[Congressional Record (Bound Edition), Volume 145 (1999), Part 19]
[House]
[Pages 27891-27899]
[From the U.S. Government Publishing Office, www.gpo.gov]



             DECEPTIVE MAIL PREVENTION AND ENFORCEMENT ACT

  Mr. McHUGH. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 170) to require certain notices in any mailing using a game 
of chance for the promotion of a product or service, and for other 
purposes, as amended.
  The Clerk read as follows:

                                H.R. 170

       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 ``Deceptive Mail Prevention 
     and Enforcement Act''.

     SEC. 2. RESTRICTIONS ON MAILINGS USING MISLEADING REFERENCES 
                   TO THE UNITED STATES GOVERNMENT.

       Section 3001 of title 39, United States Code, is amended--
       (1) in subsection (h)--
       (A) in the first sentence by striking ``contains a seal, 
     insignia, trade or brand name, or any other term or symbol 
     that reasonably could be interpreted or construed as implying 
     any Federal Government connection, approval or endorsement'' 
     and inserting the following: ``which reasonably could be 
     interpreted or construed as implying any Federal Government 
     connection, approval, or endorsement through the use of a 
     seal, insignia, reference to the Postmaster General, citation 
     to a Federal statute, name of a Federal agency, department, 
     commission, or program, trade or brand name, or any other 
     term or symbol; or contains any reference to the Postmaster 
     General or a citation to a Federal statute that misrepresents 
     either the identity of the mailer or the protection or status 
     afforded such matter by the Federal Government''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A) by striking ``and'' at the end;
       (ii) in subparagraph (B) by striking ``or'' at the end and 
     inserting ``and''; and
       (iii) by inserting after subparagraph (B) the following:
       ``(C) such matter does not contain a false representation 
     stating or implying that Federal Government benefits or 
     services will be affected by any purchase or nonpurchase; 
     or'';
       (2) in subsection (i) in the first sentence--
       (A) in the first sentence by striking ``contains a seal, 
     insignia, trade or brand name, or any other term or symbol 
     that reasonably could be interpreted or construed as implying 
     any Federal Government connection, approval or endorsement'' 
     and inserting the following: ``which reasonably could be 
     interpreted or construed as implying any Federal Government 
     connection, approval, or endorsement through the use of a 
     seal, insignia, reference to the Postmaster General, citation 
     to a Federal statute, name of a Federal agency, department, 
     commission, or program, trade or brand name, or any other 
     term or symbol; or contains any reference to the Postmaster 
     General or a citation to a Federal statute that misrepresents 
     either the identity of the mailer or the protection or status 
     afforded such matter by the Federal Government''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A) by striking ``and'' at the end;
       (ii) in subparagraph (B) by striking ``or'' at the end and 
     inserting ``and''; and
       (iii) by inserting after subparagraph (B) the following:
       ``(C) such matter does not contain a false representation 
     stating or implying that Federal Government benefits or 
     services will be affected by any contribution or 
     noncontribution; or'';
       (3) by redesignating subsections (j) and (k) as subsections 
     (m) and (n), respectively; and
       (4) by inserting after subsection (i) the following:
       ``(j)(1) Any matter otherwise legally acceptable in the 
     mails which is described in paragraph (2) is nonmailable 
     matter, shall not be carried or delivered by mail, and shall 
     be disposed of as the Postal Service directs.
       ``(2) Matter described in this paragraph is any matter 
     that--
       ``(A) constitutes a solicitation for the purchase of or 
     payment for any product or service that--
       ``(i) is provided by the Federal Government; and
       ``(ii) may be obtained without cost from the Federal 
     Government; and
       ``(B) does not contain a clear and conspicuous statement 
     giving notice of the information set forth in clauses (i) and 
     (ii) of subparagraph (A).''.

     SEC. 3. RESTRICTIONS ON SWEEPSTAKES AND DECEPTIVE MAILINGS.

       Section 3001 of title 39, United States Code, is amended by 
     inserting after subsection (j) (as added by section 2(4) of 
     this Act) the following:
       ``(k)(1) In this subsection--
       ``(A) the term `clearly and conspicuously displayed' means 
     presented in a manner that is readily noticeable, readable, 
     and understandable to the group to whom the applicable matter 
     is disseminated;
       ``(B) the term `facsimile check' means any matter that--
       ``(i) is designed to resemble a check or other negotiable 
     instrument; but

[[Page 27892]]

       ``(ii) is not negotiable;
       ``(C) the term `skill contest' means a puzzle, game, 
     competition, or other contest in which--
       ``(i) a prize is awarded or offered;
       ``(ii) the outcome depends predominately on the skill of 
     the contestant; and
       ``(iii) a purchase, payment, or donation is required or 
     implied to be required to enter the contest; and
       ``(D) the term `sweepstakes' means a game of chance for 
     which no consideration is required to enter.
       ``(2) Except as provided in paragraph (4), any matter 
     otherwise legally acceptable in the mails which is described 
     in paragraph (3) is nonmailable matter, shall not be carried 
     or delivered by mail, and shall be disposed of as the Postal 
     Service directs.
       ``(3) Matter described in this paragraph is any matter 
     that--
       ``(A)(i) includes entry materials for a sweepstakes or a 
     promotion that purports to be a sweepstakes; and
       ``(ii)(I) does not contain a statement that discloses in 
     the mailing, in the rules, and on the order or entry form, 
     that no purchase is necessary to enter such sweepstakes;
       ``(II) does not contain a statement that discloses in the 
     mailing, in the rules, and on the order or entry form, that a 
     purchase will not improve an individual's chances of winning 
     with such entry;
       ``(III) does not state all terms and conditions of the 
     sweepstakes promotion, including the rules and entry 
     procedures for the sweepstakes;
       ``(IV) does not disclose the sponsor or mailer of such 
     matter and the principal place of business or an address at 
     which the sponsor or mailer may be contacted;
       ``(V) does not contain sweepstakes rules that state--
       ``(aa) the estimated odds of winning each prize;
       ``(bb) the quantity, estimated retail value, and nature of 
     each prize; and
       ``(cc) the schedule of any payments made over time;
       ``(VI) represents that individuals not purchasing products 
     or services may be disqualified from receiving future 
     sweepstakes mailings;
       ``(VII) requires that a sweepstakes entry be accompanied by 
     an order or payment for a product or service previously 
     ordered;
       ``(VIII) represents that an individual is a winner of a 
     prize unless that individual has won such prize; or
       ``(IX) contains a representation that contradicts, or is 
     inconsistent with sweepstakes rules or any other disclosure 
     required to be made under this subsection, including any 
     statement qualifying, limiting, or explaining the rules or 
     disclosures in a manner inconsistent with such rules or 
     disclosures;
       ``(B)(i) includes entry materials for a skill contest or a 
     promotion that purports to be a skill contest; and
       ``(ii)(I) does not state all terms and conditions of the 
     skill contest, including the rules and entry procedures for 
     the skill contest;
       ``(II) does not disclose the sponsor or mailer of the skill 
     contest and the principal place of business or an address at 
     which the sponsor or mailer may be contacted; or
       ``(III) does not contain skill contest rules that state, as 
     applicable--
       ``(aa) the number of rounds or levels of the contest and 
     the cost to enter each round or level;
       ``(bb) that subsequent rounds or levels will be more 
     difficult to solve;
       ``(cc) the maximum cost to enter all rounds or levels;
       ``(dd) the estimated number or percentage of entrants who 
     may correctly solve the skill contest or the approximate 
     number or percentage of entrants correctly solving the past 3 
     skill contests conducted by the sponsor;
       ``(ee) the identity or description of the qualifications of 
     the judges if the contest is judged by other than the 
     sponsor;
       ``(ff) the method used in judging;
       ``(gg) the date by which the winner or winners will be 
     determined and the date or process by which prizes will be 
     awarded;
       ``(hh) the quantity, estimated retail value, and nature of 
     each prize; and
       ``(ii) the schedule of any payments made over time; or
       ``(C) includes any facsimile check that does not contain a 
     statement on the check itself that such check is not a 
     negotiable instrument and has no cash value.
       ``(4) Matter that appears in a magazine, newspaper, or 
     other periodical shall be exempt from paragraph (2) if such 
     matter--
       ``(A) is not directed to a named individual; or
       ``(B) does not include an opportunity to make a payment or 
     order a product or service.
       ``(5) Any statement, notice, or disclaimer required under 
     paragraph (3) shall be clearly and conspicuously displayed. 
     Any statement, notice, or disclaimer required under subclause 
     (I) or (II) of paragraph (3)(A)(ii) shall be displayed more 
     conspicuously than would otherwise be required under the 
     preceding sentence.
       ``(6) In the enforcement of paragraph (3), the Postal 
     Service shall consider all of the materials included in the 
     mailing and the material and language on and visible through 
     the envelope or outside cover or wrapper in which those 
     materials are mailed.
       ``(l)(1) Any person who uses the mails for any matter to 
     which subsection (h), (i), (j), or (k) applies shall adopt 
     reasonable practices and procedures to prevent the mailing of 
     such matter to any person who, personally or through a 
     conservator, guardian, or individual with power of attorney--
       ``(A) submits to the mailer of such matter a written 
     request that such matter should not be mailed to such person; 
     or
       ``(B)(i) submits such a written request to the attorney 
     general of the appropriate State (or any State government 
     officer who transmits the request to that attorney general); 
     and
       ``(ii) that attorney general transmits such request to the 
     mailer.
       ``(2) Any person who mails matter to which subsection (h), 
     (i), (j), or (k) applies shall maintain or cause to be 
     maintained a record of all requests made under paragraph (1). 
     The records shall be maintained in a form to permit the 
     suppression of an applicable name at the applicable address 
     for a 5-year period beginning on the date the written request 
     under paragraph (1) is submitted to the mailer.''.

     SEC. 4. POSTAL SERVICE ORDERS TO PROHIBIT DECEPTIVE MAILINGS.

       Section 3005(a) of title 39, United States Code, is 
     amended--
       (1) by striking ``or'' after ``(h),'' each place it 
     appears; and
       (2) by inserting ``, (j), or (k)'' after ``(i)'' each place 
     it appears.

     SEC. 5. TEMPORARY RESTRAINING ORDER FOR DECEPTIVE MAILINGS.

       (a) In General.--Section 3007 of title 39, United States 
     Code, is amended--
       (1) by redesignating subsection (b) as subsection (c); and
       (2) by striking subsection (a) and inserting the following:
       ``(a)(1) In preparation for or during the pendency of 
     proceedings under section 3005, the Postal Service may, under 
     the provisions of section 409(d), apply to the district court 
     in any district in which mail is sent or received as part of 
     the alleged scheme, device, lottery, gift enterprise, 
     sweepstakes, skill contest, or facsimile check or in any 
     district in which the defendant is found, for a temporary 
     restraining order and preliminary injunction under the 
     procedural requirements of rule 65 of the Federal Rules of 
     Civil Procedure.
       ``(2)(A) Upon a proper showing, the court shall enter an 
     order which shall--
       ``(i) remain in effect during the pendency of the statutory 
     proceedings, any judicial review of such proceedings, or any 
     action to enforce orders issued under the proceedings; and
       ``(ii) direct the detention by the postmaster, in any and 
     all districts, of the defendant's incoming mail and outgoing 
     mail, which is the subject of the proceedings under section 
     3005.
       ``(B) A proper showing under this paragraph shall require 
     proof of a likelihood of success on the merits of the 
     proceedings under section 3005.
       ``(3) Mail detained under paragraph (2) shall--
       ``(A) be made available at the post office of mailing or 
     delivery for examination by the defendant in the presence of 
     a postal employee; and
       ``(B) be delivered as addressed if such mail is not clearly 
     shown to be the subject of proceedings under section 3005.
       ``(4) No finding of the defendant's intent to make a false 
     representation or to conduct a lottery is required to support 
     the issuance of an order under this section.
       ``(b) If any order is issued under subsection (a) and the 
     proceedings under section 3005 are concluded with the 
     issuance of an order under that section, any judicial review 
     of the matter shall be in the district in which the order 
     under subsection (a) was issued.''.
       (b) Repeal.--
       (1) In general.--Section 3006 of title 39, United States 
     Code, and the item relating to such section in the table of 
     sections for chapter 30 of such title are repealed.
       (2) Conforming amendments.--(A) Section 3005(c) of title 
     39, United States Code, is amended by striking ``section and 
     section 3006 of this title,'' and inserting ``section,''.
       (B) Section 3011(e) of title 39, United States Code, is 
     amended by striking ``3006, 3007,'' and inserting ``3007''.

     SEC. 6. CIVIL PENALTIES AND COSTS.

       Section 3012 of title 39, United States Code, is amended--
       (1) in subsection (a) by striking ``$10,000 for each day 
     that such person engages in conduct described by paragraph 
     (1), (2), or (3) of this subsection.'' and inserting 
     ``$50,000 for each mailing of less than 50,000 pieces; 
     $100,000 for each mailing of 50,000 to 100,000 pieces; with 
     an additional $10,000 for each additional 10,000 pieces above 
     100,000, not to exceed $2,000,000.'';
       (2) in paragraphs (1) and (2) of subsection (b) by 
     inserting after ``of subsection (a)'' the following: ``, (c), 
     or (d)'';
       (3) by redesignating subsections (c) and (d), as 
     subsections (e) and (f), respectively; and
       (4) by inserting after subsection (b) the following:
       ``(c)(1) In any proceeding in which the Postal Service may 
     issue an order under section 3005(a), the Postal Service may 
     in lieu of

[[Page 27893]]

     that order or as part of that order assess civil penalties in 
     an amount not to exceed $25,000 for each mailing of less than 
     50,000 pieces; $50,000 for each mailing of 50,000 to 100,000 
     pieces; with an additional $5,000 for each additional 10,000 
     pieces above 100,000, not to exceed $1,000,000.
       ``(2) In any proceeding in which the Postal Service 
     assesses penalties under this subsection the Postal Service 
     shall determine the civil penalty taking into account the 
     nature, circumstances, extent, and gravity of the violation 
     or violations of section 3005(a), and with respect to the 
     violator, the ability to pay the penalty, the effect of the 
     penalty on the ability of the violator to conduct lawful 
     business, any history of prior violations of such section, 
     the degree of culpability and other such matters as justice 
     may require.
       ``(d) Any person who violates section 3001(l) shall be 
     liable to the United States for a civil penalty not to exceed 
     $10,000 for each mailing to an individual.''.

     SEC. 7. ADMINISTRATIVE SUBPOENAS.

       (a) In General.--Chapter 30 of title 39, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 3016. Administrative subpoenas

       ``(a) Subpoena Authority.--
       ``(1) Investigations.--
       ``(A) In general.--In any investigation conducted under 
     section 3005(a), the Postmaster General may require by 
     subpoena the production of any records (including books, 
     papers, documents, and other tangible things which constitute 
     or contain evidence) which the Postmaster General considers 
     relevant or material to such investigation.
       ``(B) Condition.--No subpoena shall be issued under this 
     paragraph except in accordance with procedures, established 
     by the Postal Service, requiring that--
       ``(i) a specific case, with an individual or entity 
     identified as the subject, be opened before a subpoena is 
     requested;
       ``(ii) appropriate supervisory and legal review of a 
     subpoena request be performed; and
       ``(iii) delegation of subpoena approval authority be 
     limited to the Postal Service's General Counsel or a Deputy 
     General Counsel.
       ``(2) Statutory proceedings.--In any statutory proceeding 
     conducted under section 3005(a), the Judicial Officer may 
     require by subpoena the attendance and testimony of witnesses 
     and the production of any records (including books, papers, 
     documents, and other tangible things which constitute or 
     contain evidence) which the Judicial Officer considers 
     relevant or material to such proceeding.
       ``(3) Rule of construction.--Nothing in paragraph (2) shall 
     be considered to apply in any circumstance to which paragraph 
     (1) applies.
       ``(b) Service.--
       ``(1) Service within the united states.--A subpoena issued 
     under this section may be served by a person designated under 
     section 3061 of title 18 at any place within the territorial 
     jurisdiction of any court of the United States.
       ``(2) Foreign service.--Any such subpoena may be served 
     upon any person who is not to be found within the territorial 
     jurisdiction of any court of the United States, in such 
     manner as the Federal Rules of Civil Procedure prescribe for 
     service in a foreign country. To the extent that the courts 
     of the United States may assert jurisdiction over such person 
     consistent with due process, the United States District Court 
     for the District of Columbia shall have the same jurisdiction 
     to take any action respecting compliance with this section by 
     such person that such court would have if such person were 
     personally within the jurisdiction of such court.
       ``(3) Service on business persons.--Service of any such 
     subpoena may be made upon a partnership, corporation, 
     association, or other legal entity by--
       ``(A) delivering a duly executed copy thereof to any 
     partner, executive officer, managing agent, or general agent 
     thereof, or to any agent thereof authorized by appointment or 
     by law to receive service of process on behalf of such 
     partnership, corporation, association, or entity;
       ``(B) delivering a duly executed copy thereof to the 
     principal office or place of business of the partnership, 
     corporation, association, or entity; or
       ``(C) depositing such copy in the United States mails, by 
     registered or certified mail, return receipt requested, duly 
     addressed to such partnership, corporation, association, or 
     entity at its principal office or place of business.
       ``(4) Service on natural persons.--Service of any subpoena 
     may be made upon any natural person by--
       ``(A) delivering a duly executed copy to the person to be 
     served; or
       ``(B) depositing such copy in the United States mails, by 
     registered or certified mail, return receipt requested, duly 
     addressed to such person at his residence or principal office 
     or place of business.
       ``(5) Verified return.--A verified return by the individual 
     serving any such subpoena setting forth the manner of such 
     service shall be proof of such service. In the case of 
     service by registered or certified mail, such return shall be 
     accompanied by the return post office receipt of delivery of 
     such subpoena.
       ``(c) Enforcement.--
       ``(1) In general.--Whenever any person, partnership, 
     corporation, association, or entity fails to comply with any 
     subpoena duly served upon him, the Postmaster General may 
     request that the Attorney General seek enforcement of the 
     subpoena in the district court of the United States for any 
     judicial district in which such person resides, is found, or 
     transacts business, and serve upon such person a petition for 
     an order of such court for the enforcement of this section.
       ``(2) Jurisdiction.--Whenever any petition is filed in any 
     district court of the United States under this section, such 
     court shall have jurisdiction to hear and determine the 
     matter so presented, and to enter such order or orders as may 
     be required to carry into effect the provisions of this 
     section. Any final order entered shall be subject to appeal 
     under section 1291 of title 28. Any disobedience of any final 
     order entered under this section by any court may be punished 
     as contempt.
       ``(d) Disclosure.--Any documentary material provided 
     pursuant to any subpoena issued under this section shall be 
     exempt from disclosure under section 552 of title 5.''.
       (b) Regulations.--Not later than 120 days after the date of 
     enactment of this section, the Postal Service shall 
     promulgate regulations setting out the procedures the Postal 
     Service will use to implement the amendment made by 
     subsection (a).
       (c) Semiannual Reports.--Section 3013 of title 39, United 
     States Code, is amended by striking ``and'' at the end of 
     paragraph (4), by redesignating paragraph (5) as paragraph 
     (6), and by inserting after paragraph (4) the following:
       ``(5) the number of cases in which the authority described 
     in section 3016 was used, and a comprehensive statement 
     describing how that authority was used in each of those 
     cases; and''.
       (d) Technical and Conforming Amendment.--The table of 
     sections for chapter 30 of title 39, United States Code, is 
     amended by adding at the end the following:

``3016. Administrative subpoenas.''.

     SEC. 8. REQUIREMENTS OF PROMOTERS OF SKILL CONTESTS OR 
                   SWEEPSTAKES MAILINGS.

       (a) In General.--Chapter 30 of title 39, United States Code 
     (as amended by section 7 of this Act) is amended by adding 
     after section 3016 the following:

     ``Sec. 3017. Nonmailable skill contests or sweepstakes 
       matter; notification to prohibit mailings

       ``(a) Definitions.--In this section--
       ``(1) the term `promoter' means any person who--
       ``(A) originates and mails any skill contest or 
     sweepstakes, except for any matter described in section 
     3001(k)(4); or
       ``(B) originates and causes to be mailed any skill contest 
     or sweepstakes, except for any matter described in section 
     3001(k)(4);
       ``(2) the term `removal request' means a request stating 
     that an individual elects to have the name and address of 
     such individual excluded from any list used by a promoter for 
     mailing skill contests or sweepstakes;
       ``(3) the terms `skill contest', `sweepstakes', and 
     `clearly and conspicuously displayed' have the same meanings 
     as given them in section 3001(k); and
       ``(4) the term `duly authorized person', as used in 
     connection with an individual, means a conservator or 
     guardian of, or person granted power of attorney by, such 
     individual.
       ``(b) Nonmailable Matter.--
       ``(1) In general.--Matter otherwise legally acceptable in 
     the mails described in paragraph (2)--
       ``(A) is nonmailable matter;
       ``(B) shall not be carried or delivered by mail; and
       ``(C) shall be disposed of as the Postal Service directs.
       ``(2) Nonmailable matter described.--Matter described in 
     this paragraph is any matter that--
       ``(A) is a skill contest or sweepstakes, except for any 
     matter described in section 3001(k)(4); and
       ``(B)(i) is addressed to an individual who made an election 
     to be excluded from lists under subsection (d); or
       ``(ii) does not comply with subsection (c)(1).
       ``(c) Requirements of Promoters.--
       ``(1) Notice to individuals.--Any promoter who mails a 
     skill contest or sweepstakes shall provide with each mailing 
     a statement that--
       ``(A) is clearly and conspicuously displayed;
       ``(B) includes the address or toll-free telephone number of 
     the notification system established under paragraph (2); and
       ``(C) states that the notification system may be used to 
     prohibit the mailing of all skill contests or sweepstakes by 
     that promoter to such individual.
       ``(2) Notification system.--Any promoter that mails or 
     causes to be mailed a skill contest or sweepstakes shall 
     establish and maintain a notification system that provides 
     for any individual (or other duly authorized person) to 
     notify the system of the individual's election to have the 
     name and address of the individual excluded from all lists of 
     names and addresses used by that promoter to mail any skill 
     contest or sweepstakes.

[[Page 27894]]

       ``(d) Election To Be Excluded From Lists.--
       ``(1) In general.--An individual (or other duly authorized 
     person) may elect to exclude the name and address of that 
     individual from all lists of names and addresses used by a 
     promoter of skill contests or sweepstakes by submitting a 
     removal request to the notification system established under 
     subsection (c).
       ``(2) Response after submitting removal request to the 
     notification system.--Not later than 60 calendar days after a 
     promoter receives a removal request pursuant to an election 
     under paragraph (1), the promoter shall exclude the 
     individual's name and address from all lists of names and 
     addresses used by that promoter to select recipients for any 
     skill contest or sweepstakes.
       ``(3) Effectiveness of election.--An election under 
     paragraph (1) shall remain in effect, unless an individual 
     (or other duly authorized person) notifies the promoter in 
     writing that such individual--
       ``(A) has changed the election; and
       ``(B) elects to receive skill contest or sweepstakes 
     mailings from that promoter.
       ``(e) Private Right of Action.--
       ``(1) In general.--An individual who receives one or more 
     mailings in violation of subsection (d) may, if otherwise 
     permitted by the laws or rules of court of a State, bring in 
     an appropriate court of that State--
       ``(A) an action to enjoin such violation,
       ``(B) an action to recover for actual monetary loss from 
     such a violation, or to receive $500 in damages for each such 
     violation, whichever is greater, or
       ``(C) both such actions.
     It shall be an affirmative defense in any action brought 
     under this subsection that the defendant has established and 
     implemented, with due care, reasonable practices and 
     procedures to effectively prevent mailings in violation of 
     subsection (d). If the court finds that the defendant 
     willfully or knowingly violated subsection (d), the court 
     may, in its discretion, increase the amount of the award to 
     an amount equal to not more than 3 times the amount available 
     under subparagraph (B).
       ``(2) Action allowable based on other sufficient notice.--A 
     mailing sent in violation of section 3001(l) shall be 
     actionable under this subsection, but only if such an action 
     would not also be available under paragraph (1) (as a 
     violation of subsection (d)) based on the same mailing.
       ``(f) Promoter Nonliability.--A promoter shall not be 
     subject to civil liability for the exclusion of an 
     individual's name or address from any list maintained by that 
     promoter for mailing skill contests or sweepstakes, if--
       ``(1) a removal request is received by the promoter's 
     notification system; and
       ``(2) the promoter has a good faith belief that the request 
     is from--
       ``(A) the individual whose name and address is to be 
     excluded; or
       ``(B) another duly authorized person.
       ``(g) Prohibition on Commercial Use of Lists.--
       ``(1) In general.--
       ``(A) Prohibition.--No person may provide any information 
     (including the sale or rental of any name or address) derived 
     from a list described in subparagraph (B) to another person 
     for commercial use.
       ``(B) Lists.--A list referred to under subparagraph (A) is 
     any list of names and addresses (or other related 
     information) compiled from individuals who exercise an 
     election under subsection (d).
       ``(2) Civil penalty.--Any person who violates paragraph (1) 
     shall be assessed a civil penalty by the Postal Service not 
     to exceed $2,000,000 per violation.
       ``(h) Civil Penalties.--
       ``(1) In general.--Any promoter--
       ``(A) who recklessly mails nonmailable matter in violation 
     of subsection (b) shall be liable to the United States in an 
     amount of $10,000 per violation for each mailing to an 
     individual of nonmailable matter; or
       ``(B) who fails to comply with the requirements of 
     subsection (c)(2) shall be liable to the United States.
       ``(2) Enforcement.--The Postal Service shall, in accordance 
     with the same procedures as set forth in section 3012(b), 
     provide for the assessment of civil penalties under this 
     section.''.
       (b) Technical and Conforming Amendments.--The table of 
     sections for chapter 30 of title 39, United States Code, is 
     amended by adding after the item relating to section 3016 the 
     following:

``3017. Nonmailable skill contests or sweepstakes matter; notification 
              to prohibit mailings.''.
       (c) Effective Date.--This section shall take effect 1 year 
     after the date of enactment of this Act.

     SEC. 9. STATE LAW NOT PREEMPTED.

       (a) In General.--Nothing in the provisions of this Act 
     (including the amendments made by this Act) or in the 
     regulations promulgated under such provisions shall be 
     construed to preempt any provision of State or local law that 
     imposes more restrictive requirements, regulations, damages, 
     costs, or penalties. No determination by the Postal Service 
     that any particular piece of mail or class of mail is in 
     compliance with such provisions of this Act shall be 
     construed to preempt any provision of State or local law.
       (b) Effect on State Court Proceedings.--Nothing contained 
     in this section shall be construed to prohibit an authorized 
     State official from proceeding in State court on the basis of 
     an alleged violation of any general civil or criminal statute 
     of such State or any specific civil or criminal statute of 
     such State.

     SEC. 10. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) References to Repealed Provisions.--Section 3001(a) of 
     title 39, United States Code, is amended by striking 
     ``1714,'' and ``1718,''.
       (b) Conformance With Inspector General Act of 1978.--
       (1) In general.--Section 3013 of title 39, United States 
     Code, is amended--
       (A) by striking ``Board'' each place it appears and 
     inserting ``Inspector General'';
       (B) in the third sentence by striking ``Each such report 
     shall be submitted within sixty days after the close of the 
     reporting period involved'' and inserting ``Each such report 
     shall be submitted within 1 month (or such shorter length of 
     time as the Inspector General may specify) after the close of 
     the reporting period involved''; and
       (C) by striking the last sentence and inserting the 
     following:
     ``The information in a report submitted under this section to 
     the Inspector General with respect to a reporting period 
     shall be included as part of the semiannual report prepared 
     by the Inspector General under section 5 of the Inspector 
     General Act of 1978 for the same reporting period. Nothing in 
     this section shall be considered to permit or require that 
     any report by the Postmaster General under this section 
     include any information relating to activities of the 
     Inspector General.''.
       (2) Effective date.--This subsection shall take effect on 
     the date of enactment of this Act, and the amendments made by 
     this subsection shall apply with respect to semiannual 
     reporting periods beginning on or after such date of 
     enactment.
       (3) Savings provision.--For purposes of any semiannual 
     reporting period preceding the first semiannual reporting 
     period referred to in paragraph (2), the provisions of title 
     39, United States Code, shall continue to apply as if the 
     amendments made by this subsection had not been enacted.

     SEC. 11. EFFECTIVE DATE.

       Except as provided in section 8 or 10(b), this Act shall 
     take effect 120 days after the date of enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. McHugh) and the gentleman from Illinois (Mr. Davis) each will 
control 20 minutes.
  The Chair recognizes the gentleman from New York (Mr. McHugh).


                             General Leave

  Mr. McHUGH. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on H.R. 170, the bill now under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am pleased to bring H.R. 170, as amended, to the floor 
today and would like to take this opportunity to thank the members of 
my Subcommittee on the Postal Service for their interest, for their 
hard work in moving this important legislation, particularly thanking 
the ranking member, the gentleman from Pennsylvania (Mr. Fattah), for 
his input in making this bill stronger and of a wider appeal.
  Mr. Speaker, I would like to also quote from the testimony of the 
General Accounting Office at the subcommittee's August 14 meeting, 
which I think summed it up very well, ``When it comes to deceptive 
mail, which includes sweepstakes and other kinds of mail material,'' 
quote, ``consumers' problems appear substantial.''
  We are all concerned, Mr. Speaker, with the way sweepstakes mailings 
entice customers, particularly senior citizens, into making unwanted 
purchases under the mistaken impression that this will somehow enhance 
their chances of winning.
  As I have stated previously, sweepstakes in and of themselves are not 
evil. In fact, Mr. Speaker, they are often a marketing tool that are 
accessed by willing and very satisfied individuals, but experience 
teaches us that when laws fall short, the dishonest often flock and 
people ultimately will suffer. Now is the time to correct these 
shortfalls.
  H.R. 170, as amended, was carefully developed with our ranking 
member,

[[Page 27895]]

the gentleman from Pennsylvania (Mr. Fattah), and the bill's original 
author, the gentleman from New Jersey (Mr. LoBiondo). In keeping with 
H.R. 170's objective of ensuring honesty in sweepstakes mailing, the 
amended language incorporates and responds to the extensive testimony 
submitted at the hearing conducted by the Subcommittee on the Postal 
Service.
  The gentleman from New Jersey (Mr. LoBiondo) is to be commended for 
championing the necessary changes to our postal laws in this area, and 
I also, Mr. Speaker, deeply appreciate the assistance of our other 
colleagues; as I mentioned earlier, the gentleman from Pennsylvania 
(Mr. Fattah), the ranking member, but as well the language in this bill 
reflects the input of others who also introduced legislation, including 
the gentleman from California (Mr. Rogan), the gentleman from Florida 
(Mr. McCollum), authors of H.R. 237 and H.R. 2678 respectively.
  This language is also based upon Senator Susan Collins' comprehensive 
bipartisan sweepstakes mailing legislation, which passed in the other 
body by a 93-to-0 vote on August 2. We certainly are indebted to Ms. 
Collins and to her staff and the other members of the other body for 
their interest, for their leadership, and for their guidance.
  Mr. Speaker, we have drawn from many sources to craft what I believe 
is a reasonably balanced and effective piece of legislation. H.R. 170, 
as amended, would establish strong consumer protections to prevent a 
number of types of deceptive mailings. It would impose various 
requirements on sweepstakes mailings, skills contests, facsimile checks 
and mailings made to look like government documents. It would establish 
as well strong financial penalties, provide the Postal Service with 
additional authority to investigate and stop deceptive mailings and 
preserve the ability of States to impose stricter requirements on such 
mailings.
  Mr. Speaker, I would strongly encourage all Members to fully support 
the legislation before us. We should join with the other body in 
advancing this important cause. America's consumers, particularly our 
senior citizens, are counting on us.
  Mr. Speaker, I reserve the balance of my time.
  Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, let me first of all commend and congratulate the 
gentleman from New York (Chairman McHugh), and the ranking member, the 
gentleman from Pennsylvania (Mr. Fattah) for the very efficient, 
effective and bipartisan manner in which they have shepherded this 
legislation through committee.
  I also want to commend the gentleman from New Jersey (Mr. LoBiondo) 
for the significant role that he played in making sure that we had a 
good, strong bill and that we have it before us today.
  As a member of the Subcommittee on the Postal Service, I am pleased 
to join the gentleman from New York (Mr. McHugh) in the consideration 
of H.R. 170, the Honesty in Sweepstakes Act of 1999. When signed into 
law, the legislation will protect vulnerable consumers from 
unscrupulous operators of deceptive sweepstakes and stop many of the 
more abusive practices of the sweepstakes industry.
  We in the Congress have learned firsthand the financial and emotional 
costs to consumers from deceptive and fraudulent sweepstakes. This is a 
serious problem which plagues our elderly and those on limited budgets. 
To that end, I am proud to have played a part in the House 
consideration and markup of the Honesty in Sweepstakes Act of 1999.
  Last month, the Subcommittee on the Postal Service marked up H.R. 170 
and unanimously approved an amendment in the nature of a substitute 
offered by the ranking minority member, the gentleman from Pennsylvania 
(Mr. Fattah) and the gentleman from New York (Mr. McHugh).
  Our bill, which closely mirrors sweepstakes legislation passed by the 
Senate in August, would impose disclosure requirements relating to 
sweepstakes mailings and skill contests, contests in which a prize is 
awarded based on skill and a purchase payment or donation is required, 
concerning rules, terms, conditions, sponsor, place of business of 
sponsor, odds of winning and other information, to help ensure the 
consumer has complete information about the contest.
  It also prohibits mailings that suggest a connection to the Federal 
Government or that contain false representations implying that Federal 
Government benefits or services will be affected by participation or 
nonparticipation in the contest. It requires that copies of checks sent 
in any mailing must include a statement on the check itself stating 
that it is nonnegotiable and has no cash value. It requires certain 
disclosures to be clearly and conspicuously displayed in certain parts 
of the sweepstakes and skill contest promotion. It requires sweepstakes 
companies to maintain individual do-not-mail lists and it gives the 
Postal Service additional enforcement tools to maintain and investigate 
and stop deceptive mailings, including the authority to impose civil 
penalties and subpoenas.
  The measure before us today adds two very important and critical 
provisions. First, we provide the Postal Service with subpoena 
authority to combat sweepstakes fraud and, in addition, we have limited 
the scope of subpoena authority to only those provisions of law 
addressing deceptive mailings and required the Postal Service to 
develop procedures for the issuance of subpoenas. So the issue of 
consumer protection, whether it relates to telemarketing fraud or 
sweepstakes deception, is finally receiving the attention it deserves 
and I am pleased that we are here today at this point and at this time 
to pass this important legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McHUGH. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from 
New Jersey (Mr. LoBIONDO) who, as I mentioned during my opening 
remarks, was really a leader in this effort. Through his initiative, in 
fact, the question was first brought to the attention of our 
subcommittee last year and, in large measure, this is a product of his 
efforts.
  Mr. LoBIONDO. Mr. Speaker, let me take a moment to first thank my 
colleague from New York (Mr. McHUGH) for his leadership with the 
subcommittee and particularly on this issue. The hearing that was held 
really focused in on the problem, I think, in a very specific way and 
it allowed us to convince many of our colleagues of the importance of 
this issue.
  I want to thank the gentleman from Indiana (Mr. Burton), the chairman 
of the full committee, and the gentleman from Illinois (Mr. Davis) and 
the gentleman from Pennsylvania (Mr. Fattah) for their help, and my 
colleague, the gentleman from California (Mr. Condit), for his help in 
garnering votes from the other side and support from the other side.
  Mr. Speaker, thousands, if not millions, of Americans will receive 
some sweepstakes mailing today. Most people disregard these mailings as 
the marketing ploy that they are. Unfortunately, there are a small 
percentage of consumers who will open the package with excitement and 
carefully return the enclosures, often with a payment, in the hope of 
becoming America's latest millionaire.
  Most likely to be impacted by these fraudulent and misleading 
mailings are some of the most vulnerable in our society, our senior 
citizens. Sadly, these vulnerable consumers are not being duped merely 
into entering a hopeless contest. They are, in fact, encouraged to 
purchase goods from these sweepstakes companies in the thought that 
these purchases will give them a better chance of winning a huge sum of 
money.
  For seniors, most of whom are on a fixed income, this frivolous 
spending in the hope of winning untold riches is having an especially 
detrimental effect. There are stories that abound of life savings being 
lost, of seniors whose lives are devastated because they feel that they 
have had an opportunity to gain an advantage in a sweepstakes that was 
never there from the beginning.

[[Page 27896]]

  My legislation will prohibit many tactics sweepstakes company use to 
prey on our most vulnerable consumers. Misleading language such as ``we 
would feel better if we were giving the prize to a customer'' leads 
people to believe that a purchase enhances the chances of winning, when 
it really does not. My bill takes significant steps to prevent 
vulnerable members of our society from being harmed by predatory 
sweepstakes companies.
  The key provision of H.R. 170 requires that certain clear and easy-
to-read honesty disclosures be included in each sweepstakes mailing.

                              {time}  1330

  First, each mailing must include language stating that purchase is 
not necessary to win a prize, nor does it enhance the chances of 
winning a prize. It additionally requires other important information 
such as the odds of winning the grand prize to be displayed prominently 
in the mailing.
  The bill would further crack down on cashier's checks and government 
document look-alikes, which obviously confuse many seniors and have to 
lead us to conclude it was the intention to mislead and confuse 
seniors.
  So in conclusion, I want to thank all of my colleagues who worked so 
hard on this. I think we have a chance to make a real difference today 
with those in our society who have been the recipients of tactics that 
all of us wish we could change. We can change that today with this 
legislation.
  Again, I urge all my colleagues to support H.R. 170.
  Mr. DAVIS of Illinois. Mr. Speaker, I yield such time as she might 
consume to the gentlewoman from New York (Ms. Slaughter), who has long 
been a protector of consumer interests and consumer rights.
  Ms. SLAUGHTER. Mr. Speaker, I certainly thank the gentleman from 
Illinois (Mr. Davis) for allowing me to speak, and I appreciate his 
support.
  I want to thank the gentleman from New Jersey (Mr. LoBiondo) for 
bringing this to the floor and the gentleman from New York (Mr. McHugh) 
for his support.
  Just take a look at this. Right here, it says up at the top, 
``Attention: Time-sensitive material. Contents to be opened by 
addressee only. Obstruction of U.S. mail punishable by fines up to 
$2,000 and 5 years imprisonment.''
  Now, imagine, one gets this envelope, which looks very much like the 
one one's Social Security check comes in, and it has everything in the 
world to make it look like it came from the government. Official 
communication, it says up there. Extremely urgent. Respond within 5 
business days.
  Then over on the back, again, it says, ``Documents enclosed intended 
for the sole use of the addressee. Tampering is a Federal offense.''
  This chart has been enlarged 4,000 times, and it is still barely 
readable. The fact that everybody, as the gentleman from New Jersey 
(Mr. LoBiondo) said, is getting one of these almost every day in the 
mail is really a scandal. We know they are designed to confuse and 
mislead the recipients.
  Virginia Tierney from the AARP pointed out in her testimony that 
these deceptive sweepstakes lead older Americans to send in thousands 
of dollars from their Social Security checks and lifetime savings 
because they believe what is often also written on here, ``you have 
automatically won.''
  But I want to focus a specific provision of this bill that addresses 
a strong concern of mine, and that is what I just pointed out, that 
this mail looks as though it has been distributed or endorsed by a 
government agency.
  The companies are sending these facsimile checks usually in window 
envelopes that are specifically designed to look like the Social 
Security envelope. This government look-alike mail motivates the senior 
to at least open the envelope.
  I did not hear about this deceptive mailing practice from my 
constituents because my colleagues may notice that this was addressed 
to me, this official communication, which I tampered with at my peril.
  Now, in very small print back here on the back of the envelope going 
on for 33 lines is the official rules detailing that this is in reality 
a sweepstakes solicitation. It is not a private government document 
carrying great threats. How dare they usurp government authority in an 
attempt to frighten people.
  I have to be honest, I got dizzy counting the number of lines the 
small print goes on for. That was because I had tried to read this 
before it was enlarged. A senior citizen would have to enlarge this 
envelope to poster size like I did before they could read this small 
print.
  This bill would close the loophole and prohibit all mailings that 
could reasonably look like government documents in any way, shape, or 
form, period. Sweepstakes companies need to stop misleading the 
American people, especially our seniors.
  It is past time that the House of Representatives votes to stop these 
deceptive mailings, and I am more than delighted that this bill has 
come to the floor.
  Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as I mentioned to the gentleman from New Jersey (Mr. 
LoBiondo), the author, and ratified in my comments, we have had a 
number of individuals who were early on supporters of this initiative 
who had drafted their own approaches from which we drew not just moral 
support, but legislative language and approaches to the bill.
  Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from 
Florida (Mr. McCollum), an individual who has established in this House 
a well-deserved reputation as a student of the law and one who had a 
great deal of input and we had a great deal assistance from.
  Mr. McCOLLUM. Mr. Speaker, I really appreciate the gentleman from New 
York (Mr. McHugh) for his work on this bill and bringing it to the 
floor, and obviously the gentleman from New Jersey (Mr. LoBiondo) for 
introducing it.
  I do support the bill. It will reform, as we all know, the deceptive 
sweepstakes mailing and establish consumer protections through 
financial penalties and by providing the Postal Service with additional 
authority to investigate and stop such deceptive mailings. It will also 
allow States to impose stricter requirements as they see fit on such 
mailings.
  We have had a lot of this sort of thing going on in my State of 
Florida. We have heard so many of examples. One of them is Eustace Hall 
of Brandon, Florida who told a story of having spent thousands of 
dollars trying to win a contest to help his daughter pay for law 
school. Mr. Hall explained he did not understand there was no 
requirement that he make a purchase to enter the contest.
  That is just not right. I would like to think that, after this 
legislation is enacted, there will not be more cases like Mr. Hall that 
we see.
  We have been such a hotbed on this that I did introduce a bill that 
the gentleman from New York (Mr. McHugh) was referring to, called the 
Consumers Choice Sweepstakes Protection Act of 1999. It has been 
incorporated in this bill almost in toto.
  It is the legislation that would require that sweepstakes mailers 
provide a toll free number or mailing address to be used by individuals 
wishing to have their names removed from mailing lists or be subject to 
a civil fine of $1,000 per violation levied by the Postal Service. This 
legislation was endorsed by the 60 Plus Association and strongly 
supported by both the AARP and the National Consumers League.
  I want to again thank the gentleman from New York (Mr. McHugh), the 
chairman of the Subcommittee on Postal Service, and the gentleman from 
New Jersey (Mr. LoBiondo) in working with me today on this and to 
incorporate this into the bill before us.
  I really think what they are doing today in this legislation in H.R. 
170 is going to make a big difference in the sweepstakes issue. Most of 
us read these, and we do fine with it. We understand it. But there are 
a lot of people who flat out do not. Those who do not want to keep 
getting these mailings ought to have a chance to say do not send it, 
and especially the elderly and

[[Page 27897]]

their family when they do not want to see these things coming across so 
regularly as they do and the volumes that do.
  So I think the toll free number or the mailing address that is 
provided in the bill enhances it. Again, I want to thank the gentlemen 
for incorporating it in the bill.
  Mr. DAVIS of Illinois. Mr. Speaker, it is my pleasure to yield 3 
minutes to the gentleman from Texas (Mr. Green). It has been my 
experience that whenever there is an issue involving consumers and 
their protection and rights and the needs of the people, one would find 
the gentleman from Texas (Mr. Green).
  Mr. GREEN of Texas. Mr. Speaker, I would like to thank the gentleman 
from Illinois (Mr. Davis) for allowing me to speak today. This is 
something that is near and dear to each of our hearts as individuals.
  A few months ago, the daughter of one of my former constituents, her 
mother just passed away, came by our office and brought a box. She had 
been sorting through her mother's things. The box was easily bigger 
than the podium that I am standing at, Mr. Speaker. It was full of 
letter after letter from these sweepstakes promotors, offers for her 
mother.
  In each mailing was marked in bold print, ``You have won 10 Million 
Dollars'' or ``Urgent: Prize Claim Documentation Enclosed'' or ``Open 
and Return Immediately For Your Grand Prize.''
  Not only had this woman's mother opened each and every one of these 
solicitations, but she had fallen into that trap. She thought, due to 
the tricky and often misleading wording of the mailings that not only 
did she have to purchase something to win, but by purchasing items she 
would increase her chances of winning.
  This daughter found not only this box of information, but lots of 
little things that her mother had bought and literally never opened. 
Each time she responded, each time she bought some worthless 
knickknack, each time she thought it would finally pay off, all that 
would happen is more solicitations came in the mail. It was a vicious 
cycle. Because if one responds to one, then obviously they sell one's 
name to other people and other groups.
  This is a clear example how the sweepstakes industry has taken 
advantage and exploited some of our most vulnerable members of our 
society.
  I even have one family member in my district who tried to get their 
mother off the mailing list until, finally, they sent a letter saying, 
I am sorry, mom passed away, and it took them two times to do that, to 
get them to quit sending her sweepstakes information, just so she would 
stop receiving these awful offers and sending them in.
  H.R. 170, the Honesty in Sweepstakes Act, will ensure that the same 
bold print, not tiny print that one cannot read, will be used to state 
that one is not a winner and that purchasing items will not increase 
one's odds of winning.
  It would require that a toll free number be displayed prominently on 
the mailing. Those who wish to not receive these mailings will be able 
to call that number and be removed from the company's mailing list.
  It also provides for penalties for companies that violate or ignore 
these rules.
  This is a good bill that will help protect not only all Americans, 
but particularly older Americans, many of whom are spending significant 
portions of their income on these sucker contests. It will be 
especially helpful to family members who are care givers to our senior 
citizens. I hope my colleagues will vote for its passage.
  Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as we have heard here today, this bill obviously is 
addressing concerns that are faced by the entire country, but 
particularly among senior citizens. As we know, particularly when it 
comes to the State of New York, many of our seniors move to the south 
and often Florida. We have had a great deal of input and support by the 
Florida delegation on both sides of the aisle in this matter.
  Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from 
Florida (Mr. Foley), who has been very interested in this issue and 
very supportive.
  Mr. FOLEY. Mr. Speaker, let me thank the gentleman from New York (Mr. 
McHugh) for his leadership on this very important issue that affects 
seniors and affects all Floridians and all Americans.
  Sadie Stern Ott, age 76, of Seminole, Florida said that for years she 
has bought merchandise from sweepstakes companies, even though she knew 
that she did not have to buy anything to enter the contest.
  She says, ``They send so many envelopes that say `Return this 
certificate, saying what would you like to buy, and your merchandise 
will be delivered when we visit your home to bring you your prize.' ''
  Ott said she waited at home for the prize patrol several times, 
especially after the time she got a letter telling her the contest was 
down to her and another person. But she never won anything. She said, 
``I kind of felt that I had been played for a fool.''
  Ott said she spent several hundred dollars on magazines and 
knickknacks. Some seniors have spent thousands of dollars. This is 
exactly the way the sweepstakes companies cheat seniors out of their 
modest incomes. Using bright, shiny envelopes and promises of winning 
millions of dollars, these companies get seniors to buy products that 
they do not need in hopes of winning large cash prizes. In reality, 
these people have little, if any, chance of winning.
  At a time when many seniors struggle to pay for rent, food, and 
prescription medication, this cruel scam is inhumane and ethically 
indefensible.
  My own State of Florida has filed suit against Publisher's 
Clearinghouse for exactly this activity. The Attorney General has 
charged the company with unfair trade practices and unlawful game 
promotions.
  In addition, Florida, along with three other States, has already won 
a $4 million settlement against another sweepstakes company, American 
Family Publishers.
  Even though law enforcement officials and consumer protection groups 
send out notices warning against these mail scams, many people are 
still drawn into their game.
  These fraudulent practices by sweepstakes companies could almost be 
compared to a criminal coming into someone's home and stealing from 
them.
  I would like to give a special word of thanks to the gentleman from 
New Jersey (Mr. LoBiondo) and the gentleman from California (Mr. 
Condit) for their work on this bill to establish consumer protections 
and to prevent sweepstakes companies from swindling people, especially 
seniors, out of their hard-earned money.
  Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I will enter into the Record a statement from the 
Executive Office of the President. I will just read a bit of it. ``The 
administration strongly supports H.R. 170, the Deceptive Mail 
Prevention and Enforcement Act, that will be considered on the 
Suspension Calendar. H.R. 170 would protect consumers against deceptive 
mailings and sweepstakes practices and reinforce their rights by 
establishing standards for disclosure and financial penalties for 
sponsors who fail to comply with those standards.
  ``H.R. 170 would establish standards for sweepstakes mailings, skill 
contests, and facsimile checks. The bill would restrict government 
look-alike documents and create a uniform notification system to allow 
individuals to remove their names and addresses from all major 
sweepstakes mailing lists at one time.
  ``It would also create strong financial penalties for not disclosing 
all terms, conditions, rules, and entry procedures of a contest, the 
continuation of mailings after an individual has requested cessation 
and the failure to comply with the Postal Service stop order.
  ``H.R. 170 would increase the authority of the Postal Service to 
investigate and stop deceptive mailings while permitting States to 
establish a higher level of protection for consumers.
  ``Congress has heard evidence of widespread confusion by consumers 
and

[[Page 27898]]

clearly misleading mailings and sweepstakes practices. The 
administration urges passage of H.R. 170 to protect consumers and 
address these concerns.''
  I also would like to acknowledge the interest of the gentleman from 
New York (Mr. LaFalce), who has had a great deal of interest in this 
legislation and had intended to speak with regards to it on the floor 
today, and also the gentleman from Illinois (Mr. Blagojevich), who has 
introduced legislation in this area.

                              {time}  1345

  Mr. Speaker, I will just wrap up by suggesting that although some 
sweepstakes mailings are fair, far too many are not. They deceive 
consumers into spending money or making purchases, none of which is 
needed, necessary or required. Savvy marketing techniques and 
technological advances have allowed sweepstakes promoters to target 
consumers who respond to the mailings or place orders for products. 
Mailings often use very aggressive marketing techniques, such as 
personalizing an address and implying if purchases are not made, the 
customer may lose her or his preferred customer status. In the most 
egregious cases, customers have received up to hundreds of mailings a 
year and spent thousands of dollars ordering items they did not want or 
need in an attempt to win the big prize.
  These deceptive tactics have resulted in thousands of consumer 
complaints to the Federal Trade Commission, to State Attorneys General, 
the United States Postal Service, and Members of Congress. Sadly, the 
victim of these marketing tactics are the elderly, who have difficulty 
reading the fine print, and believe that in order to be a preferred 
customer, that they must buy to win that prize.
  This is, indeed, an idea now whose time has come. For many years we 
have looked at this issue and many people have wondered why we have not 
taken action before. Well, thanks to the gentleman from New Jersey (Mr. 
LoBiondo) and the gentleman from California (Mr. Condit), certainly to 
the chairman of the subcommittee, the gentleman from New York (Mr. 
McHugh) and the ranking member, the gentleman from Pennsylvania (Mr. 
Fattah), we are indeed taking action and we are taking action today.
  Mr. Speaker, I submit for the Record the letter I mentioned earlier 
in my remarks.

        H.R. 170--Deceptive Mail Prevention and Enforcement Act

       The Administration strongly supports H.R. 170, the 
     Deceptive Mail Prevention and Enforcement Act, that will be 
     considered on the suspension calendar. H.R. 170 would protect 
     consumers against deceptive mailing and sweepstakes practices 
     and reinforce their rights by establishing standards for 
     disclosure and financial penalties or sponsors who fail to 
     comply with those standards.
       H.R. 170 would establish standards for sweepstakes 
     mailings, skill contests, and facsimile checks. The bill 
     would restrict ``government look-alike'' documents and create 
     a uniform notification system to allow individuals to remove 
     their names and addresses from all major sweepstakes mailing 
     lists at one time. It would also create strong financial 
     penalties for: not disclosing all terms, conditions, rules, 
     and entry procedures of a contest; the continuation of 
     mailings after an individual has requested cessation; and the 
     failure to comply with a Postal Service ``stop order.'' In 
     addition, H.R. 170 would increase the authority of the Postal 
     Service to investigate and stop deceptive mailings while 
     permitting States to establish a higher level of protection 
     for consumers.
       Congress has heard evidence of widespread confusion by 
     consumers and clearly misleading mailing and sweepstakes 
     practices. The Administration urges passage of H.R. 170 to 
     protect consumers and address these concerns.

  Mr. Speaker, I have no further requests for time and I yield back the 
balance of my time.
  Mr. McHUGH. Mr. Speaker, may I inquire of the Chair how much time is 
remaining?
  The SPEAKER pro tempore (Mr. Sununu). The gentleman from New York 
(Mr. McHugh) has 7 minutes remaining.
  Mr. McHUGH. Mr. Speaker, I yield 3\1/4\ minutes to the gentleman from 
Florida (Mr. Miller), another member of the Florida delegation that has 
been so supportive in this effort, and also I might add the sometimes 
the winter Congressman of my mother, who visits from New York State. So 
we particularly appreciate his support.
  Mr. MILLER of Florida. Mr. Speaker, I wish to rise in strong support 
of the H.R. 170, the Deceptive Mail Prevention and Enforcement Act and 
thank the gentleman from New York (Mr. McHugh) and also the gentleman 
from New Jersey (Mr. LoBiondo) for their support in bringing this 
legislation to the floor today.
  This legislation will help protect Americans from deceptive 
sweepstakes mailings and other types of deceptive mailings. This is one 
of the most important consumer issues to come before the 106th 
Congress, and I view H.R. 170 as one of the Committee on Government 
Reform's major accomplishments this year. It is a good bill that all my 
colleagues, Republicans, Democrats, liberals, conservatives and 
moderates can support.
  Several bills concerning deceptive sweepstakes mailings, including 
H.R. 170, have been introduced in this Congress. Most of my colleagues 
have probably heard from constituents who have been victims of these 
deceptive sweepstakes mailings, and this is particularly true with 
seniors. And with the large number of seniors in my district, this is a 
very important piece of legislation, because their stories are 
heartbreaking.
  This is a serious problem that Congress needs to address. And because 
the postal service is an entity of the Federal Government, Congress has 
the legal means and the duty to strengthen the law against fraudulent 
mailings. And let me say at the outset that not all sweepstakes 
mailings are deceptive. Promoters of legitimate sweepstakes have 
nothing to fear from this legislation.
  In August, the General Accounting Office testified before the 
Subcommittee on Postal Service of the Committee on Government Reform 
that data has been collected to suggest that consumers were having 
substantial problems with deceptive mail. The Federal Trade Commission, 
the American Association of Retired Persons, the National Consumers 
League also testified on their research in this area and the need for 
reform to protect consumers.
  The Chief Postal Inspector testified on the Postal Inspection 
Service's need for subpoena power and other additional powers to combat 
fraudulent mailings. Representatives of the marketers, who send 
sweepstakes mailings, also testified before the subcommittee. And I 
think the gentleman from New York (Mr. McHugh) has done a great job of 
producing a bill that reflects input from all the diverse points of 
view.
  H.R. 170 requires sweepstakes mailings to clearly and conspicuously 
display statements informing consumers that no purchase is necessary to 
enter the sweepstakes, and that making a purchase or purchases will not 
increase their chances of winning. I believe this is very important. 
Because the problem often is that consumers spend large sums of money 
to order products they do not need all in the mistaken belief that this 
will increase their chances of winning. It does not. If consumers wish 
to purchase a product or products, fine, but they need to be made fully 
aware that this bears no relation to the odds of winning.
  With respect to their odds of winning, H.R. 170 requires this be 
clearly disclosed as well. Further, any check facsimile must include a 
statement on the check itself that it is nonnegotiable and has no cash 
value. H.R. 170 also strengthens existing laws regarding government 
look-alike mailings.
  H.R. 170 grants the Postal Service additional authority to combat 
fraudulent sweepstakes mailings and civil penalties for fraudulent 
mailings also are significantly increased.
  This legislation does not preempt more restrictive State laws in this 
area. A number of State Attorneys General, including the Indiana 
Attorney General, has been working very hard on behalf of victims of 
fraudulent sweepstakes. It is my hope that all my colleagues will 
support H.R. 170.
  Mr. McHUGH. Mr. Speaker, I yield 3 minutes to the gentleman from Ohio 
(Mr. LaTourette). And I should hasten

[[Page 27899]]

to add, having just heard from one of the newest members of the 
Subcommittee on Postal Service, the gentleman from Florida (Mr. 
Miller), we now have the opportunity to hear from one of the more 
senior members, and certainly one of the most active members on the 
subcommittee, not just on this legislation but on the broad expansion 
of issues that we deal with. I am delighted he is able to join us on 
the floor today to make comments on this initiative.
  Mr. LaTOURETTE. Mr. Speaker, I thank the chairman for the kind words, 
and I rise in strong support of H.R. 170, the Honesty in Sweepstakes 
Act of 1999.
  I want to thank and congratulate my friend, the gentleman from New 
Jersey (Mr. LoBiondo) and also congratulate the chairman of the 
subcommittee, the gentleman from New York (Mr. McHugh), and the ranking 
member, the gentleman from Pennsylvania (Mr. Fattah), for their 
diligence in ensuring that Americans, and the elderly in particular, 
are protected from unscrupulous and deceptive mailings.
  The need for this legislation, Mr. Speaker, was illustrated to me 
rather clearly this year when we conducted a survey in our district 
called ``Operation Senior Sweep.'' The project proved to me that 
seniors are ruthlessly targeted by these companies, and the more they 
respond the more mailings they received. The highly personalized 
mailings often lead folks to believe they have won something when they 
have not. And there is also strong evidence that people believe their 
chances of winning increase if they purchase something. Often the 
disclaimers are buried in very fine print.
  We found, for instance, one Reader's Digest sweepstakes that carried 
a 2 million prize. The odds of winning, buried in very tiny type, were 
one in 199 million. Mr. Speaker, the odds of having quintuplets in this 
country are one in 85 million. My grandmother, at 89, is more likely to 
have quintuplets than she is to win the Reader's Digest sweepstakes.
  It is obviously the legislation authored by the gentleman from New 
Jersey (Mr. LoBiondo) is needed, and it is also clear that some 
companies know the jig is up when it comes to their deceptive mailings. 
I will submit for the Record a letter dated September 17, 1999. This 
letter was received by the elderly sister of a woman who lives in my 
district. It is from the Time Customer Service and, in effect, the 
company says it cannot process the woman's order for Time because she 
has already ordered too many magazines and books through a sweepstakes.
  This is a staggering admission of wrongdoing on Time's part, I 
believe. But, unfortunately, this corporate good Samaritan act is way 
too late to help this elderly woman. One less magazine subscription is 
not going to help her. She has already lost everything she has owned 
and saved on sweepstakes.
  I also noticed on the plan yesterday a news story about the company 
that holds the American Family Publishers sweepstakes contests. It 
announced Friday that it has filed for Chapter 11 bankruptcy after 
being sued so many times over deceptive and misleading mailings. This 
is a sweepstakes, Mr. Speaker, that is pitched by celebrity spokesmen 
Ed McMahon and Dick Clark.
  Mr. Speaker, I do not know what Ed McMahon has planned for New Year's 
Eve, but I do hope that Dick Clark welcomes the new year and the 
millennium by dropping the ball on American Family Publishers. Mr. 
Clark should save his good reputation, stick to American Bandstand and 
ditch American Scamstand.
  Mr. McHUGH. Mr. Speaker, I yield myself such time as I may consume.
  As we have heard here today, this bill truly is the product of 
bipartisanship and it started with the gentleman from California (Mr. 
Condit) and the gentleman from New Jersey (Mr. LoBiondo) and their 
work, and I think carried through with the support of the gentleman 
from Indiana (Mr. Burton), the chairman of the Committee on Government 
Reform, and the ranking member of the full committee, the gentleman 
from California (Mr. Waxman), as well as the gentleman from 
Pennsylvania (Mr. Fattah) and the gentleman from Illinois (Mr. Davis), 
and all the members on both sides of the aisle.
  So this is, as we have heard repeatedly, a bill whose time has come. 
I urge all our colleagues to join us in supporting it.
  Mr. LANTOS. Mr. Speaker, I rise today in strong support of H.R. 170, 
the ``Honesty in Sweepstakes Act of 1999.'' This legislation will curb 
the devastating effects of one of the most troubling consumer abuses--
deceptive and misleading sweepstakes and other mass mail promotions. 
This legislation will help end this horrendous practice which has been 
devastating financially and emotionally to many seniors and other 
individuals on limited budgets.
  Mr. Speaker, millions of Americans receive sweepstakes letters each 
year that use deceptive marketing ploys to encourage the purchase of 
magazines and other products. Many of my constituents, especially 
seniors, regularly receive these offers for products in the mail that 
include extravagant promises of money and prizes in order to entice 
them to make unnecessary and unneeded purchases.
  Some common ploys used by unscrupulous mailers include ``promises'' 
of huge winnings printed in large type and other enticements such as 
``immediate response required--$1 million cash payment pending.'' While 
these promises scream out in bold letters, the real details and 
conditions are hidden in fine print at the bottom of the last page 
where it is hard to find and particularly hard for seniors to read.
  Mr. Speaker, each year millions of consumers nationwide are 
deliberately misled into believing that they have won or are likely to 
win a sweepstakes, when, in fact, they have neither won, nor are they 
likely to win. The Honesty in Sweepstakes Act requires that all 
mailings which offer prizes through games of chance clearly state that 
the recipient has not automatically won.
  Another disgusting and deceptive method, Mr. Speaker, is sending 
mailings which contain slips of paper which are deceptively printed to 
look like cashier's checks, but which are actually worthless. These 
marketing tactics unfairly prey on people's hopes and dreams. H.R. 170 
requires that all sweepstakes mailings that contain look-like cashier's 
checks prominently display that the check itself is non-negotiable and 
has no cash value.
  One deceptive practice which I find particularly offensive is sending 
mailings which are designed to look like a mailing from a Federal 
government agency. Seniors have been particularly vulnerable to these 
tactics, because they are generally more trusting of these mailings. 
H.R. 170 would prohibit mailings that suggest that they are sanctioned 
by or connected with the federal government.
  Mr. Speaker, H.R. 170 also requires companies that send sweepstakes 
or ``skill contests'' through the mail to establish a notification 
system, similar to the ``do not call'' lists of tele-marketers under 
which consumers can call a toll-free number to be removed from mailing 
lists. The legislation also requires that all sweepstakes mailings 
contain information about the existence of such ``do not mail'' lists 
and how a consumer can place his or her name on such a list. I am 
pleased that the bill will also permit individuals who receive a 
follow-up mailing after they have requested that their names be removed 
from a mailing list to sue sweepstakes companies in state court for 
violation of this law.
  Mr. Speaker, many consumers spend thousands of dollars each year on 
deceptive sweepstakes mailings, often spending their life savings 
without ever winning anything. H.R. 170 will help to protect consumers 
from unscrupulous operators of deceptive sweepstakes scams and will 
help end many of the most abusive practices of the sweepstakes 
industry. I urge my colleagues to vote in favor of this important 
legislation.
  Mr. McHUGH. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York (Mr. McHugh) that the House suspend the rules 
and pass the bill, H.R. 170, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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