S. 1756 (es) To enhance the ability of the National Laboratories to meet Department of Energy missions, and for other purposes. [Engrossed in Senate] ...

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                                                       Calendar No. 660
106th CONGRESS
  2d Session
                                S. 1755

                          [Report No. 106-326]

To amend the Communications Act of 1934 to regulate interstate commerce 
                    in the use of mobile telephones.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 20, 1999

  Mr. Brownback (for himself, Mr. Dorgan, Mr. Wyden, Mr. Cleland, Mr. 
 Breaux, Mr. Rockefeller, Mr. Bryan, Mr. Lott, Mr. Gorton, Ms. Snowe, 
  Mr. Ashcroft, Mr. Abraham, Mr. Kerry, Mr. Burns, Mr. Hollings, Mr. 
 Frist, and Mr. Inouye) introduced the following bill; which was read 
     twice and referred to the Committee on Commerce, Science, and 
                             Transportation

                             June 30, 2000

               Reported by Mr. McCain, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
To amend the Communications Act of 1934 to regulate interstate commerce 
                    in the use of mobile telephones.

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

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Mobile Telecommunications 
Sourcing Act''.</DELETED>

<DELETED>SEC. 2. FINDINGS</DELETED>

<DELETED>    The Congress finds the following:</DELETED>
        <DELETED>    (1) The provision of mobile telecommunications 
        services is a matter of interstate commerce within the 
        jurisdiction of the United States Congress under Article I, 
        Section 8 of the United States Constitution. Certain aspects of 
        mobile telecommunications technologies and services do not 
        respect, and operate independently of, State and local 
        jurisdictional boundaries.</DELETED>
        <DELETED>    (2) The mobility afforded to millions of American 
        consumers by mobile telecommunications services helps to fuel 
        the American economy, facilitate the development of the 
        information superhighway and provide important safety 
        benefits.</DELETED>
        <DELETED>    (3) Users of mobile telecommunications services 
        can originate a call in one State or local jurisdiction and 
        travel through other States or local jurisdictions during the 
        course of the call. These circumstances make it more difficult 
        to track the separate segments of a particular call with all of 
        the States and local jurisdictions involved with the call. In 
        addition, expanded home calling areas, bundled service 
        offerings and other marketing advances make it increasingly 
        difficult to assign each transaction to a specific taxing 
        jurisdiction.</DELETED>
        <DELETED>    (4) State and local taxes imposed on mobile 
        telecommunications services that are not consistently based can 
        subject consumers, businesses and others engaged in interstate 
        commerce to multiple, confusing and burdensome State and local 
        taxes and result in higher costs to consumers and the 
        industry.</DELETED>
        <DELETED>    (5) State and local taxes that are not 
        consistently based can result in some telecommunications 
        revenues inadvertently escaping State and local taxation 
        altogether, thereby violating standards of tax fairness, 
        creating inequities among competitors in the telecommunications 
        market and depriving State and local governments of needed tax 
        revenues.</DELETED>
        <DELETED>    (6) Because State and local tax laws and 
        regulations of many jurisdictions were established before the 
        proliferation of mobile telecommunications services, the 
        application of these laws to the provision of mobile 
        telecommunications services may produce conflicting or 
        unintended tax results.</DELETED>
        <DELETED>    (7) State and local governments provide essential 
        public services, including services that Congress encourages 
        State and local governments to undertake in partnership with 
        the Federal government for the achievement of important 
        national policy goals.</DELETED>
        <DELETED>    (8) State and local governments provide services 
        that support the flow of interstate commerce, including 
        services that support the use and development of mobile 
        telecommunications services.</DELETED>
        <DELETED>    (9) State governments as sovereign entities in our 
        Federal system may require that interstate commerce conducted 
        within their borders pay its fair share of tax to support the 
        governmental services provided by those governments.</DELETED>
        <DELETED>    (10) Local governments as autonomous subdivisions 
        of a State government may require that interstate commerce 
        conducted within their borders pay its fair share of tax to 
        support the governmental services provided by those 
        governments.</DELETED>
        <DELETED>    (11) To balance the needs of interstate commerce 
        and the mobile telecommunications industry with the legitimate 
        role of State and local governments in our system of 
        federalism, Congress needs to establish a uniform and coherent 
        national policy regarding the taxation of mobile 
        telecommunications services through the exercise of its 
        constitutional authority to regulate interstate 
        commerce.</DELETED>
        <DELETED>    (12) Congress also recognizes that the solution 
        established by this legislation is a necessarily practical one 
        and must provide for a system of State and local taxation of 
        mobile telecommunications services that in the absence of this 
        solution would not otherwise occur. To this extent, Congress 
        exercises its power to provide a reasonable solution to 
otherwise insoluble problems of multi-jurisdictional 
commerce.</DELETED>

<DELETED>SEC. 3. AMENDMENT OF COMMUNICATIONS ACT OF 1934 TO PROVIDE 
              RULES FOR DETERMINING STATE AND LOCAL GOVERNMENT 
              TREATMENT OF CHARGES RELATED TO MOBILE TELECOMMUNICATIONS 
              SERVICES.</DELETED>

<DELETED>    The Communications Act of 1934 (47 U.S.C. 151 et seq.) is 
amended by adding at the end thereof the following:</DELETED>

<DELETED>``TITLE VIII--STATE AND LOCAL TREATMENT OF CHARGES FOR MOBILE 
                 TELECOMMUNICATIONS SERVICES.</DELETED>

<DELETED>``SEC. 801. APPLICATION OF TITLE.</DELETED>

<DELETED>    ``(a) In General.--This title applies to any tax, charge, 
or fee levied by a taxing jurisdiction as a fixed charge for each 
customer or measured by gross amounts charged to customers for mobile 
telecommunications services, regardless of whether such tax, charge, or 
fee is imposed on the vendor or customer of the service and regardless 
of the terminology used to describe the tax, charge, or fee.</DELETED>
<DELETED>    ``(b) General Exceptions.--This title does not apply to--
</DELETED>
        <DELETED>    ``(1) any tax, charge, or fee levied upon or 
        measured by the net income, capital stock, net worth, or 
        property value of the provider of mobile telecommunications 
        service;</DELETED>
        <DELETED>    ``(2) any tax, charge, or fee that is applied to 
        an equitably apportioned gross amount that is not determined on 
        a transactional basis;</DELETED>
        <DELETED>    ``(3) any tax, charge, or fee that represents 
        compensation for a mobile telecommunications service provider's 
        use of public rights of way or other public property, provided 
        that such tax, charge, or fee is not levied by the taxing 
        jurisdiction as a fixed charge for each customer or measured by 
        gross amounts charged to customers for mobile telecommunication 
        services; or</DELETED>
        <DELETED>    ``(4) any fee related to obligations under section 
        254 of this Act.''.</DELETED>
<DELETED>    ``(c) Specific Exceptions.--This title--</DELETED>
        <DELETED>    ``(1) does not apply to the determination of the 
        taxing situs of prepaid telephone calling services;</DELETED>
        <DELETED>    ``(2) does not affect the taxability of either the 
        initial sale of mobile telecommunications services or 
        subsequent resale, whether as sales of the service alone or as 
        a part of a bundled product, where the Internet Tax Freedom Act 
        would preclude a taxing jurisdiction from subjecting the 
        charges of the sale of these mobile telecommunications services 
        to a tax, charge, or fee but this section provides no evidence 
        of the intent of Congress with respect to the applicability of 
        the Internet Tax Freedom Act to such charges; and</DELETED>
        <DELETED>    ``(3) does not apply to the determination of the 
        taxing situs of air-ground radiotelephone service as defined in 
        section 22.99 of the Commission's regulations (47 C.F.R. 
        22.99).</DELETED>

<DELETED>``SEC. 802. SOURCING RULES.</DELETED>

<DELETED>    ``(a) In General.--Notwithstanding the law of any State or 
political subdivision thereof to the contrary, mobile 
telecommunications services provided in a taxing jurisdiction to a 
customer, the charges for which are billed by or for the customer's 
home service provider, shall be deemed to be provided by the customer's 
home service provider.</DELETED>
<DELETED>    ``(b) Jurisidiction.--All charges for mobile 
telecommunications services that are deemed to be provided by the 
customer's home service provider under this title are authorized to be 
subjected to tax, charge, or fee by the taxing jurisdictions whose 
territorial limits encompass the customer's place of primary use, 
regardless of where the mobile telecommunication services originate, 
terminate or pass through, and no other taxing jurisdiction may impose 
taxes, charges, or fees on charges for such mobile telecommunications 
services.</DELETED>

<DELETED>``SEC. 803. LIMITATIONS.</DELETED>

<DELETED>    ``This title does not--</DELETED>
        <DELETED>    ``(1) provide authority to a taxing jurisdiction 
        to impose a tax, charge, or fee that the laws of the 
        jurisdiction do not authorize the jurisdiction to impose; 
        or</DELETED>
        <DELETED>    ``(2) modify, impair, supersede, or authorize the 
        modification, impairment, or supersession of, the law of any 
        taxing jurisdiction pertaining to taxation except as expressly 
        provided in this title.</DELETED>

<DELETED>``SEC. 804. ELECTRONIC DATABASES FOR NATIONWIDE STANDARD 
              NUMERIC JURISDICTIONAL CODES.</DELETED>

<DELETED>    ``(a) Electronic Database.--A State may provide an 
electronic database to a home service provider or, if a State does not 
provide such an electronic database to home service providers, then the 
designated database provider may provide an electronic database to a 
home service provider. The electronic database, whether provided by the 
State or the designated database provider, shall be provided in a 
format approved by the American National Standards Institute's 
Accredited Standards Committee X12, that, allowing for de minimis 
deviations, designates for each street address in the State, including 
to the extent practicable, any multiple postal street addresses 
applicable to one street location, the appropriate taxing 
jurisdictions, and the appropriate code for each taxing jurisdiction, 
for each level of taxing jurisdiction, identified by one nationwide 
standard numeric code. The electronic database shall also provide the 
appropriate code for each street address with respect to political 
subdivisions which are not taxing jurisdictions when reasonably needed 
to determine the proper taxing jurisdiction. The nationwide standard 
numeric codes shall contain the same number of numeric digits with each 
digit or combination of digits referring to the same level of taxing 
jurisdiction throughout the United States using a format similar to 
FIPS 55-3 or other appropriate standard approved by the Federation of 
Tax Administrators and the Multistate Tax Commission, or their 
successors. Each address shall be provided in standard postal 
format.</DELETED>
<DELETED>    ``(b) Notice; Updates.--A State or designated database 
provider that provides or maintains an electronic database described in 
subsection (a) shall provide notice of the availability of the then 
current electronic database, and any subsequent revisions thereof, by 
publication in the manner normally employed for the publication of 
informational tax, charge, or fee notices to taxpayers in that 
State.</DELETED>
<DELETED>    ``(c) User Held Harmless.--A home service provider using 
the data contained in the electronic database described in subsection 
(a) shall be held harmless from any tax, charge, or fee liability that 
otherwise would be due solely as a result of any error or omission in 
the electronic database provided by a State or designated database 
provider. The home service provider shall reflect changes made to the 
electronic database during a calendar quarter no later than 30 days 
after the end of that calendar quarter for each State that issues 
notice of the availability of an electronic database reflecting such 
changes under subsection (b).</DELETED>

<DELETED>``SEC. 805. PROCEDURE WHERE NO ELECTRONIC DATABASE 
              PROVIDED.</DELETED>

<DELETED>    ``(a) In General.--If neither a State nor designated 
database provider provides an electronic database under section 804, a 
home service provider shall be held harmless from any tax, charge, or 
fee liability in that State that otherwise would be due solely as a 
result of an assignment of a street address to an incorrect taxing 
jurisdiction if, subject to section 806, the home service provider 
employs an enhanced zip code to assign each street address to a 
specific taxing jurisdiction for each level of taxing jurisdiction and 
exercises due diligence at each level of taxing jurisdiction to ensure 
that each such street address is assigned to the correct taxing 
jurisdiction. Where an enhanced zip code overlaps boundaries of taxing 
jurisdictions of the same level, the home service provider must 
designate one specific jurisdiction within such enhanced zip code for 
use in taxing the activity for that enhanced zip code for each level of 
taxing jurisdiction. Any enhanced zip code assignment changed in 
accordance with section 806 is deemed to be in compliance with this 
section. For purposes of this section, there is a rebuttable 
presumption that a home service provider has exercised due diligence if 
such home service provider demonstrates that it has--</DELETED>
        <DELETED>    ``(1) expended reasonable resources to implement 
        and maintain an appropriately detailed electronic database of 
        street address assignments to taxing jurisdictions;</DELETED>
        <DELETED>    ``(2) implemented and maintained reasonable 
        internal controls to promptly correct misassignments of street 
        addresses to taxing jurisdictions; and</DELETED>
        <DELETED>    ``(3) used all reasonably obtainable and usable 
        data pertaining to municipal annexations, incorporations, 
        reorganizations and any other changes in jurisdictional 
        boundaries that materially affect the accuracy of the 
        electronic database.</DELETED>
<DELETED>    ``(b) Termination of Safe Harbor.--Subsection (a) applies 
to a home service provider that is in compliance with the requirements 
of subsection (a), with respect to a State for which an electronic 
database is not provided under section 804 until the later of--
</DELETED>

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