[Congressional Record (Bound Edition), Volume 146 (2000), Part 6]
[House]
[Pages 7481-7483]
[From the U.S. Government Publishing Office, www.gpo.gov]



 PROVIDING FOR CONSIDERATION OF H.R. 3709, INTERNET NONDISCRIMINATION 
                              ACT OF 2000

  Mr. LINDER. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 496 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 496

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 3709) to make permanent the moratorium enacted 
     by the Internet Tax Freedom Act as it applies to new, 
     multiple, and discriminatory taxes on the Internet. The first 
     reading of the bill shall be dispensed with. Points of order 
     against consideration of the bill for failure to comply with 
     clause 4(a) of rule XIII are waived. General debate shall be 
     confined to the bill and shall not exceed one hour equally 
     divided and controlled by the chairman and ranking minority 
     member of the Committee on the Judiciary. After general 
     debate the bill shall be considered for amendment under the 
     five-minute rule for a period not to exceed two hours. It 
     shall be in order to consider as an original bill for the 
     purpose of amendment under the five-minute rule the amendment 
     in the nature of a substitute recommended by the Committee on 
     the Judiciary now printed in the bill. The committee 
     amendment in the nature of a substitute shall be considered 
     as read. During consideration of the bill for amendment, the 
     Chairman of the Committee of the Whole may accord priority in 
     recognition on the basis of whether the Member offering an 
     amendment has caused it to be printed in the portion of the 
     Congressional Record designated for that purpose in clause 8 
     of rule XVIII. Amendments so printed shall be considered as 
     read. The Chairman of the Committee of the Whole may: (1) 
     postpone until a time during further consideration in the 
     Committee of the Whole a request for a recorded vote on any 
     amendment; and (2) reduce to five minutes the minimum time 
     for electronic voting on any postponed question that follows 
     another electronic vote without intervening business, 
     provided that the minimum time for electronic voting on the 
     first in any series of questions shall be 15 minutes. At the 
     conclusion of consideration of the bill for amendment the 
     Committee shall rise and report the bill to the House with 
     such amendments as may have been adopted. Any Member may 
     demand a separate vote in the House on any amendment adopted 
     in the Committee of the Whole to the bill or to the committee 
     amendment in the nature of a substitute. The previous 
     question shall be considered as ordered on the bill and 
     amendments thereto to final passage without intervening 
     motion except one motion to recommit with or without 
     instructions.

  The SPEAKER pro tempore (Mr. Taylor of North Carolina). The gentleman 
from Georgia (Mr. Linder) is recognized for 1 hour.
  Mr. LINDER. Mr. Speaker, for the purpose of debate only, I yield the 
customary 30 minutes to my friend, the gentleman from Ohio (Mr. Hall) 
pending which I yield myself such time as I may consume. Mr. Speaker, 
during consideration of this resolution, all time yielded is for the 
purpose of debate only.
  Mr. Speaker, House Resolution 496 is an open rule providing for 
consideration of H.R. 3709, the Internet Nondiscrimination Act. H. Res. 
496 provides one hour of general debate equally divided and controlled 
by the chairman and ranking minority member of the Committee on the 
Judiciary. The rule waives points of order against consideration of the 
bill for failure to comply with clause 4(a) of rule 13, which requires 
a 3-day layover of the committee report.
  H. Res. 496 makes in order the Committee on the Judiciary amendment 
in the nature of a substitute now printed in the bill as an original 
bill for the purpose of amendment, which shall be open for amendment at 
any point and provides that the amendment process shall not exceed 2 
hours.
  The rule allows the chairman of the Committee of the Whole to accord 
priority in recognition to those Members who have preprinted their 
amendments in the Congressional Record prior to their consideration.

[[Page 7482]]

  The rule also allows the chairman of the Committee of the Whole to 
postpone recorded votes and reduce to 5 minutes the voting time on any 
postponed question providing that voting time on the first in any 
series of questions is not less than 15 minutes.
  Finally, the rule provides one motion to recommit, with or without 
instructions, as is the right of the minority.
  Mr. Speaker, as one who supports reducing the overall tax burden on 
American families, I wholeheartedly support this bill and the rule that 
brings it before us.
  The high-tech revolution has changed the way that every American 
works and lives and has provided Americans with more freedom and 
prosperity. The high-tech sector accounted for 35 percent of the 
Nation's real economic growth from 1994 to 1998.
  In Atlanta alone, according to the Metro-Atlanta Chamber of Commerce, 
we have more than 9,000 technology-related companies employing more 
than 165,000 technology workers. The high-tech sector is the engine of 
our current economic prosperity and has created thousands of new jobs 
and opportunities for our constituents, and we must ensure that 
excessive government intervention through discriminatory taxes and 
regulation does not threaten the future of the high-tech industry.
  H.R. 3709 honors our pledge to ensure that barriers to future 
innovation, competition and growth in the high-tech sector do not 
discriminate against electronic commerce. The bill before us fulfills 
the promises made in 1998, when the 105th Congress unanimously passed 
the Internet Tax Freedom Act.
  As my colleagues may recall, this important law prohibited for 3 
years any taxes on the Internet access charges levied by service 
providers or any multiple or discriminatory taxes on Internet commerce.
  The Internet Tax Freedom Act also created a commission to study if 
and how e-commerce should be taxed. The commission reported back to 
Congress after months of considering the complexities of tax law as it 
relates to the emerging e-commerce sector.
  While the commission was not able to agree on a new format for 
dealing with this difficult challenge, a majority of the members did 
agree on one thing, the need to extend the moratorium. Under current 
law, the 3-year moratorium on Internet taxation is set to expire on 
October 21, 2001, and can only be extended by Congress. I supported the 
moratorium when it was proposed, and I continue to support it now.
  There has been some confusion about the effect of the language of the 
moratorium, and I want to take a brief moment to mention that this 
moratorium does not affect the larger issue of States and localities 
collecting taxes on sales that occur on the Internet. The bill deals 
only with the discriminatory taxes against the Internet, taxes that 
would not generally be imposed or legally collectible by a State or 
local government on transactions involving similar services.
  Despite the fact that this bill does not affect the issues of sales 
taxes, I do believe that the Advisory Commission was on target in 
stating that the current sales and use tax system is complex and 
burdensome. Clearly, some nationwide consistency and fairness between 
Internet and Main Street retailers is necessary.
  While the ultimate impact of e-commerce on traditional retailers and 
State revenues is far from clear, an equitable and fair tax system 
should not disproportionately burden any type of seller.
  What H.R. 3709 does do is extend the moratorium on taxes on Internet 
access and multiple and discriminatory taxes on electronic commerce for 
5 additional years.
  The Internet Tax Freedom Act was aimed simply at preventing tax 
discrimination on-line, not at giving a tax preference, and the 
Internet Nondiscrimination Act continues this sound policy. This 
extension would give businesses, policymakers, and the public more time 
to ensure that the ultimate solution to this dilemma will be 
comprehensive, equitable, and conducive to the growth of all sectors of 
the American economy.
  Too often, we have rushed into making tax policy with only our good 
intentions, and the final product is a tax code that has dozens of 
loopholes, hundreds of giveaways, and thousands of pages that even our 
best policy analysts do not understand. We cannot afford to do the same 
with the Internet. We can do better with America's money.
  I congratulate the Committee on the Judiciary for their hard work on 
this legislation. This is a fair rule that allows all germane 
alternatives to be considered. I urge my colleagues to support it so 
that we may proceed with general debate and consideration of this 
bipartisan bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HALL of Ohio. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I want to thank the gentleman from Georgia (Mr. Linder) 
for yielding me the time.
  Mr. Speaker, this is a modified open rule which will allow for the 
consideration of H.R. 3709, a bill to extend, what we have heard, for 5 
years the current moratorium on State and local taxes on Internet 
access.
  As my colleague has explained, this rule provides for 1 hour of 
general debate to be equally divided and controlled by the chairman and 
ranking minority member of the Committee on the Judiciary. The rule 
will permit all Members on both sides of the aisle to offer germane 
amendments. However, the rule places a time cap of only 2 hours for the 
amendment process.
  Like the railroads in the 19th century, the Internet has 
revolutionized our way of doing business and has spurred our national 
economy to great heights. And like the railroads, the Federal 
Government has a significant role in encouraging and assisting and 
providing a legal framework for the growth of the Internet. With that 
role is the responsibility to make sure that we do not take any action 
to stifle this productive force.
  The bill before us today and the process that brought us here does 
not give me confidence that we are taking that responsibility 
seriously. The bill is simple enough, but it has generated great 
controversy. It imposes an unfunded mandate on State and local 
governments.
  The administration opposes the bill. It is opposed by 39 governors, 
Democrats and Republicans, including the governor of my own State of 
Ohio. It is opposed by the National Conference of State Legislators, 
the National League of Cities, the National Retail Federation, and 
others.
  Some Members have accused the bill of trampling on the 10th 
amendment.
  Despite the controversy surrounding the bill, the House is rushing 
headlong toward its passage. The Committee on the Judiciary held a 
markup with only one day's notice. The report to accompany the bill was 
only filed on Monday, requiring the Committee on Rules to waive the 
House rule requiring a 3-day layover for committee reports.
  There were no hearings on the bill. I understand the Committee on the 
Judiciary is planning hearings later this month. This draws to mind the 
Lewis Carroll line from Alice's Adventures in Wonderland: ``Sentence 
first, verdict afterwards.''
  In the case of this bill, we have passage first, hearings afterwards. 
And now we have this rule with time caps that could restrict the 
ability of House Members to go offer amendments.
  Mr. Speaker, I point out these facts not to oppose the bill. There 
are certainly merits behind this measure. Rather, I wish to make the 
case that a bill this important and this controversial deserves more 
careful deliberation than the House is providing.
  The current moratorium does not expire until October 2001, a year and 
a half from now. There is no rush. We have the time to do this properly 
and responsibly.
  Mr. Speaker, I yield 5 minutes to the gentleman from Texas (Mr. 
Doggett).

                              {time}  1030

  Mr. DOGGETT. I thank the gentleman for yielding me this time.
  Mr. Speaker, from the travel industry to the food industry, Internet 
commerce has spurred growth in all sectors

[[Page 7483]]

of our economy. I believe we should encourage this new economy by 
minimizing regulation and maximizing the freedom to innovate on the 
Internet. The bill that we will have before us through this rule, the 
Internet Nondiscrimination Act, furthers that purpose. The bill extends 
the Internet tax moratorium which was too short as originally approved 
in this Congress, and it eliminates the grandfather clause of the 
Internet Tax Freedom Act that has enabled a dozen States, including my 
own State of Texas, to impose access charges on the Internet.
  I believe that access to the Internet must be free, that we must 
prevent discriminatory taxes from being imposed now or in the future 
that would impede the ability of individuals and of businesses to gain 
access to the Internet and access to electronic commerce. Electronic 
commerce is still very much in its infancy, and if we burden it with 
regulations, if we overburden it with taxes, it will not be able to 
expand and achieve its full potential.
  As a strong supporter of the Internet Tax Freedom Act when it was 
approved in 1998, I realized then that, while 3 years was all we could 
get approved in this Congress, it was insufficient to do the job of 
exploring the complexities of how any taxation in the future of this 
type of commerce would be achieved. That became particularly apparent 
in the overpoliticized atmosphere of the Advisory Commission on 
Electronic Commerce, which we asked to look objectively at this issue, 
but which was not able to resolve this and make a recommendation to the 
Congress.
  Now, if this Congress were, as my colleague has just indicated, to do 
what this particular House this year and last year has demonstrated 
that it is most experienced in, and that is, doing nothing or next to 
nothing, we would not incur any additional burden on electronic 
commerce this year, because the current moratorium does not expire 
until October of 2001. So if there is inaction, nothing will occur that 
would be disadvantageous.
  It is, however, an election year, and so this measure has been rushed 
through the Congress in the manner that was described, and that is 
unfortunate, because it would be good if we could have a dispassionate, 
objective, bipartisan review of these issues.
  Our Republican colleagues have found it necessary continually to 
bring up measures to try to drive a wedge between the new economy, the 
high technology portion of our economy, and the Democratic Party. That 
is unfortunate, because I believe that only if we move in a bipartisan 
fashion are we going to be able to resolve these issues.
  The State of Texas is one of those that has had the highest access 
charges, and I am pleased that we can provide a tax cut through this 
measure to the people of the State of Texas. The Texas Legislature 
would have been the better avenue for accomplishing that. They could 
have done it last year. It is unfortunate they did not.
  The minority leader, the gentleman from Missouri, has spoken out in 
favor of an extension of the moratorium. He suggested 2 years. 
Naturally being an election year, the Republicans have come in and 
said, no, make it 5. If the gentleman from Missouri had suggested 5 
years, they would have come in and said, no, make it 10. This is not 
the kind of process that is going to lead to a bipartisan addressing of 
these issues and eventually resolving how any commerce that transpires 
on the Internet, the goods and services that are sold over it, might be 
taxed so that we are not faced with virtual public schools and virtual 
fire departments instead of the real thing in the future if we see the 
total erosion of the State and local tax base.
  So I would prefer a more deliberate process than this, but I think it 
is important to have some extension of the moratorium. The Senate will 
have an opportunity to look and craft this measure more carefully and 
see what the appropriate time limits are.
  The much greater danger to the Internet that this bill does not 
address the problem that is raised by the gentleman from Georgia's bill 
to impose a 59.5 percent sales tax not as a State and local source of 
revenue, but as a Federal source of revenue, something about which I 
and other Members of our high tech advisory group as Democrats have 
strongly approved.
  We feel that using electronic commerce as a source of Federal sales 
tax revenue poses a much greater potential burden, which this 
moratorium does not really reach. There is a lingering danger that 
Republicans, in their dogmatic zeal to junk the income tax code, will 
impose a new sales tax on all electronic commerce that adds 60 percent 
to the price of every purchase made online. We must both reject that 
bad idea and extend this moratorium.
  Mr. HALL of Ohio. Mr. Speaker, I have no further requests for time, 
and I yield back the balance of my time.
  Mr. LINDER. Mr. Speaker, I yield myself such time as I may consume.
  I will just comment on the gentleman's comments who previously spoke 
about a 60 percent or 59.5 percent sales tax just to point out his own 
Democrat staff on the Committee on Ways and Means estimates that the 
next year tax, revenue neutral, to be about 24 percent. He will pick 
the worst scenario.
  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

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