, and other infringement claims under title 17, United 
States Code.
    (b) Procedures.--The Register of Copyrights shall publish notice of 
the inquiry under subsection (a), providing a period during which 
interested persons may submit comments on the inquiry, and an 
opportunity for interested persons to participate in public roundtables 
on the inquiry. The Register shall hold the public roundtables at such 
times as the Register considers appropriate.
    (c) Report to Congress.--The Register of Copyrights shall, not 
later than 1 year after the date of the enactment of this Act, prepare 
and submit to the Committee on the Judiciary of the House of 
Representatives and the Committee on the Judiciary of the Senate a 
report on the inquiry conducted under this section, including such 
recommendations that the Register considers appropriate.

Output: Orphan Works Act of 2006 - Limits the remedies available in a copyright infringement action if the infringer proves that: (1) the infringer performed and documented a reasonably diligent search in good faith to locate the copyright owner before using the work, but was unable to locate the owner; and (2) the infringing use of the work provided attribution to the author and owner of the copyright, if known.

Requires the Register of Copyrights to make information available from authoritative sources to assist users in conducting and documenting a reasonably diligent search.

Permits an award of reasonable compensation for the use of the infringed work, except if: (1) the infringement is performed without any commercial advantage and for primarily a charitable, religious, scholarly, or educational purpose; and (2) the infringer ceases the infringement expeditiously after receiving notice of the claim for infringement.

Allows the court to impose injunctive relief to prevent or restrain the infringing use, but such relief shall account for harm caused to the infringer due to reliance on having performed a reasonably diligent search. Prohibits the court from imposing injunctive relief that restrains the continued preparation or use of a new work that recasts, transforms, adapts, or integrates the infringed work with the infringer's original expression in a new work of authorship if the infringer pays reasonable compensation and provides attribution to the copyright owner.

Requires the Register of Copyrights to conduct an inquiry with respect to remedies for copyright infringement claims seeking limited amounts of monetary relief, including consideration of alternatives to disputes currently heard in the U.S. district courts.


Input: Consider Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Cyber-Security Enhancement and 
Consumer Data Protection Act of 2006''.

SEC. 2. PERSONAL ELECTRONIC RECORDS.

    Section 1030(a)(2) of title 18, United States Code, is amended--
            (1) by striking ``or'' at the end of subparagraph (B); and
            (2) by adding at the end the following:
                    ``(D) a means of identification (as defined in 
                section 1028(d)) from a protected computer; or
                    ``(E) the capability to gain access to or remotely 
                control a protected computer.''.

SEC. 3. USE OF FULL INTERSTATE AND FOREIGN COMMERCE POWER FOR CRIMINAL 
              PENALTIES.

    (a) Broadening of Scope.--Section 1030(e)(2)(B) of title 18, United 
States Code, is amended by inserting ``or affecting'' after ``which is 
used in''.
    (b) Elimination of Requirement of an Interstate or Foreign 
Communication for Certain Offenses Involving Protected Computers.--
Section 1030(a)(2)(C) of title 18, United States Code, is amended by 
striking ``if the conduct involved an interstate or foreign 
communication''.

SEC. 4. RICO PREDICATES.

    Section 1961(1)(B) of title 18, United States Code, is amended by 
inserting ``section 1030 (relating to fraud and related activity in 
connection with computers),'' before ``section 1084''.

SEC. 5. CYBER-EXTORTION.

    Section 1030(a)(7) of title 18, United States Code, is amended by 
inserting ``, or to access without authorization or exceed authorized 
access to a protected computer'' after ``cause damage to a protected 
computer''.

SEC. 6. CONSPIRACY TO COMMIT CYBER-CRIMES.

    Section 1030(b) of title 18, United States Code, is amended by 
inserting ``or conspires'' after ``attempts''.

SEC. 7. NOTICE TO LAW ENFORCEMENT.

    (a) Criminal Penalty for Failure to Notify Law Enforcement.--
Chapter 47 of title 18, United States Code, is amended by adding at the 
end the following:
``Sec. 1039. Concealment of security breaches involving personal 
              information
    ``(a) Offense.--Whoever owns or possesses data in electronic form 
containing a means of identification (as defined in section 1028), 
having knowledge of a major security breach of the system containing 
such data maintained by such person, and knowingly fails to provide 
notice of such breach to the United States Secret Service or Federal 
Bureau of Investigation, with the intent to prevent, obstruct, or 
impede a lawful investigation of such breach, shall be fined under this 
title, imprisoned not more than 5 years, or both.
    ``(b) Definitions.--As used in this section--
            ``(1) Major security breach.--The term `major security 
        breach' means any security breach--
                    ``(A) whereby means of identification pertaining to 
                10,000 or more individuals is, or is reasonably 
                believed to have been acquired, and such acquisition 
                causes a significant risk of identity theft;
                    ``(B) involving databases owned by the Federal 
                Government; or
                    ``(C) involving primarily data in electronic form 
                containing means of identification of Federal 
                Government employees or contractors involved in 
                national security matters or law enforcement.
            ``(2) Significant risk of identity theft.--
                    ``(A) In general.--The term `significant risk of 
                identity theft' means such risk that a reasonable 
                person would conclude, after a reasonable opportunity 
                to investigate, that it is more probable than not that 
                identity theft has occurred or will occur as a result 
                of the breach.
                    ``(B) Presumption.--If the data in electronic form 
                containing a means of identification involved in a 
                suspected breach has been encrypted, redacted, requires 
                technology to use or access the data that is not 
                commercially available, or has otherwise been rendered 
                unusable, then there shall be a presumption that the 
                breach has not caused a significant risk of identity 
                theft. Such presumption may be rebutted by facts 
                demonstrating that the encryption code has been or is 
                reasonably likely to be compromised, that the entity 
                that acquired the data is believed to possess the 
                technology to access it, or the owner or possessor of 
                the data is or reasonably should be aware of an unusual 
                pattern of misuse of the data that indicates fraud or 
                identity theft.''.
    (b) Rulemaking.--Within 180 days after the date of enactment of 
this Act, the Attorney General and Secretary of Homeland Security shall 
jointly promulgate rules and regulations, after adequate notice and an 
opportunity for comment, as are reasonably necessary, governing the 
form, content, and timing of the notices required pursuant to section 
1039 of title 18, United States Code. Such rules and regulations shall 
not require the deployment or use of specific products or technologies, 
including any specific computer hardware or software, to protect 
against a security breach. Such rules and regulations shall require 
that--
            (1) such notice be provided to the United States Secret 
        Service or Federal Bureau of Investigation before any notice of 
        a breach is made to consumers under State or Federal law, and 
        within 14 days of discovery of the breach;
            (2) if the United States Secret Service or Federal Bureau 
        of Investigation determines that any notice required to be made 
        to consumers under State or Federal law would impede or 
        compromise a criminal investigation or national security, the 
        United States Secret Service or Federal Bureau of Investigation 
        shall direct in writing within 7 days that such notice shall be 
        delayed for 30 days, or until the United States Secret Service 
        or Federal Bureau of Investigation determines that such notice 
        will not impede or compromise a criminal investigation or 
        national security;
            (3) the United States Secret Service shall notify the 
        Federal Bureau of Investigation, if the United States Secret 
        Service determines that such breach may involve espionage, 
        foreign counterintelligence, information protected against 
        unauthorized disclosure for reasons of national defense or 
        foreign relations, or Restricted Data (as that term is defined 
        in section 11y of the Atomic Energy Act of 1954 (42 U.S.C. 
        2014(y))), except for offenses affecting the duties of the 
        United States Secret Service under section 3056(a) of title 18, 
        United States Code; and
            (4) the United States Secret Service or Federal Bureau of 
        Investigation notify the Attorney General in each State 
        affected by the breach, if the United States Secret Service or 
        Federal Bureau of Investigation declines to pursue a criminal 
        investigation, or as deemed necessary and appropriate.
    (c) Immunity From Lawsuit.--No cause of action shall lie in any 
court against any law enforcement entity or any person who notifies law 
enforcement of a security breach pursuant to this section for any 
penalty, prohibition, or damages relating to the delay of notification 
for law enforcement purposes under this Act.
    (d) Civil Penalty for Failure to Notify.--Whoever knowingly fails 
to give a notice required under section 1039 of title 18, United States 
Code, shall be subject to a civil penalty of not more than $50,000 for 
each day of such failure, but not more than $1,000,000.
    (e) Relation to State Laws.--
            (1) In general.--The requirement to notify law enforcement 
        under this section shall supersede any other notice to law 
        enforcement required under State law.
            (2) Exception for state consumer notice laws.--The notice 
        required to law enforcement under this section shall be in 
        addition to any notice to consumers required under State or 
        Federal law following the discovery of a security breach. 
        Nothing in this section annuls, alters, affects or exempts any 
        person from complying with the laws of any State with respect 
        to notice to consumers of a security breach, except as provided 
        by subsections (b) and (c).
    (f) Duty of Federal Agencies and Departments.--An agency or 
department of the Federal Government which would be required to give 
notice of a major security breach under section 1039 of title 18, 
United States Code, if that agency or department were a person, shall 
notify the United States Secret Service or Federal Bureau of 
Investigation of the breach in the same time and manner as a person 
subject to that section. The rulemaking authority under subsection (b) 
shall include the authority to make rules for notice under this 
subsection of a major security breach.
    (g) Clerical Amendment.--The table of sections at the beginning of 
chapter 47 of title 18, United States Code, is amended by adding at the 
end the following new item:

``1039. Concealment of security breaches involving personal 
                            information.''.

SEC. 8. PENALTIES FOR SECTION 1030 VIOLATIONS.

    Subsection (c) of section 1030 of title 18, United States Code, is 
amended to read as follows:
    ``(c)(1) The punishment for an offense under subsection (a) or (b) 
is a fine under this title or imprisonment for not more than 30 years, 
or both.
    ``(2) The court, in imposing sentence for an offense under 
subsection (a) or (b), shall, in addition to any other sentence imposed 
and irrespective of any provision of State law, order that the person 
forfeit to the United States--
            ``(A) the person's interest in any personal property that 
        was used or intended to be used to commit or to facilitate the 
        commission of such violation; and
            ``(B) any property, real or personal, constituting or 
        derived from, any proceeds the person obtained, directly or 
        indirectly, as a result of such violation.''.

SEC. 9. DIRECTIVE TO SENTENCING COMMISSION.

    (a) Directive.--Pursuant to its authority under section 994(p) of 
title 28, United States Code, and in accordance with this section, the 
United States Sentencing Commission shall forthwith review its 
guidelines and policy statements applicable to persons convicted of 
offenses under sections 1028, 1028A, 1030, 1030A, 2511 and 2701 of 
title 18, United States Code and any other relevant provisions of law, 
in order to reflect the intent of Congress that such penalties be 
increased in comparison to those currently provided by such guidelines 
and policy statements.
    (b) Requirements.--In determining its guidelines and policy 
statements on the appropriate sentence for the crimes enumerated in 
paragraph (a), the Commission shall consider the extent to which the 
guidelines and policy statements may or may not account for the 
following factors in order to create an effective deterrent to computer 
crime and the theft or misuse of personally identifiable data--
            (1) the level of sophistication and planning involved in 
        such offense;
            (2) whether such offense was committed for purpose of 
        commercial advantage or private financial benefit;
            (3) the potential and actual loss resulting from the 
        offense;
            (4) whether the defendant acted with intent to cause either 
        physical or property harm in committing the offense;
            (5) the extent to which the offense violated the privacy 
        rights of individuals;
            (6) the effect of the offense upon the operations of a 
        government agency of the United States, or of a State or local 
        government;
            (7) whether the offense involved a computer used by the 
        government in furtherance of national defense, national 
        security or the administration of justice;
            (8) whether the offense was intended to, or had the effect 
        of significantly interfering with or disrupting a critical 
        infrastructure;
            (9) whether the offense was intended to, or had the effect 
        of creating a threat to public health or safety, injury to any 
        person, or death; and
            (10) whether the defendant purposefully involved a juvenile 
        in the commission of the offense to avoid punishment.
    (c) Additional Requirements.--In carrying out this section, the 
Commission shall--
            (1) assure reasonable consistency with other relevant 
        directives and with other sentencing guidelines;
            (2) account for any additional aggravating or mitigating 
        circumstances that might justify exceptions to the generally 
        applicable sentencing ranges;
            (3) make any conforming changes to the sentencing 
        guidelines; and
            (4) assure that the guidelines adequately meet the purposes 
        of sentencing as set forth in section 3553(a)(2) of title 18, 
        United States Code.

SEC. 10. DAMAGE TO PROTECTED COMPUTERS.

    (a) Section 1030(a)(5)(B) of title 18, United States Code, is 
amended--
            (1) by striking ``or'' at the end of clause (iv);
            (2) by inserting ``or'' at the end of clause (v); and
            (3) by adding at the end the following:
                            ``(vi) damage affecting ten or more 
                        protected computers during any 1-year 
                        period.''.
    (b) Section 1030(g) of title 18, United States Code, is amended by 
striking ``or'' after ``(iv),'' and inserting ``, or (vi)'' after 
``(v)''.
    (c) Section 2332b(g)(5)(B)(i) of title 18, United States Code, is 
amended by striking ``(v) (relating to protection of computers)'' and 
inserting ``(vi) (relating to the protection of computers)''.

SEC. 11. ADDITIONAL FUNDING FOR RESOURCES TO INVESTIGATE AND PROSECUTE 
              CRIMINAL ACTIVITY INVOLVING COMPUTERS.

    (a) Additional Funding for Resources.--
            (1) Authorization.--In addition to amounts otherwise 
        authorized for resources to investigate and prosecute criminal 
        activity involving computers, there are authorized to be 
        appropriated for each of the fiscal years 2007 through 2011--
                    (A) $10,000,000 to the Director of the United 
                States Secret Service;
                    (B) $10,000,000 to the Attorney General for the 
                Criminal Division of the Department of Justice; and
                    (C) $10,000,000 to the Director of the Federal 
                Bureau of Investigation.
            (2) Availability.--Any amounts appropriated under paragraph 
        (1) shall remain available until expended.
    (b) Use of Additional Funding.--Funds made available under 
subsection (a) shall be used by the Director of the United States 
Secret Service, the Director of the Federal Bureau of Investigation, 
and the Attorney General, for the United States Secret Service, the 
Federal Bureau of Investigation, and the criminal division of the 
Department of Justice, respectively, to--
            (1) hire and train law enforcement officers to--
                    (A) investigate crimes committed through the use of 
                computers and other information technology, including 
                through the use of the Internet; and
                    (B) assist in the prosecution of such crimes; and
            (2) procure advanced tools of forensic science to 
        investigate, prosecute, and study such crimes.

Output: Cyber-Security Enhancement and Consumer Data Protection Act of 2006 - (Sec. 2) Amends the federal criminal code to prohibit obtaining without authorization: (1) a means of identification from a protected computer (a computer exclusively for the use of a financial institution or the federal government); or (2) the capability to gain access to or remotely control a protected computer.

(Sec. 3) Revises the definition of "protected computer" to include a computer the use of which affects interstate or foreign commerce or communication. Eliminates the criminal law requirement that conduct constituting computer fraud involve an interstate or foreign communication.

(Sec. 4) Includes computer fraud within the definition of racketeering for purposes of the Racketeer Influenced and Corrupt Organizations Act (RICO).

(Sec. 5) Includes threats to access a protected computer without authorization or to exceed such authorized access within the definition of computer-related extortion.

(Sec. 6) Expands the crime of computer fraud to include conspiracy to commit computer fraud.

(Sec. 7) Imposes a fine and/or prison term of up to five years for failure to notify the U.S. Secret Service or Federal Bureau of Investigation (FBI) of a major security breach in a database containing identification information with the intent to prevent, obstruct, or impede a lawful investigation of such breach. Defines "major security breach" as any security breach that involves: (1) the acquisition of the identification information of 10,000 or more individuals causing a significant risk of identity theft; (2) databases owned by the federal government; and (3) data containing identification information of federal employees or contractors involved in national security matters or law enforcement.

Directs the Attorney General and the Secretary of Homeland Security to jointly issue regulations on the form, content, and timing of notices of major security breaches. Requires that such regulations provide that notice of a security breach be provided to the Secret Service or FBI before notice is provided to consumers and within 14 days after discovery of such breach.

Grants immunity to law enforcement entities or to any person who notifies law enforcement of a security breach.

Imposes a civil penalty of $50,000 for each day any individual fails to provide notice of a major security breach (not to exceed $1 million).

(Sec. 8) Increases the prison term for computer fraud to a maximum of 30 years. Requires forfeiture of any personal property used to commit computer fraud.

(Sec. 9) Directs the U.S. Sentencing Commission to review and amend its guidelines and policy statements to reflect congressional intent to increase criminal penalties for computer fraud.

(Sec. 10) Imposes criminal penalties for damage affecting ten or more protected computers during any one-year period.

(Sec. 11) Authorizes additional funding in FY2007-FY2011 to the Director of the Secret Service, the Attorney General for the Criminal Division of the Department of Justice, and the Director of the FBI to investigate and prosecute crimes committed through the use of computers.


Input: Consider Input: SECTION 1. CREDIT FOR INCREASING DEVELOPMENT ACTIVITIES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 41 the following new section:

``SEC. 41A. CREDIT FOR INCREASING DEVELOPMENT ACTIVITIES.

    ``(a) In General.--For purposes of section 38, at the election of 
the taxpayer, the development credit determined under this section for 
the taxable year shall be an amount equal to 30 percent of so much of 
the qualified development expenses for the taxable year as exceeds 50 
percent of the average qualified development expenses for the 3 taxable 
years preceding the taxable year for which the credit is being 
determined.
    ``(b) Qualified Development Expenses.--For purposes of this 
section--
            ``(1) In general.--The term `qualified development 
        expenses' means the sum of the following amounts which are paid 
        or incurred during the taxable year in carrying on any trade or 
        business of the taxpayer:
                    ``(A) Any in-house development expenses.
                    ``(B) Any contract development expenses.
            ``(2) In-house development expenses; contract development 
        expenses.--The terms `in-house development expenses' and 
        `contract development expenses' shall have the respective 
        meaning given such terms in paragraphs (2) and (3) of section 
        41(b), except such paragraphs shall be applied by substituting 
        `qualified development' for `qualified research'.
    ``(c) Qualified Development.--The term `qualified development' 
means the systematic application of knowledge or understanding directed 
toward the production of useful material, devices, and systems or 
methods, including design, development, and improvement of prototypes 
and new processes to meet specific requirements. For purposes of the 
preceding sentence the rules of subparagraphs (A), (B), and (C) of 
section 41(d)(1) shall apply with respect to any development taken into 
account under this section.
    ``(d) Special Rule in Case of No Qualified Development Expenses in 
Any of 3 Preceding Years.--
            ``(1) Taxpayers to which this subparagraph applies.--The 
        credit under this section shall be determined under this 
        subsection if the taxpayer has no qualified development 
        expenses in any one of the 3 taxable years preceding the 
        taxable year for which the credit is being determined.
            ``(2) Credit rate.--The credit determined under this 
        subparagraph shall be equal to 12 percent of the qualified 
        development expenses for the taxable year.
    ``(e) Election.--An election under this section shall apply to the 
taxable year for which made and all succeeding taxable years unless 
revoked with the consent of the Secretary.
    ``(f) Other Special Rules.--Rules similar to the rules of 
subsections (d)(4), (f), and (g) of section 41 shall apply for purposes 
of this section.
    ``(g) Termination.--This section shall not apply to taxable years 
beginning after December 31, 2018.''.
    (b) Coordination With Section 41.--Subsection (b) of section 41 of 
such Code is amended by adding at the end the following new paragraph:
            ``(5) Coordination with section 41a.--In the case of any 
        taxable year for which an election is in effect under section 
        41A, for purposes of determining the amount of qualified 
        research expenses for such taxable year and the fixed-base 
        percentage with respect to such taxable year, qualified 
        research expenses shall not include any qualified development 
        expenses (as defined in subsection (b) of such section).''.
    (c) Coordination With Deductions.--Section 280C is amended by 
adding at the end the following new subsection:
    ``(j) Credit for Increasing Development Activities.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified development expenses (as defined in 
        section 41A(b)) otherwise allowable as a deduction for the 
        taxable year which is equal to the amount of the credit 
        determined for such taxable year under section 41A(a).
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--If--
                    ``(A) the amount of the credit determined for the 
                taxable year under section 41A(a), exceeds
                    ``(B) the amount allowable as a deduction for such 
                taxable year for qualified development expenses 
                (determined without regard to paragraph (1)),
        the amount chargeable to capital account for the taxable year 
        for such expenses shall be reduced by the amount of such 
        excess.
            ``(3) Election of reduced credit.--
                    ``(A) In general.--In the case of any taxable year 
                for which an election is made under this paragraph--
                            ``(i) paragraphs (1) and (2) shall not 
                        apply, and
                            ``(ii) the amount of the credit under 
                        section 41A(a) shall be the amount determined 
                        under subparagraph (B).
                    ``(B) Amount of reduced credit.--The amount of 
                credit determined under this subparagraph for any 
                taxable year shall be the amount equal to the excess 
                of--
                            ``(i) the amount of credit determined under 
                        section 41A(a) without regard to this 
                        paragraph, over
                            ``(ii) the product of--
                                    ``(I) the amount described in 
                                clause (i), and
                                    ``(II) the maximum rate of tax 
                                under section 11(b)(1).
                    ``(C) Election.--An election under this paragraph 
                for any taxable year shall be made not later than the 
                time for filing the return of tax for such year 
                (including extensions), shall be made on such return, 
                and shall be made in such manner as the Secretary may 
                prescribe. Such an election, once made, shall be 
                irrevocable.
            ``(4) Controlled groups.--Paragraph (3) of subsection (b) 
        shall apply for purposes of this subsection.''.
    (d) Part of General Business Credit.--Subsection (b) of section 38 
of such Code is amended by striking ``plus'' at the end of paragraph 
(35), by striking the period at the end of paragraph (36) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(37) the development credit determined under section 
        41A.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 2. INCREASE IN ALTERNATIVE SIMPLIFIED CREDIT FOR RESEARCH.

    (a) In General.--Subparagraph (A) of section 41(c)(5) of the 
Internal Revenue Code of 1986 is amended by striking ``14 percent (12 
percent in the case of taxable years ending before January 1, 2009)'' 
and inserting ``20 percent''.
    (b) Special Rule in Case of No Qualified Research Expenses in Any 
of 3 Preceding Taxable Years.--Clause (ii) of section 41(c)(5)(B) of 
such Code is amended by striking ``6 percent'' and inserting ``8 
percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.

SEC. 3. EXTENSION OF CREDIT FOR INCREASING RESEARCH ACTIVITIES.

    (a) In General.--Subparagraph (B) of section 41(h)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``December 31, 
2013'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred after December 31, 2013.


Output: Amends the Internal Revenue Code to: (1) allow through 2018 a new business-related tax credit for an increase in expenditures for qualified development expenses (defined as the sum of any in-house and contract development expenses incurred in the trade or business of a taxpayer), (2) increase to 20% the rate of the alternative simplified research tax credit, and (3) extend through 2018 the tax credit for increasing research activities.