[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3489 Reported in House (RH)]






                                                 Union Calendar No. 409
106th CONGRESS
  2d Session
                                H. R. 3489

                  [Report No. 106-725, Parts I and II]

To amend the Communications Act of 1934 to regulate interstate commerce 
     in the use of mobile telephones and to strengthen and clarify 
   prohibitions on electronic eavesdropping, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 1999

 Mr. Pickering (for himself, Mr. Markey, Mrs. Wilson, Mr. Largent, and 
 Mr. Tauzin) introduced the following bill; which was referred to the 
    Committee on Commerce, and in addition to the Committee on the 
 Judiciary, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

                             July 11, 2000

Additional sponsors: Mr. Dingell, Mr. Fossella, Mr. Oxley, Mr. Sununu, 
  Mrs. Cubin, Mr. Stearns, Mr. Gillmor, Mr. Ehrlich, Ms. McCarthy of 
  Missouri, Mr. Blunt, Mr. Shays, Mr. Boucher, Mr. Wynn, Mr. Deal of 
     Georgia, Mr. McHugh, Mr. Sweeney, Mr. Coburn, and Mr. Gonzalez

                             July 11, 2000

       Reported from the Committee on Commerce with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                             July 11, 2000

    Reported from the Committtee on the Judiciary with amendments, 
   committed to the Committee of the Whole House on the State of the 
                    Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                           in boldface roman]
    [For text of introduced bill, see copy of bill as introduced on 
                           November 18, 1999]

_______________________________________________________________________

                                 A BILL


 
To amend the Communications Act of 1934 to regulate interstate commerce 
     in the use of mobile telephones and to strengthen and clarify 
   prohibitions on electronic eavesdropping, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wireless Telecommunications Sourcing 
and Privacy Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.

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.

    (a) In General.--The Communications Act of 1934 (47 U.S.C. 151 et 
seq.) is amended by adding at the end thereof the following:

     ``TITLE VIII--STATE AND LOCAL TREATMENT OF CHARGES FOR MOBILE 
                      TELECOMMUNICATIONS SERVICES

``SEC. 801. APPLICATION OF TITLE.

    ``(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.
    ``(b) General Exceptions.--This title does not apply to--
            ``(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;
            ``(2) any tax, charge, or fee that is applied to an 
        equitably apportioned amount that is not determined on a 
        transactional basis;
            ``(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;
            ``(4) any generally applicable business and occupation tax 
        that is imposed by a State, is applied to gross receipts or 
        gross proceeds, is the legal liability of the carrier, and 
        statutorily allows the taxpayer to elect to use the sourcing 
        method required in this Act; or
            ``(5) any fee related to obligations under section 254 of 
        this Act.''.
    ``(c) Specific Exceptions.--This title--
            ``(1) does not apply to the determination of the taxing 
        situs of prepaid telephone calling services;
            ``(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
            ``(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).

``SEC. 802. SOURCING RULES.

    ``(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.
    ``(b) Jurisdiction.--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.

``SEC. 803. LIMITATIONS.

    ``This title does not--
            ``(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
            ``(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.

``SEC. 804. ELECTRONIC DATABASES FOR NATIONWIDE STANDARD NUMERIC 
              JURISDICTIONAL CODES.

    ``(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.
    ``(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.
    ``(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).

``SEC. 805. PROCEDURE WHERE NO ELECTRONIC DATABASE PROVIDED.

    ``(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--
            ``(1) expended reasonable resources to implement and 
        maintain an appropriately detailed electronic database of 
        street address assignments to taxing jurisdictions;
            ``(2) implemented and maintained reasonable internal 
        controls to promptly correct misassignments of street addresses 
        to taxing jurisdictions; and
            ``(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.
    ``(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--
            ``(1) 18 months after the nationwide standard numeric code 
        described in section 804(a) has been approved by the Federation 
        of Tax Administrators and the Multistate Tax Commission; or
            ``(2) 6 months after that State or a designated database 
        provider in that State provides the electronic database as 
        prescribed in section 804(a).

``SEC. 806. CORRECTION OF ERRONEOUS DATA FOR PLACE OF PRIMARY USE.

    ``(a) In General.--A taxing jurisdiction, or a State on behalf of 
any taxing jurisdiction or taxing jurisdictions within such State, 
may--
            ``(1) determine that the address used for purposes of 
        determining the taxing jurisdictions to which taxes, charges, 
        or fees for mobile telecommunications services are remitted 
        does not meet the definition of place of primary use in section 
        809(3) and give binding notice to the home service provider to 
        change the place of primary use on a prospective basis from the 
        date of notice of determination if--
                    ``(A) where the taxing jurisdiction making such 
                determination is not a State, such taxing jurisdiction 
                obtains the consent of all affected taxing 
                jurisdictions within the State before giving such 
                notice of determination; and
                    ``(B) the customer is given an opportunity, prior 
                to such notice of determination, to demonstrate in 
                accordance with applicable State or local tax, charge, 
                or fee administrative procedures that the address is 
                the customer's place of primary use;
            ``(2) determine that the assignment of a taxing 
        jurisdiction by a home service provider under section 805 does 
        not reflect the correct taxing jurisdiction and give binding 
        notice to the home service provider to change the assignment on 
a prospective basis from the date of notice of determination if--
                    ``(A) where the taxing jurisdiction making such 
                determination is not a State, such taxing jurisdiction 
                obtains the consent of all affected taxing 
                jurisdictions within the State before giving such 
                notice of determination; and
                    ``(B) the home service provider is given an 
                opportunity to demonstrate in accordance with 
                applicable State or local tax, charge, or fee 
                administrative procedures that the assignment reflects 
                the correct taxing jurisdiction.

``SEC. 807. DUTY OF HOME SERVICE PROVIDER REGARDING PLACE OF PRIMARY 
              USE.

    ``(a) Place of Primary Use.--A home service provider is responsible 
for obtaining and maintaining the customer's place of primary use (as 
defined in section 809). Subject to section 806, and if the home 
service provider's reliance on information provided by its customer is 
in good faith, a home service provider--
            ``(1) may rely on the applicable residential or business 
        street address supplied by the home service provider's 
        customer; and
            ``(2) is not liable for any additional taxes, charges, or 
        fees based on a different determination of the place of primary 
        use for taxes, charges or fees that are customarily passed on 
        to the customer as a separate itemized charge.
    ``(b) Address Under Existing Agreements.--Except as provided in 
section 806, a home service provider may treat the address used by the 
home service provider for tax purposes for any customer under a service 
contract or agreement in effect 2 years after the date of enactment of 
the Wireless Telecommunications Sourcing and Privacy Act as that 
customer's place of primary use for the remaining term of such service 
contract or agreement, excluding any extension or renewal of such 
service contract or agreement, for purposes of determining the taxing 
jurisdictions to which taxes, charges, or fees on charges for mobile 
telecommunications services are remitted.

``SEC. 808. SCOPE; SPECIAL RULES.

    ``(a) Title Does Not Supersede Customer's Liability to Taxing 
Jurisdiction.--Nothing in this title modifies, impairs, supersedes, or 
authorizes the modification, impairment, or supersession of, any law 
allowing a taxing jurisdiction to collect a tax, charge, or fee from a 
customer that has failed to provide its place of primary use.
    ``(b) Additional Taxable Charges.--If a taxing jurisdiction does 
not otherwise subject charges for mobile telecommunications services to 
taxation and if these charges are aggregated with and not separately 
stated from charges that are subject to taxation, then the charges for 
otherwise non-taxable mobile telecommunications services may be subject 
to taxation unless the home service provider can reasonably identify 
charges not subject to such tax, charge, or fee from its books and 
records that are kept in the regular course of business.
    ``(c) Non-Taxable Charges.--If a taxing jurisdiction does not 
subject charges for mobile telecommunications services to taxation, a 
customer may not rely upon the nontaxability of charges for mobile 
telecommunications services unless the customer's home service provider 
separately states the charges for non-taxable mobile telecommunications 
services from taxable charges or the home service provider elects, 
after receiving a written request from the customer in the form 
required by the provider, to provide verifiable data based upon the 
home service provider's books and records that are kept in the regular 
course of business that reasonably identifies the nontaxable charges.
    ``(d) References to Regulations.--Any reference in this title to 
the Commission's regulations is a reference to those regulations as 
they were in effect on June 1, 1999.

``SEC. 809. DEFINITIONS.

    ``In this title:
            ``(1) Charges for mobile telecommunications services.--The 
        term `charges for mobile telecommunications services' means any 
        charge for, or associated with, the provision of commercial 
        mobile radio service, as defined in section 20.3 of the 
        Commission's regulations (47 C.F.R. 20.3), or any charge for, 
        or associated with, a service provided as an adjunct to a 
        commercial mobile radio service, that is billed to the customer 
        by or for the customer's home service provider regardless of 
        whether individual transmissions originate or terminate within 
        the licensed service area of the home service provider.
            ``(2) Taxing jurisdiction.--The term `taxing jurisdiction' 
        means any of the several States, the District of Columbia, or 
        any territory or possession of the United States, any 
        municipality, city, county, township, parish, transportation 
        district, or assessment jurisdiction, or any other political 
        subdivision within the territorial limits of the United States 
        with the authority to impose a tax, charge, or fee.
            ``(3) Place of primary use.--The term `place of primary 
        use' means the street address representative of where the 
        customer's use of the mobile telecommunications service 
        primarily occurs, which must be--
                    ``(A) either the residential street address or the 
                primary business street address of the customer; and
                    ``(B) within the licensed service area of the home 
                service provider.
            ``(4) Licensed service area.--The term `licensed service 
        area' means the geographic area in which the home service 
        provider is authorized by law or contract to provide commercial 
        mobile radio service to the customer.
            ``(5) Home service provider.--The term `home service 
        provider' means the facilities-based carrier or reseller with 
        which the customer contracts for the provision of mobile 
        telecommunications services.
            ``(6) Customer.--
                    ``(A) In general.--The term `customer' means--
                            ``(i) the person or entity that contracts 
                        with the home service provider for mobile 
                        telecommunications services; or
                            ``(ii) where the end user of mobile 
                        telecommunications services is not 
the contracting party, the end user of the mobile telecommunications 
service, but this clause applies only for the purpose of determining 
the place of primary use.
                    ``(B) The term `customer' does not include--
                            ``(i) a reseller of mobile 
                        telecommunications service; or
                            ``(ii) a serving carrier under an 
                        arrangement to serve the customer outside the 
                        home service provider's licensed service area.
            ``(7) Designated database provider.--The term ``designated 
        database provider'' means a corporation, association, or other 
        entity representing all the political subdivisions of a State 
        that is--
                    ``(A) responsible for providing the electronic 
                database prescribed in section 804(a) if the State has 
                not provided such electronic database; and
                    ``(B) sanctioned by municipal and county 
                associations or leagues of the State whose 
                responsibility it would otherwise be to provide the 
                electronic database prescribed by this title.
            ``(8) Prepaid telephone calling services.--The term 
        `prepaid telephone calling service' means the right to purchase 
        exclusively telecommunications services that must be paid for 
        in advance, that enables the origination of calls using an 
        access number, authorization code, or both, whether manually or 
        electronically dialed, if the remaining amount of units of 
        service that have been prepaid is known by the provider of the 
        prepaid service on a continuous basis.
            ``(9) Reseller.--The term `reseller'--
                    ``(A) means a provider who purchases 
                telecommunications services from another 
                telecommunications service provider and then resells, 
                uses as a component part of, or integrates the 
                purchased services into a mobile telecommunications 
                service; but
                    ``(B) does not include a serving carrier with which 
                a home service provider arranges for the services to 
                its customers outside the home service provider's 
                licensed service area.
            ``(10) Serving carrier.--The term `serving carrier' means a 
        facilities-based carrier providing mobile telecommunications 
        service to a customer outside a home service provider's or 
        reseller's licensed service area.
            ``(11) Mobile telecommunications service.--The term `mobile 
        telecommunications service' means commercial mobile radio 
        service, as defined in section 20.3 of the Commission's 
        regulations (47 C.F.R. 20.3).
            ``(12) Enhanced zip code.--The term `enhanced zip code' 
        means a United States postal zip code of 9 or more digits.

``SEC. 810. COMMISSION NOT TO HAVE JURISDICTION OF TITLE.

    ``Notwithstanding any other provision of this Act, the Commission 
shall have no jurisdiction over the interpretation, implementation, or 
enforcement of this title.

``SEC. 811. NONSEVERABILITY.

    ``If a court of competent jurisdiction enters a final judgment on 
the merits that is no longer subject to appeal, which substantially 
limits or impairs the essential elements of this title based on Federal 
statutory or Federal Constitutional grounds, or which determines that 
this title violates the United States Constitution, then the provisions 
of this title are null and void and of no effect.

``SEC. 812. NO INFERENCE.

    ``(a) Internet Tax Freedom Act.--Nothing in this title may be 
construed as bearing on Congressional intent in enacting the Internet 
Tax Freedom Act or as affecting that Act in any way.
    ``(b) Telecommunications Act of 1996.--Nothing in this title shall 
limit or otherwise affect the implementation of the Telecommunications 
Act of 1996 or the amendments made by that Act.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to customer bills issued after the first day of the first month 
beginning more than 2 years after the date of enactment of this Act.

SEC. 4. GAO DETERMINATION OF FCC REGULATORY FEES.

    Within 180 days after the date of the enactment of this Act, the 
Comptroller General of the United States shall--
            (1) conduct a review of the regulatory fees with respect to 
        mobile telecommunications services that were collected during 
        fiscal years 1998, 1999, and 2000 by the Federal Communications 
        Commission to determine--
                    (A) whether such fees were assessed in accordance 
                with section 9 of the Communications Act of 1934 (47 
                U.S.C. 159) and applicable public notices; and
                    (B) whether the Commission acquired information 
                related to the assessment of such fees in a timely and 
                accurate manner, and has maintained such information, 
                that is sufficient to support the transactions; and
            (2) submit a report to the Congress regarding such review 
        and determinations.

SEC. 5. COMMERCE IN ELECTRONIC EAVESDROPPING DEVICES.

    (a) Prohibition on Modification.--Section 302(b) of the 
Communications Act of 1934 (47 U.S.C. 302a(b)) is amended by inserting 
before the period at the end thereof the following: ``, or modify any 
such device, equipment, or system in any manner that causes such 
device, equipment, or system to fail to comply with such regulations''.
    (b) Prohibition on Commerce in Scanning Receivers.--Section 302(d) 
of such Act (47 U.S.C. 302a(d)) is amended to read as follows:
    ``(d) Equipment Authorization Regulations.--
            ``(1) Privacy protections required.--The Commission shall 
        prescribe regulations, and review and revise such regulations 
        as necessary in response to subsequent changes in technology or 
        behavior, denying equipment authorization (under part 15 of 
        title 47, Code of Federal Regulations, or any other part of 
        that title) for any scanning receiver that is capable of--
                    ``(A) receiving transmissions in the frequencies 
                that are allocated to the domestic cellular radio 
                telecommunications service or the personal 
                communications service;
                    ``(B) readily being altered to receive 
                transmissions in such frequencies;
                    ``(C) being equipped with decoders that--
                            ``(i) convert digital domestic cellular 
                        radio telecommunications service, personal 
                        communications service, or protected 
                        specialized mobile radio service transmissions 
                        to analog voice audio; or
                            ``(ii) convert protected paging service 
                        transmissions to alphanumeric text; or
                    ``(D) being equipped with devices that otherwise 
                decode encrypted radio transmissions for the purposes 
                of unauthorized interception.
            ``(2) Privacy protections for shared frequencies.--The 
        Commission shall, with respect to scanning receivers capable of 
        receiving transmissions in frequencies that are used by 
        commercial mobile services and that are shared by public safety 
        users, examine methods, and may prescribe such regulations as 
        may be necessary, to enhance the privacy of users of such 
        frequencies.
            ``(3) Tampering prevention.--In prescribing regulations 
        pursuant to paragraph (1), the Commission shall consider 
        defining `capable of readily being altered' to require scanning 
        receivers to be manufactured in a manner that effectively 
        precludes alteration of equipment features and functions as 
        necessary to prevent commerce in devices that may be used 
        unlawfully to intercept or divulge radio communication.
            ``(4) Warning labels.--In prescribing regulations under 
        paragraph (1), the Commission shall consider requiring labels 
        on scanning receivers warning of the prohibitions in Federal 
        law on intentionally intercepting or divulging radio 
        communications.
            ``(5) Definitions.--As used in this subsection, the term 
        `protected' means secured by an electronic method that is not 
        published or disclosed except to authorized users, as further 
        defined by Commission regulation.''.
    (c) Implementing Regulations.--Within 90 days after the date of 
enactment of this Act, the Federal Communications Commission shall 
prescribe amendments to its regulations for the purposes of 
implementing the amendments made by this section.

SEC. 6. UNAUTHORIZED INTERCEPTION OR PUBLICATION OF COMMUNICATIONS.

    Section 705 of the Communications Act of 1934 (47 U.S.C. 605) is 
amended--
            (1) in the heading of such section, by inserting 
        ``interception or'' after ``unauthorized'';
            (2) in the first sentence of subsection (a), by striking 
        ``Except as authorized by chapter 119, title 18, United States 
        Code, no person'' and inserting ``No person'';
            (3) in the second sentence of subsection (a)--
                    (A) by inserting ``intentionally'' before 
                ``intercept''; and
                    (B) by striking ``communication and divulge'' and 
                inserting ``communication, and no person having 
                intercepted such a communication shall intentionally 
                divulge'';
            (4) in the fourth sentence of subsection (a)--
                    (A) by inserting ``(A)'' after ``intercepted, 
                shall''; and
                    (B) by striking ``thereof) or'' and inserting 
                ``thereof); or (B)'';
            (5) by striking the last sentence of subsection (a) and 
        inserting the following: ``Nothing in this subsection prohibits 
        an interception or disclosure of a communication as authorized 
        by chapter 119 of title 18, United States Code.'';
            (6) in subsection (e)(1)--
                    (A) by striking ``fined not more than $2,000 or''; 
                and
                    (B) by inserting ``or fined under title 18, United 
                States Code,'' after ``6 months,'';
            (7) in subsection (e)(3), by striking ``any violation'' and 
        inserting ``any receipt, interception, divulgence, publication, 
        or utilization of any communication in violation'';
            (8) in subsection (e)(4), by striking ``any other activity 
        prohibited by subsection (a)'' and inserting ``any receipt, 
        interception, divulgence, publication, or utilization of any 
        communication in violation of subsection (a)''; and
            (9) by adding at the end of subsection (e) the following 
        new paragraph:
    ``(7) Notwithstanding any other investigative or enforcement 
activities of any other Federal agency, the Commission shall 
investigate alleged violations of this section and may proceed to 
initiate action under section 503 of this Act to impose forfeiture 
penalties with respect to such violation upon conclusion of the 
Commission's investigation.''.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wireless Telecommunications Privacy 
Act of 2000''.

SEC. 2. GAO DETERMINATION OF FCC REGULATORY FEES.

    Within 180 days after the date of the enactment of this Act, the 
Comptroller General of the United States shall conduct a review of the 
annual regulatory fees collected by the Federal Communications 
Commission pursuant to section 9 of the Communications Act of 1934 (47 
U.S.C. 159) to determine whether such fees have been accurately 
assessed since their inception and shall submit a report to the 
Congress regarding such review and determination.

SEC. 3. COMMERCE IN ELECTRONIC EAVESDROPPING DEVICES.

    (a) Prohibition on Modification.--Section 302(b) of the 
Communications Act of 1934 (47 U.S.C. 302a(b)) is amended by inserting 
before the period at the end thereof the following: ``, or modify any 
such device, equipment, or system in any manner that causes such 
device, equipment, or system to fail to comply with such regulations''.
    (b) Prohibition on Commerce in Scanning Receivers.--Section 302(d) 
of such Act (47 U.S.C. 302a(d)) is amended to read as follows:
    ``(d) Equipment Authorization Regulations.--
            ``(1) Privacy protections required.--The Commission shall 
        prescribe regulations, and review and revise such regulations 
        as necessary in response to subsequent changes in technology or 
        behavior, denying equipment authorization (under part 15 of 
        title 47, Code of Federal Regulations, or any other part of 
        that title) for any scanning receiver that is capable of--
                    ``(A) receiving transmissions in the frequencies 
                that are allocated to the domestic cellular radio 
                telecommunications service or the personal 
                communications service;
                    ``(B) readily being altered to receive 
                transmissions in such frequencies;
                    ``(C) being equipped with decoders that--
                            ``(i) convert digital domestic cellular 
                        radio telecommunications service, personal 
                        communications service, or protected 
                        specialized mobile radio service transmissions 
                        to analog voice audio; or
                            ``(ii) convert protected paging service 
                        transmissions to alphanumeric text; or
                    ``(D) being equipped with devices that otherwise 
                decode encrypted radio transmissions for the purposes 
                of unauthorized interception.
            ``(2) Privacy protections for shared frequencies.--The 
        Commission shall, with respect to scanning receivers capable of 
        receiving transmissions in frequencies that are used by 
        commercial mobile services and that are shared by public safety 
        users, examine methods, and may prescribe such regulations as 
        may be necessary, to enhance the privacy of users of such 
        frequencies.
            ``(3) Tampering prevention.--In prescribing regulations 
        pursuant to paragraph (1), the Commission shall consider 
        defining `capable of readily being altered' to require scanning 
        receivers to be manufactured in a manner that effectively 
        precludes alteration of equipment features and functions as 
        necessary to prevent commerce in devices that may be used 
        unlawfully to intercept or divulge radio communication.
            ``(4) Warning labels.--In prescribing regulations under 
        paragraph (1), the Commission shall consider requiring labels 
        on scanning receivers warning of the prohibitions in Federal 
        law on intentionally intercepting or divulging radio 
        communications.
            ``(5) Definitions.--As used in this subsection, the term 
        `protected' means secured by an electronic method that is not 
        published or disclosed except to authorized users, as further 
        defined by Commission regulation.''.
    (c) Implementing Regulations.--Within 90 days after the date of 
enactment of this Act, the Federal Communications Commission shall 
prescribe amendments to its regulations for the purposes of 
implementing the amendments made by this section.

SEC. 4. UNAUTHORIZED INTERCEPTION OR PUBLICATION OF COMMUNICATIONS.

    Section 705 of the Communications Act of 1934 (47 U.S.C. 605) is 
amended--
            (1) in the heading of such section, by inserting 
        ``interception or'' after ``unauthorized'';
            (2) in the first sentence of subsection (a), by striking 
        ``Except as authorized by chapter 119, title 18, United States 
        Code, no person'' and inserting ``No person'';
            (3) in the second sentence of subsection (a)--
                    (A) by inserting ``intentionally'' before 
                ``intercept''; and
                    (B) by striking ``communication and divulge'' and 
                inserting ``communication, and no person having 
                intercepted such a communication shall intentionally 
                divulge'';
            (4) in the fourth sentence of subsection (a)--
                    (A) by inserting ``(A)'' after ``intercepted, 
                shall''; and
                    (B) by striking ``thereof) or'' and inserting 
                ``thereof); or (B)'';
            (5) by striking the last sentence of subsection (a) and 
        inserting the following: ``Nothing in this subsection prohibits 
        an interception or disclosure of a communication as authorized 
        by chapter 119 of title 18, United States Code.'';
            (6) in subsection (e)(1)--
                    (A) by striking ``fined not more than $2,000 or''; 
                and
                    (B) by inserting ``or fined under title 18, United 
                States Code,'' after ``6 months,'';
            (7) in subsection (e)(3), by striking ``any violation'' and 
        inserting ``any receipt, interception, divulgence, publication, 
        or utilization of any communication in violation'';
            (8) in subsection (e)(4), by striking ``any other activity 
        prohibited by subsection (a)'' and inserting ``any receipt, 
        interception, divulgence, publication, or utilization of any 
        communication in violation of subsection (a)''; and
            (9) by adding at the end of subsection (e) the following 
        new paragraph:
    ``(7) Notwithstanding any other investigative or enforcement 
activities of any other Federal agency, the Commission shall 
investigate alleged violations of this section and may proceed to 
initiate action under section 503 of this Act to impose forfeiture 
penalties with respect to such violation upon conclusion of the 
Commission's investigation.''.
            Amend the title so as to read: ``A bill to amend the 
        Communications Act of 1934 to strengthen and clarify 
        prohibitions on electronic eavesdropping, and for other 
        purposes.''.
                                                 Union Calendar No. 409

106th CONGRESS

  2d Session

                               H. R. 3489

                  [Report No. 106-725, Parts I and II]

_______________________________________________________________________

                                 A BILL

To amend the Communications Act of 1934 to regulate interstate commerce 
     in the use of mobile telephones and to strengthen and clarify 
   prohibitions on electronic eavesdropping, and for other purposes.

_______________________________________________________________________

                             July 11, 2000

       Reported from the Committee on Commerce with an amendment

                             July 11, 2000

    Reported from the Committtee on the Judiciary with amendments, 
   committed to the Committee of the Whole House on the State of the 
                    Union, and ordered to be printed