[House Report 106-725]
[From the U.S. Government Publishing Office]
106th Congress Rept. 106-725
HOUSE OF REPRESENTATIVES
2d Session Part 1
======================================================================
WIRELESS TELECOMMUNICATIONS SOURCING AND PRIVACY ACT
_______
July 11, 2000.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Bliley, from the Committee on Commerce, submitted the following
R E P O R T
[To accompany H.R. 3489]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, to whom was referred the bill
(H.R. 3489) to amend the Communications Act of 1934 to regulate
interstate commerce in the use of mobile telephones and to
strengthen and clarify prohibitions on electronic
eavesdropping, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 8
Background and Need for Legislation.............................. 9
Hearings......................................................... 11
Committee Consideration.......................................... 11
Committee Votes.................................................. 12
Committee Oversight Findings..................................... 12
Committee on Government Reform Oversight Findings................ 12
New Budget Authority, Entitlement Authority, and Tax Expenditures 12
Committee Cost Estimate.......................................... 12
Congressional Budget Office Estimate............................. 12
Federal Mandates Statement....................................... 15
Advisory Committee Statement..................................... 15
Constitutional Authority Statement............................... 15
Applicability to Legislative Branch.............................. 16
Section-by-Section Analysis of the Legislation................... 16
Changes in Existing Law Made by the Bill, as Reported............ 22
Amendment
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Wireless Telecommunications Sourcing
and Privacy Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The provision of mobile telecommunications services is a
matter of interstate commerce within the jurisdiction of the
United States Congress under Article I, Section 8 of the United
States Constitution. Certain aspects of mobile
telecommunications technologies and services do not respect,
and operate independently of, State and local jurisdictional
boundaries.
(2) The mobility afforded to millions of American consumers
by mobile telecommunications services helps to fuel the
American economy, facilitate the development of the information
superhighway and provide important safety benefits.
(3) Users of mobile telecommunications services can originate
a call in one State or local jurisdiction and travel through
other States or local jurisdictions during the course of the
call. These circumstances make it more difficult to track the
separate segments of a particular call with all of the States
and local jurisdictions involved with the call. In addition,
expanded home calling areas, bundled service offerings and
other marketing advances make it increasingly difficult to
assign each transaction to a specific taxing jurisdiction.
(4) State and local taxes imposed on mobile
telecommunications services that are not consistently based can
subject consumers, businesses and others engaged in interstate
commerce to multiple, confusing and burdensome State and local
taxes and result in higher costs to consumers and the industry.
(5) State and local taxes that are not consistently based can
result in some telecommunications revenues inadvertently
escaping State and local taxation altogether, thereby violating
standards of tax fairness, creating inequities among
competitors in the telecommunications market and depriving
State and local governments of needed tax revenues.
(6) Because State and local tax laws and regulations of many
jurisdictions were established before the proliferation of
mobile telecommunications services, the application of these
laws to the provision of mobile telecommunications services may
produce conflicting or unintended tax results.
(7) State and local governments provide essential public
services, including services that Congress encourages State and
local governments to undertake in partnership with the Federal
government for the achievement of important national policy
goals.
(8) State and local governments provide services that support
the flow of interstate commerce, including services that
support the use and development of mobile telecommunications
services.
(9) State governments as sovereign entities in our Federal
system may require that interstate commerce conducted within
their borders pay its fair share of tax to support the
governmental services provided by those governments.
(10) Local governments as autonomous subdivisions of a State
government may require that interstate commerce conducted
within their borders pay its fair share of tax to support the
governmental services provided by those governments.
(11) To balance the needs of interstate commerce and the
mobile telecommunications industry with the legitimate role of
State and local governments in our system of federalism,
Congress needs to establish a uniform and coherent national
policy regarding the taxation of mobile telecommunications
services through the exercise of its constitutional authority
to regulate interstate commerce.
(12) Congress also recognizes that the solution established
by this legislation is a necessarily practical one and must
provide for a system of State andlocal taxation of mobile
telecommunications services that in the absence of this solution would
not otherwise occur. To this extent, Congress exercises its power to
provide a reasonable solution to otherwise insoluble problems of multi-
jurisdictional commerce.
SEC. 3. AMENDMENT OF COMMUNICATIONS ACT OF 1934 TO PROVIDE RULES FOR
DETERMINING STATE AND LOCAL GOVERNMENT TREATMENT OF
CHARGES RELATED TO MOBILE TELECOMMUNICATIONS
SERVICES.
(a) In General.--The Communications Act of 1934 (47 U.S.C. 151 et
seq.) is amended by adding at the end thereof the following:
``TITLE VIII--STATE AND LOCAL TREATMENT OF CHARGES FOR MOBILE
TELECOMMUNICATIONS SERVICES
``SEC. 801. APPLICATION OF TITLE.
``(a) In General.--This title applies to any tax, charge, or fee
levied by a taxing jurisdiction as a fixed charge for each customer or
measured by gross amounts charged to customers for mobile
telecommunications services, regardless of whethersuch tax, charge, or
fee is imposed on the vendor or customer of the service and regardless
of the terminology used to describe the tax, charge, or fee.
``(b) General Exceptions.--This title does not apply to--
``(1) any tax, charge, or fee levied upon or measured by the
net income, capital stock, net worth, or property value of the
provider of mobile telecommunications service;
``(2) any tax, charge, or fee that is applied to an equitably
apportioned amount that is not determined on a transactional
basis;
``(3) any tax, charge, or fee that represents compensation
for a mobile telecommunications service provider's use of
public rights of way or other public property, provided that
such tax, charge, or fee is not levied by the taxing
jurisdiction as a fixed charge for each customer or measured by
gross amounts charged to customers for mobile telecommunication
services;
``(4) any generally applicable business and occupation tax
that is imposed by a State, is applied to gross receipts or
gross proceeds, is the legal liability of the carrier, and
statutorily allows the taxpayer to elect to use the sourcing
method required in this Act; or
``(5) any fee related to obligations under section 254 of
this Act.''.
``(c) Specific Exceptions.--This title--
``(1) does not apply to the determination of the taxing situs
of prepaid telephone calling services;
``(2) does not affect the taxability of either the initial
sale of mobile telecommunications services or subsequent
resale, whether as sales of the service alone or as a part of a
bundled product, where the Internet Tax Freedom Act would
preclude a taxing jurisdiction from subjecting the charges of
the sale of these mobile telecommunications services to a tax,
charge, or fee but this section provides no evidence of the
intent of Congress with respect to the applicability of the
Internet Tax Freedom Act to such charges; and
``(3) does not apply to the determination of the taxing situs
of air-ground radiotelephone service as defined in section
22.99 of the Commission's regulations (47 C.F.R. 22.99).
``SEC. 802. SOURCING RULES.
``(a) In General.--Notwithstanding the law of any State or political
subdivision thereof to the contrary, mobile telecommunications services
provided in a taxing jurisdiction to a customer, the charges for which
are billed by or for the customer's home service provider, shall be
deemed to be provided by the customer's home service provider.
``(b) Jurisdiction.--All charges for mobile telecommunications
services that are deemed to be provided by the customer's home service
provider under this title are authorized to be subjected to tax,
charge, or fee by the taxing jurisdictions whose territorial limits
encompass the customer's place of primary use, regardless of where the
mobile telecommunication services originate, terminate or pass through,
and no other taxing jurisdiction may impose taxes, charges, or fees on
charges for such mobile telecommunications services.
``SEC. 803. LIMITATIONS.
``This title does not--
``(1) provide authority to a taxing jurisdiction to impose a
tax, charge, or fee that the laws of the jurisdiction do not
authorize the jurisdiction to impose; or
``(2) modify, impair, supersede, or authorize the
modification, impairment, or supersession of, the law of any
taxing jurisdiction pertaining to taxation except as expressly
provided in this title.
``SEC. 804. ELECTRONIC DATABASES FOR NATIONWIDE STANDARD NUMERIC
JURISDICTIONAL CODES.
``(a) Electronic Database.--A State may provide an electronic
database to a home service provider or, if a State does not provide
such an electronic database to home service providers, then the
designated database provider may provide an electronic database to a
home service provider. The electronic database, whether provided by the
State or the designated database provider, shall be provided in a
format approved by the American National Standards Institute's
Accredited Standards Committee X12, that, allowing for de minimis
deviations, designates for each street address in the State, including
to the extent practicable, any multiple postal street addresses
applicable to one street location, the appropriate taxing
jurisdictions, and the appropriate code for each taxing jurisdiction,
for each level of taxing jurisdiction, identified by one nationwide
standard numeric code. The electronic database shall also provide the
appropriate code for each street address with respect to political
subdivisions which are not taxing jurisdictions when reasonably needed
to determine the proper taxing jurisdiction. The nationwide standard
numeric codes shall contain the same number of numeric digits with each
digit or combination of digits referring to the same level of taxing
jurisdiction throughout the United States using a format similar to
FIPS 55-3 or other appropriate standard approved by the Federation of
Tax Administrators and the Multistate Tax Commission, or their
successors. Each address shall be provided in standard postal format.
``(b) Notice; Updates.--A State or designated database provider that
provides or maintains an electronic database described in subsection
(a) shall provide notice of the availability of the then current
electronic database, and any subsequent revisions thereof, by
publication in the manner normally employed for the publication of
informational tax, charge, or fee notices to taxpayers in that State.
``(c) User Held Harmless.--A home service provider using the data
contained in the electronic database described in subsection (a) shall
be held harmless from any tax, charge, or fee liability that otherwise
would be due solely as a result of any error or omission in the
electronic database provided by a State or designated database
provider. The home service provider shall reflect changes made to the
electronic database during a calendar quarter no later than 30 days
after the end of that calendar quarter for each State that issues
notice of the availability of an electronic database reflecting such
changes under subsection (b).
``SEC. 805. PROCEDURE WHERE NO ELECTRONIC DATABASE PROVIDED.
``(a) In General.--If neither a State nor designated database
provider provides an electronic database under section 804, a home
service provider shall be held harmless from any tax, charge, or fee
liability in that State that otherwise would be due solely as a result
of an assignment of a street address to an incorrect taxing
jurisdiction if, subject to section 806, the home service provider
employs an enhanced zip code to assign each street address to a
specific taxing jurisdiction for each level of taxing jurisdiction and
exercises due diligence at each level of taxing jurisdiction to ensure
that each such street address is assigned to the correct taxing
jurisdiction. Where an enhanced zip code overlaps boundaries of taxing
jurisdictions of the same level, the home service provider must
designate one specific jurisdiction within such enhanced zip code for
use in taxing the activity for that enhanced zip code for each level of
taxing jurisdiction. Any enhanced zip code assignment changed in
accordance with section 806 is deemed to be in compliance with this
section. For purposes of this section, there is a rebuttable
presumption that a home service provider has exercised due diligence if
such home service provider demonstrates that it has--
``(1) expended reasonable resources to implement and maintain
an appropriately detailed electronic database of street address
assignments to taxing jurisdictions;
``(2) implemented and maintained reasonable internal controls
to promptly correct misassignments of street addresses to
taxing jurisdictions; and
``(3) used all reasonably obtainable and usable data
pertaining to municipal annexations, incorporations,
reorganizations and any other changes in jurisdictional
boundaries that materially affect the accuracy of the
electronic database.
``(b) Termination of Safe Harbor.--Subsection (a) applies to a home
service provider that is in compliance with the requirements of
subsection (a), with respect to a State for which an electronic
database is not provided under section 804 until the later of--
``(1) 18 months after the nationwide standard numeric code
described in section 804(a) has been approved by the Federation
of Tax Administrators and the Multistate Tax Commission; or
``(2) 6 months after that State or a designated database
provider in that State provides the electronic database as
prescribed in section 804(a).
``SEC. 806. CORRECTION OF ERRONEOUS DATA FOR PLACE OF PRIMARY USE.
``(a) In General.--A taxing jurisdiction, or a State on behalf of any
taxing jurisdiction or taxing jurisdictions within such State, may--
``(1) determine that the address used for purposes of
determining the taxing jurisdictions to which taxes, charges,
or fees for mobile telecommunications services are remitted
does not meet the definition of place of primary use in section
809(3) and give binding notice to the home service provider to
change the place of primary use on a prospective basis from the
date of notice of determination if--
``(A) where the taxing jurisdiction making such
determination is not a State, such taxing jurisdiction
obtains the consent of all affected taxing
jurisdictions within the State before giving such
notice of determination; and
``(B) the customer is given an opportunity, prior to
such notice of determination, to demonstrate in
accordance with applicable State or local tax, charge,
or fee administrative procedures that the address is
the customer's place of primary use;
``(2) determine that the assignment of a taxing jurisdiction
by a home service provider under section 805 does not reflect
the correct taxing jurisdiction and give binding notice to the
home service providerto change the assignment on a prospective
basis from the date of notice of determination if--
``(A) where the taxing jurisdiction making such
determination is not a State, such taxing jurisdiction
obtains the consent of all affected taxing
jurisdictions within the State before giving such
notice of determination; and
``(B) the home service provider is given an
opportunity to demonstrate in accordance with
applicable State or local tax, charge, or fee
administrative procedures that the assignment reflects
the correct taxing jurisdiction.
``SEC. 807. DUTY OF HOME SERVICE PROVIDER REGARDING PLACE OF PRIMARY
USE.
``(a) Place of Primary Use.--A home service provider is responsible
for obtaining and maintaining the customer's place of primary use (as
defined in section 809). Subject to section 806, and if the home
service provider's reliance on information provided by its customer is
in good faith, a home service provider--
``(1) may rely on the applicable residential or business
street address supplied by the home service provider's
customer; and
``(2) is not liable for any additional taxes, charges, or
fees based on a different determination of the place of primary
use for taxes, charges or fees that are customarily passed on
to the customer as a separate itemized charge.
``(b) Address Under Existing Agreements.--Except as provided in
section 806, a home service provider may treat the address used by the
home service provider for tax purposes for any customer under a service
contract or agreement in effect 2 years after the date of enactment of
the Wireless Telecommunications Sourcing and Privacy Act as that
customer's place of primary use for the remaining term of such service
contract or agreement, excluding any extension or renewal of such
service contract or agreement, for purposes of determining the taxing
jurisdictions to which taxes, charges, or fees on charges for mobile
telecommunications services are remitted.
``SEC. 808. SCOPE; SPECIAL RULES.
``(a) Title Does Not Supersede Customer's Liability to Taxing
Jurisdiction.--Nothing in this title modifies, impairs, supersedes, or
authorizes the modification, impairment, or supersession of, any law
allowing a taxing jurisdiction to collect a tax, charge, or fee from a
customer that has failed to provide its place of primary use.
``(b) Additional Taxable Charges.--If a taxing jurisdiction does not
otherwise subject charges for mobile telecommunications services to
taxation and if these charges are aggregated with and not separately
stated from charges that are subject to taxation, then the charges for
otherwise non-taxable mobile telecommunications services may be subject
to taxation unless the home service provider can reasonably identify
charges not subject to such tax, charge, or fee from its books and
records that are kept in the regular course of business.
``(c) Non-Taxable Charges.--If a taxing jurisdiction does not subject
charges for mobile telecommunications services to taxation, a customer
may not rely upon the nontaxability of charges for mobile
telecommunications services unless the customer's home service provider
separately states the charges for non-taxable mobile telecommunications
services from taxable charges or the home service provider elects,
after receiving a written request from the customer in the form
required by the provider, to provide verifiable data based upon the
home service provider's books and records that are kept in the regular
course of business that reasonably identifies the nontaxable charges.
``(d) References to Regulations.--Any reference in this title to the
Commission's regulations is a reference to those regulations as they
were in effect on June 1, 1999.
``SEC. 809. DEFINITIONS.
``In this title:
``(1) Charges for mobile telecommunications services.--The
term `charges for mobile telecommunications services' means any
charge for, or associated with, the provision of commercial
mobile radio service, as defined in section 20.3 of the
Commission's regulations (47 C.F.R. 20.3), or any charge for,
or associated with, a service provided as an adjunct to a
commercial mobile radio service, that is billed to the customer
by or for the customer's home service provider regardless of
whether individual transmissions originate or terminate within
the licensed service area of the home service provider.
``(2) Taxing jurisdiction.--The term `taxing jurisdiction'
means any of the several States, the District of Columbia, or
any territory or possession of the United States, any
municipality, city, county, township, parish, transportation
district, or assessment jurisdiction, or any other political
subdivision within the territorial limits of the United States
with the authority to impose a tax, charge, or fee.
``(3) Place of primary use.--The term `place of primary use'
means the street address representative of where the customer's
use of the mobile telecommunications service primarily occurs,
which must be--
``(A) either the residential street address or the
primary business street address of the customer; and
``(B) within the licensed service area of the home
service provider.
``(4) Licensed service area.--The term `licensed service
area' means the geographic area in which the home service
provider is authorized by law or contract to provide commercial
mobile radio service to the customer.
``(5) Home service provider.--The term `home service
provider' means the facilities-based carrier or reseller with
which the customer contracts for the provision of mobile
telecommunications services.
``(6) Customer.--
``(A) In general.--The term `customer' means--
``(i) the person or entity that contracts
with the home service provider for mobile
telecommunications services; or
``(ii) where the end user of mobile
telecommunications services is not
thecontracting party, the end user of the mobile telecommunications
service, but this clause applies only for the purpose of determining
the place of primary use.
``(B) The term `customer' does not include--
``(i) a reseller of mobile telecommunications
service; or
``(ii) a serving carrier under an arrangement
to serve the customer outside the home service
provider's licensed service area.
``(7) Designated database provider.--The term ``designated
database provider'' means a corporation, association, or other
entity representing all the political subdivisions of a State
that is--
``(A) responsible for providing the electronic
database prescribed in section 804(a) if the State has
not provided such electronic database; and
``(B) sanctioned by municipal and county associations
or leagues of the State whose responsibility it would
otherwise be to provide the electronic database
prescribed by this title.
``(8) Prepaid telephone calling services.--The term `prepaid
telephone calling service' means the right to purchase
exclusively telecommunications services that must be paid for
in advance, that enables the origination of calls using an
access number, authorization code, or both, whether manually or
electronically dialed, if the remaining amount of units of
service that have been prepaid is known by the provider of the
prepaid service on a continuous basis.
``(9) Reseller.--The term `reseller'--
``(A) means a provider who purchases
telecommunications services from another
telecommunications service provider and then resells,
uses as a component part of, or integrates the
purchased services into a mobile telecommunications
service; but
``(B) does not include a serving carrier with which a
home service provider arranges for the services to its
customers outside the home service provider's licensed
service area.
``(10) Serving carrier.--The term `serving carrier' means a
facilities-based carrier providing mobile telecommunications
service to a customer outside a home service provider's or
reseller's licensed service area.
``(11) Mobile telecommunications service.--The term `mobile
telecommunications service' means commercial mobile radio
service, as defined in section 20.3 of the Commission's
regulations (47 C.F.R. 20.3).
``(12) Enhanced zip code.--The term `enhanced zip code' means
a United States postal zip code of 9 or more digits.
``SEC. 810. COMMISSION NOT TO HAVE JURISDICTION OF TITLE.
``Notwithstanding any other provision of this Act, the Commission
shall have no jurisdiction over the interpretation, implementation, or
enforcement of this title.
``SEC. 811. NONSEVERABILITY.
``If a court of competent jurisdiction enters a final judgment on the
merits that is no longer subject to appeal, which substantially limits
or impairs the essential elements of this title based on Federal
statutory or Federal Constitutional grounds, or which determines that
this title violates the United States Constitution, then the provisions
of this title are null and void and of no effect.
``SEC. 812. NO INFERENCE.
``(a) Internet Tax Freedom Act.--Nothing in this title may be
construed as bearing on Congressional intent in enacting the Internet
Tax Freedom Act or as affecting that Act in any way.
``(b) Telecommunications Act of 1996.--Nothing in this title shall
limit or otherwise affect the implementation of the Telecommunications
Act of 1996 or the amendments made by that Act.''.
(b) Effective Date.--The amendment made by subsection (a) applies to
customer bills issued after the first day of the first month beginning
more than 2 years after the date of enactment of this Act.
SEC. 4. GAO DETERMINATION OF FCC REGULATORY FEES.
Within 180 days after the date of the enactment of this Act, the
Comptroller General of the United States shall--
(1) conduct a review of the regulatory fees with respect to
mobile telecommunications services that were collected during
fiscal years 1998, 1999, and 2000 by the Federal Communications
Commission to determine--
(A) whether such fees were assessed in accordance
with section 9 of the Communications Act of 1934 (47
U.S.C. 159) and applicable public notices; and
(B) whether the Commission acquired information
related to the assessment of such fees in a timely and
accurate manner, and has maintained such information,
that is sufficient to support the transactions; and
(2) submit a report to the Congress regarding such review and
determinations.
SEC. 5. COMMERCE IN ELECTRONIC EAVESDROPPING DEVICES.
(a) Prohibition on Modification.--Section 302(b) of the
Communications Act of 1934 (47 U.S.C. 302a(b)) is amended by inserting
before the period at the end thereof the following: ``, or modify any
such device, equipment, or system in any manner that causes such
device, equipment, or system to fail to comply with such regulations''.
(b) Prohibition on Commerce in Scanning Receivers.--Section 302(d) of
such Act (47 U.S.C. 302a(d)) is amended to read as follows:
``(d) Equipment Authorization Regulations.--
``(1) Privacy protections required.--The Commission shall
prescribe regulations, and review and revise such regulations
as necessary in response to subsequent changes in technology or
behavior, denying equipment authorization (under part 15 of
title 47, Code of Federal Regulations, or any other part of
that title) for any scanning receiver that is capable of--
``(A) receiving transmissions in the frequencies that
are allocated to the domestic cellular radio
telecommunications service or the personal
communications service;
``(B) readily being altered to receive transmissions
in such frequencies;
``(C) being equipped with decoders that--
``(i) convert digital domestic cellular radio
telecommunications service, personal
communications service, or protected
specialized mobile radio service transmissions
to analog voice audio; or
``(ii) convert protected paging service
transmissions to alphanumeric text; or
``(D) being equipped with devices that otherwise
decode encrypted radio transmissions for the purposes
of unauthorized interception.
``(2) Privacy protections for shared frequencies.--The
Commission shall, with respect to scanning receivers capable of
receiving transmissions in frequencies that are used by
commercial mobile services and that are shared by public safety
users, examine methods, and may prescribe such regulations as
may be necessary, to enhance the privacy of users of such
frequencies.
``(3) Tampering prevention.--In prescribing regulations
pursuant to paragraph (1), the Commission shall consider
defining `capable of readily being altered' to require scanning
receivers to be manufactured in a manner that effectively
precludes alteration of equipment features and functions as
necessary to prevent commerce in devices that may be used
unlawfully to intercept or divulge radio communication.
``(4) Warning labels.--In prescribing regulations under
paragraph (1), the Commission shall consider requiring labels
on scanning receivers warning of the prohibitions in Federal
law on intentionally intercepting or divulging radio
communications.
``(5) Definitions.--As used in this subsection, the term
`protected' means secured by an electronic method that is not
published or disclosed except to authorized users, as further
defined by Commission regulation.''.
(c) Implementing Regulations.--Within 90 days after the date of
enactment of this Act, the Federal Communications Commission shall
prescribe amendments to its regulations for the purposes of
implementing the amendments made by this section.
SEC. 6. UNAUTHORIZED INTERCEPTION OR PUBLICATION OF COMMUNICATIONS.
Section 705 of the Communications Act of 1934 (47 U.S.C. 605) is
amended--
(1) in the heading of such section, by inserting
``INTERCEPTION OR'' after ``UNAUTHORIZED'';
(2) in the first sentence of subsection (a), by striking
``Except as authorized by chapter 119, title 18, United States
Code, no person'' and inserting ``No person'';
(3) in the second sentence of subsection (a)--
(A) by inserting ``intentionally'' before
``intercept''; and
(B) by striking ``communication and divulge'' and
inserting ``communication, and no person having
intercepted such a communication shall intentionally
divulge'';
(4) in the fourth sentence of subsection (a)--
(A) by inserting ``(A)'' after ``intercepted,
shall''; and
(B) by striking ``thereof) or'' and inserting
``thereof); or (B)'';
(5) by striking the last sentence of subsection (a) and
inserting the following: ``Nothing in this subsection prohibits
an interception or disclosure of a communication as authorized
by chapter 119 of title 18, United States Code.'';
(6) in subsection (e)(1)--
(A) by striking ``fined not more than $2,000 or'';
and
(B) by inserting ``or fined under title 18, United
States Code,'' after ``6 months,'';
(7) in subsection (e)(3), by striking ``any violation'' and
inserting ``any receipt, interception, divulgence, publication,
or utilization of any communication in violation'';
(8) in subsection (e)(4), by striking ``any other activity
prohibited by subsection (a)'' and inserting ``any receipt,
interception, divulgence, publication, or utilization of any
communication in violation of subsection (a)''; and
(9) by adding at the end of subsection (e) the following new
paragraph:
``(7) Notwithstanding any other investigative or enforcement
activities of any other Federal agency, the Commission shall
investigate alleged violations of this section and may proceed to
initiate action under section 503 of this Act to impose forfeiture
penalties with respect to such violation upon conclusion of the
Commission's investigation.''.
Purpose and Summary
The purpose of the bill is to address three interrelated
issues relevant to the provision of wireless services to the
American people: taxation of wireless telephone calls by States
and localities; regulatory fees paid by wireless
telecommunications companies to the Federal Communications
Commission; and the privacy protections afforded users of
wireless telecommunications services. Together, these
provisions affect the overall service that wireless
telecommunications providers are able to offer consumers.
Section 3 provides a uniform national rule for determining
the location from which mobile telecommunications services are
provided in order to properly apply State and local taxes,
charges, and fees. Section 4 establishes a GAO report to
determine whether the FCC has correctly imposed fees on
wireless providers. Section 5 and 6 enhance the privacy of
users of cellular and other mobile communications services. The
provisions in Section 5 and 6 are necessary to prohibit
modification of currently available scanners and to prevent the
development of a market for new digital scanners capable of
intercepting digital communications.
Background and Need for Legislation
The growth of the wireless industry has been staggering
over the last few years. Wireless subscribership has grown from
approximately 20 million in 1994 to approximately 91 million
today. In addition, revenues for the wireless carriers have
grown three-fold over this time period, while the price per
minute for wireless service has dropped substantially. The
popularity of wireless services has increased pressure to
resolve difficult public policy issues facing the industry,
including the taxation of wireless telephone calls, the
regulatory fees paid by wireless providers, and the privacy
protections afforded wireless users.
Taxation of wireless telephone calls is a major problem
facing wireless telephone subscribers, the wireless
telecommunications industry, and the local taxing
jurisdictions. Many States and localities (e.g., cities,
counties, school districts) levy taxes on wireless service
providers and/or the consumption of wireless services that
occur within their respective jurisdiction. Beyond the many
taxes that wireless service providers are subject to under
State and local authority, many States and localities impose
taxes or fees on wireless services used by end-users or
consumers. These taxes or fees commonly have been referred to
as transactional taxes. For instance, a locality may require a
wireless telephone subscriber to pay an eight percent tax for
the total wireless service ``used'' within its jurisdiction. In
these circumstances, wireless service providers act on behalf
of States and localities to collect the taxes from end-users.
Usually, wireless service providers will provide a line-item on
their bill indicating the State or locality imposed tax.
Transactional taxes require a determination of where the
services are sold and purchased in order to apply the taxes
applicable in the respective jurisdiction. Given the
traditional network structure of wireless services and common
practices of wireless telephone subscribers (e.g.,
``roaming''), many States and localities have used differing
methodologies to determine where the services are sold and
purchased and thus qualify for a tax. Some taxing jurisdictions
impose taxes based on where the wireless call originated
(originating cell site, tower or switch); others impose taxes
based on where the call was terminated; and others impose taxes
based on end-user or consumers' billing address.
Confusion over traditional tax policy increases the
likelihood that multiple jurisdictions can claim authority to
tax the same wireless transactions, while other transactions
may be subject to no taxation. This makes it difficult for
States and localities to enforce current law and often leads to
extensive audits. Further, wireless service providers are
forced to bill their subscribers based on these differing
methodologies. This issue may become even more complex as the
use of wireless service increases and new calling plans are
developed to meet consumer need (e.g., flat rate calling plans
vs. per minute fees). As new calling plans begin to develop
using ``buckets'' of minutes (e.g., 500 minutes for $39.95) the
ability to apportion the cost of each wireless call decreases
and thus makes it more difficult to apply traditional
transactional taxes.
The wireless privacy portions of the bill are an important
component for wireless telephone customers. A large percentage
of cellular services used today are still based on analog
technology (but this is quickly changing). Analog
communications are susceptible to unauthorized eavesdropping
from scanners since voice signals, an analog form of
communication, need not be decoded when intercepted over a
scanner. During an oversight hearing on February 5, 1997, the
Subcommittee on Telecommunications, Trade, and Consumer
Protection saw a demonstration of how easily over-the-shelf
scanners may be modified to enable them to intercept cellular
communications. Digital cellular, the next generation of
cellular services, and digital personal communications services
(PCS) are less susceptible to unauthorized eavesdropping than
analog cellular. PCS services are digital services that combine
voice services with data (paging, messaging, caller
identification) and possibly video services, over the same
handset. While digital cellular and PCS are not immune from
eavesdropping, they are currently more secure than analog
cellular because the equipment for intercepting digital calls
is vastly more expensive and complex than existing, off-the-
shelf scanners that intercept analog communications (e.g., $200
vs. $10,000-$30,000). However, one of the purposes of the bill
is to prevent a market from developing for less expensive
digital scanners by clearly prohibiting the authorization of
such scanners by the FCC.
Several existing statutes are intended to protect cellular
users' privacy. Section 705(a) of the Communications Act of
1934 prohibits the unauthorized interception and divulgence of
radio communications, including cellular calls. This statute is
not limited by its terms to analog radio communications and,
therefore, applies to digital cellular and PCS, as well as to
other commercial mobile radio services such as paging,
specialized mobile services, messaging services, etc. FCC rules
also prohibit the interception of private conversations by
radio scanners, whether or not the content of such radio
communications is divulged (47 C.F.R. Sec. 15.9).
Section 705(e)(4) of the Communications Act makes it
illegal for a person, knowing or having reason to know that
equipment is intended for the unauthorized interception and
divulgence of radio communications, to manufacture, assemble,
modify, import, export, sell, or distribute that equipment.
However, the FCC has only enforced this provision for satellite
cable piracy. In addition to these provisions of the
Communications Act and FCC regulations, the Electronic
Communications Protection Act, (18 U.S.C. Sec. 2511 et seq.
(1986) (ECPA)), also prohibits the unauthorized interception or
disclosure of cellular and other radio communications. Under
ECPA, the manufacture, assembly, possession, sale or use of
scanning devices which are ``primarily useful'' for
surreptitious interception and are sent through interstate mail
are prohibited. ECPA is the principal statute used to prosecute
unlawful interceptions. ECPA prohibits knowingly advertising
interstate for any device ``primarily useful'' for the
surreptitious interception of electronic communications. See
section 2512(1)(c).
While interception of cellular telephone calls is illegal,
it is legal under existing statutes to intercept radio
communications outside of the cellular bands as long as the
communication is not divulged or does not ``benefit'' the
interceptor. For example, people may intercept public safety
communications on emergencies occurring in their vicinity.
Typically, these communications can be intercepted by an off-
the-shelf scanner. Prior to passage of the Telephone Disclosure
and Dispute Resolution Act (TDDRA) (P.L. 102-556; 47 U.S.C.
Sec. 302(a)), which codified existing section 302 of the
Communications Act of 1934, over 22 brands of scanners were
capable of intercepting the cellular bands. TDDRA was designed,
in part, to decrease the manufacture and availability of
scanning devices capable of intercepting cellular
communications. Under TDDRA, manufacturers are prohibited from
manufacturing scanners that can be ``readily altered'' to
intercept cellular communications. FCC Rule 15.121 defines
``readily altered.'' Specifically, existing section 302(b) of
the Communications Act of 1934 prohibits the manufacture,
import, or sale of scanning devices that are capable of
intercepting cellular calls, or of being ``readily altered''
for such interception. In section 302(d), Congress required the
FCC to promulgate regulations denying authorization to scanners
that are capable of receiving cellular transmissions. See 47
C.F.R. Sec. Sec. 15.121 and 15.37(f). The Committee finds that
current scanning receivers are not being manufactured in a
manner to effectively prohibit interception of these
frequencies and the current law does not apply to new
technologies.
Hearings
The Subcommittee on Telecommunications, Trade, and Consumer
Protection held a legislative hearing on H.R. 3489, the
Wireless Telecommunications Sourcing and Privacy Act on April
6, 2000. The Subcommittee received testimony from: Tom Wheeler,
President and CEO, Cellular Telecommunications Industry
Association; Dan R. Bucks, Executive Director, Multistate Tax
Commission; Frank Shafroth, Director, Office of State Federal
Relations, National Governors' Association (NGA); and Joseph E.
Brooks, Councilman, City of Richmond, representing the National
League of Cities.
Committee Consideration
On May 10, 2000, the Subcommittee on Telecommunications,
Trade, and Consumer Protection met in open markup session and
approved H.R. 3489, the Wireless Telecommunications Sourcing
and Privacy Act, for Full Committee consideration, with an
amendment, by unanimous consent. On May 17, 2000, the Full
Committee met in open markup session, and ordered H.R. 3489
reported, as amended by the Subcommittee on Telecommunications,
Trade, and Consumer Protection, by a voice vote.
Committee Votes
Clause 3(b) of Rule XIII of the Rules of the House requires
the Committee to list the record votes on the motion to report
legislation and amendments thereto. There were no record votes
taken in connection with ordering H.R. 3489, the Wireless
Telecommunications Sourcing and Privacy Act, reported. A motion
by Mr. Bliley to order H.R. 3489 reported to the House, with an
amendment, was agreed to by a voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee held a legislative
hearing and made findings that are reflected in this report.
Committee on Government Reform Oversight Findings
Pursuant to clause 3(c)(4) of Rule XIII of the Rules of the
House of Representatives, no oversight findings have been
submitted to the Committee by the Committee on Government
Reform.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of Rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
3489, the Wireless Privacy Enhancement Act of 1999, results in
no new or increased budget authority, entitlement authority, or
tax expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of Rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 22, 2000.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3489, the Wireless
Telecommunications Sourcing and Privacy Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark Hadley
(for federal costs), Hester Grippando (for revenues), Theresa
Gullo (for the state and local impact), and Jean Wooster (for
the private-sector impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
H.R. 3489--Wireless Telecommunications Sourcing and Privacy Act
Summary: CBO estimates that enactment of H.R. 3489 would
have a negligible effect on the federal budget. The bill
contains both an intergovernmental mandate and a private-sector
mandate, as defined by the Unfunded Mandates Reform Act (UMRA).
CBO estimates that the costs of these mandates would fall below
the thresholds established by UMRA.
Two years after enactment, H.R. 3489 would prohibit state
and local governments from taxing mobile telecommunications
calls unless a customer's place of primary telephone use is
within the taxing jurisdiction of the state or local
government. In addition, H.R. 3489 would amend the
Communications Act of 1934 to prohibit modifying any equipment
used to communicate electronically in any manner that would not
comply with regulations affecting electronic eavesdropping.
Finally, the bill would require the General Accounting Office
to issue a report on regulatory fees collected by the Federal
Communications Commission (FCC) for mobile telecommunications
services during fiscal years 1998 through 2000.
Certain charges imposed on telecommunications services
either by states or the federal government under the
Telecommunications Act of 1996 to support universal service are
recorded in the federal budget as receipts and direct spending.
(Universal Service is a program intended to promote the
availability of telecommunications services at affordable
rates.) Although enactment of H.R. 3489 could affect these
charges, CBO estimates any changes would not be significant. In
addition, the bill would impose criminal penalties for
intercepting, publishing, or divulging a communication that is
not authorized. Because H.R. 3489 could affect direct spending
and receipts, pay-as-you-go procedures would apply, but CBO
estimates that any such effects would be negligible. CBO
estimates that net discretionary costs to the FCC to implement
the provisions of this bill also would be negligible.
H.R. 3489 contains an intergovernmental mandate as defined
in UMRA, because it would preempt state and local government
laws by prohibiting jurisdictions from taxing mobile
telecommunication services unless the jurisdictions contain a
customer's place of primary use. While data are limited, CBO
estimates the mandate would not impose significant net costs on
state or local governments and would not exceed the threshold
established in UMRA ($55 million in 2000, adjusted annually for
inflation).
H.R. 3489 would impose a new private-sector mandate, as
defined in UMRA, on manufacturers, importers, sellers, and
those who modify scanning receivers. The direct cost of the
mandate would be well below the annual threshold established in
UMRA for private-sector mandates ($109 million in 2000,
adjusted for inflation).
Estimated cost to the Federal Government: Under the
Universal Service Fund established by the Telecommunications
Act of 1996, the FCC seeks to provide universal access to
telecommunications services through various charges to some
telephone companies and payments to others. The 1996 act also
permits states to establish additional collections and payments
to preserve and advance universal service, so long as these
mechanisms are not inconsistent with federal law.
The Universal Service Fund records these transactions on
the federal budget as governmental receipts and direct
spending. To the extent that states choose to use charges on
mobile telecommunications service to support universal service,
H.R. 3489 could result in reduced revenues collected and lower
direct spending. But based on information from the FCC and the
Universal Service Administrative Company, CBO estimates that
any change in revenues and direct spending as a result of
enacting this legislation would be negligible.
H.R. 3489 would amend the Communications Act of 1934 to
prohibit modifying any equipment used to communicate
electronically in any manner that would not comply with
regulations affecting electronic eavesdropping. The bill would
direct the FCC to prepare regulations to deny the authorization
to use FCC equipment for certain scanning receivers that may be
capable of unauthorized interception of communication
transmissions. Based on information from the FCC, CBO estimates
that these regulations would cost less than $500,000 to
promulgate, assuming availability of appropriated funds.
The bill also would amend the Communications Act of 1934 to
impose criminal penalties for intercepting, publishing, or
divulging a communication that is not authorized; consequently,
the federal government might collect additional fees if H.R.
3489 is enacted. Collections of such fees are recorded in the
budget as governmental receipts (revenues), which are deposited
in the Crime Victims Fund and spent in subsequent years. CBO
estimates that any additional receipts and direct spending that
would occur under this bill would be negligible. Under current
law, any enforcement costs that the agency incurs are offset by
fees charged to the industries that the FCC regulates. As a
result, we estimate that this provision would not result in any
significant net cost to the federal government.
CBO estimates that the other provisions of the bill would
have no significant budgetary impact. The costs of this
legislation fall within budget function 370 (commerce and
housing credit).
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. As noted
above, H.R. 3489 could affect direct spending and receipts, but
CBO estimates that any such effects would be negligible.
Estimated impact on State, local, and tribal governments:
H.R. 3489 would preempt state and local government laws by
prohibiting jurisdictions from taxing mobile telecommunications
services unless the jurisdictions contain a customer's place of
primary use. Such a preemption would be a mandate as defined in
UMRA. This change could initially benefit some taxing
jurisdictions and harm others depending on the number of
customers with places of primary use within each jurisdiction.
The bill would not require or prohibit state and local
governments from taxing telecommunications services or affect
the rate at which such services could be taxed. It would,
however, require a uniform basis for determining which
jurisdictions may tax mobile telecommunications services.
Because the current system of taxing mobile
telecommunications services is very complex, it is unclear what
effect this change may have on revenues from such taxes. Based
on information from groups representing the affected state and
local governments, however, CBO estimates that the bill would,
in total, be approximately revenue neutral across the country,
although the distribution of revenues among jurisdictions would
likely change.
Estimated impact on the private sector: H.R. 3489 would
impose a new private-sector mandate, as defined in UMRA, on
manufacturers, importers, sellers, and those who modify
scanning receivers. Section 5 of the bill would expand the
FCC's criteria for certifying equipment before it can be
imported or marketed. Based on information provided by the
leading manufacturer of scanning receiversand the FCC, CBO
estimates that the direct cost of complying with H.R. 3489 would fall
well below the statutory threshold for private-sector mandates ($109
million in 2000, adjusted annually for inflation).
Previous CBO estimates: On May 9, 2000, CBO transmitted a
cost estimate of S. 1755, the Mobile Telecommunications
Sourcing Act, as ordered reported by the Senate Committee on
Commerce, Science, and Transportation on April 13, 2000. S.
1755 is nearly identical to the provisions of H.R. 3489 that
concern state taxation of mobile telephone services, and our
cost estimates are the same for these provisions.
On February 22, 1999, CBO transmitted a cost estimate of
H.R. 514, the Wireless Privacy Enhancement Act of 1999, as
ordered reported by the House Committee on Commerce on February
11, 1999. H.R. 514 is nearly identical to the provisions of
H.R. 3489 that concern electronic eavesdropping, and our cost
estimates are the same for these provisions.
Estimate prepared by: Federal Costs: Mark Hadley; revenues:
Hester Grippando; impact on State, Local, and Tribal
Governments: Theresa Gullo; and impact on the Private Sector:
Jean Wooster.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Sec. 1. Short title
Section 1 designates the short title of the bill as the
``Wireless Telecommunications Sourcing and Privacy Act.''
Sec. 2. Findings
Section 2 enumerates Congressional findings for the bill.
Sec. 3. Amendment of Communications Act of 1934 to provide rules for
determining State and local government treatment of charges
related to mobile telecommunications services
Over the last few years, the relevant parties have been
working together in an effort to design a new uniform mechanism
to impose transactional taxes on wireless services. The
Cellular Telecommunications Industry Association (CTIA), on
behalf of the wireless industry, and a number of individual
wireless companies have been working with the Multistate Tax
Commission, the National Governors Association (NGA), the
Federation of Tax Administrators, and the National League of
Cities to develop a mechanism to simplify the transactional
taxes imposed on wireless services. Last year, the parties
agreed on approach and presented it to Congress with the goal
of enacting it into law. The contents of that agreement are
included in section 3 of H.R. 3489. The approach is an effort
to move away from a strict transactional tax that requires a
determination of the sale and purchase of the wireless service
and replace it with one address that will serve as the point
for taxing wireless services. This effort is intended to reduce
the possibility of extensive litigation and bring simplicity to
the current taxing schemes.
Section 3(a) adds a new title VIII to the Communications
Act: ``State and Local Treatment of Charges for Mobile
Telecommunications Services.''
Section 801(a) provides that the legislation applies to any
tax, charge, or fee imposed by any taxing authority as a fixed
charge for each customer or measured by gross amounts charged
to customers for mobile telecommunications services. The legal
imposition of the tax, charge, or fee does not matter.
Section 801(b) identifies general taxes that are not
subject to the provisions of the title. Taxes excluded from the
title include, among others, income taxes and taxes assessed on
an equitably apportioned amount that is not determined on a
transactional basis.
Section 801(c)(1) provides that the title does not apply to
the determination of the taxing situs of prepaid telephone
calling services.
Section 801(c)(2) provides that the title does not affect
the taxability of either the initial sale or subsequent resale
of mobile services where the Internet Tax Freedom Act (title XI
of P.L. 105-277) would preclude a taxing jurisdiction from
imposing a tax, charge, or fee on such mobile
telecommunications services.
Section 801(c)(3) provides that the title does not apply to
air- ground radiotelephone services as defined in 47 C.F.R.
Sec. 22.99 as of June 1, 1999.
Section 802 provides that mobile telecommunications
services can only be subjected to a tax, charge, or fee by the
taxing jurisdictions whose territorial limits encompass the
customer's place of primary use, regardless of where the mobile
telecommunications services originate, terminate, or pass
through. The rule only applies to charges for mobile
telecommunications services for which charges are billed by or
for the home service provider with which the customer
contracts. This section authorizes States and localities to
impose taxes based upon the place of primary use and prohibits
them from imposing taxes on mobile telecommunications services
on any other basis.
Section 803 clarifies that the title does not give taxing
jurisdictions any authority that they do not already possess to
impose a tax, charge, or fee. This section also clarifies that
the title does not modify, impair, or supersede any current
authority possessed by State and local taxing jurisdictions
except as expressly provided by this title.
Section 804 establishes a mechanism through which home
service providers can determine the appropriate taxing
authorities for a customer's place of primary use. It allows
the States to provide home service providers with an electronic
database containing such information in a uniform format. The
database will match street addresses (in standard postal
format) within the State to the applicable taxing
jurisdictions. Section 804 also permits a designated database
provider to provide an electronic database if a State does not
provide such a database.
Section 804 also provides that a home service provider that
relies on the information contained in an electronic database
will be held harmless from any tax, charge, or fee that
otherwise would be due solely as a result of an error or
omission in the database.
Section 805 provides that a home service provider is held
harmless from any tax, charge, or fee that would otherwise be
due if the database described in section 804 does not exist in
a State and the home service provider uses an enhanced zip code
to determine the taxing jurisdictions associated with a
customer's place of primary use. A home service provider must
exercise due diligence when assigningtaxing jurisdictions using
the enhanced zip code method for the provisions of this section to
apply. Additional requirements are set forth in the section regarding
the use of the enhanced zip code method.
Section 806 provides that a taxing jurisdiction under
specified procedures can require a home service provider to
change prospectively the customer's place of primary use or
require the home service provider to change prospectively the
applicable taxing jurisdiction(s) assigned to a customer's
place of primary use.
Section 807(a) establishes that a home service provider has
the principal responsibility for obtaining and maintaining a
customer's place of primary use. A home service provider may
rely on information provided by the customer if such reliance
is made in good faith. Section 807(a) also provides that, with
respect to taxes customarily itemized and passed through on the
customer's bills, the home service provider is not generally
responsible for taxes subsequently determined to have been
sourced in error.
Section 807(b) provides that, in the case of a contract
existing prior to the effective date of the Act, a home service
provider may rely on its previous determination of the
applicable taxing jurisdiction(s) for the remainder of the
contract, excluding extensions or renewals of the contract.
Section 808(a) provides that the title does not modify,
impair, or supersede any law that authorizes a State or local
taxing jurisdiction to collect a tax, charge, or fee from a
customer who has failed to provide its place of primary use.
Section 808(b) states that a home service provider must
treat charges that reflect a bundled product, only part of
which is taxable, as fully taxable, unless reasonable
identification of the non-taxable charges is possible from the
home service provider's business records kept in the regular
course of business.
Section 808(c) limits non-taxability of mobile
telecommunications services in a jurisdiction where mobile
telecommunications services are not taxable. A customer must
treat charges as taxable unless the home service provider
separately states the non-taxable charges or provides
verifiable data from its business records kept in the regular
course of business that reasonably identifies the non-taxable
charges.
Section 809 provides definitions specific to the title.
Section 809(3) defines ``place of primary use'' as the
customer's business or residential street address in the
licensed service are of the home service provider. Place of
primary use is used to determine the taxing jurisdiction(s)
that may tax the provision of mobile telecommunications
services. If a home service provider has a national or regional
service area, the place of primary use is still limited to the
customer's business or residential street address within that
larger service area.
Section 809(6) defines ``customer.'' Under a special rule,
customers include employees (the end users) of businesses that
contract for mobile telecommunications services. Customers do
not include (i) resellers or (ii) a serving carrier providing
wireless services for a customer who is outside the customer's
home service provider's licensed service area.
Section 809(9) defines ``reseller.'' A reseller does not
include a serving carrier providing mobile telecommunications
services for a customer who is outside the customer's home
service provider's licensed service area.
Section 810 provides that the FCC has no jurisdiction over
the interpretation, implementation, or enforcement of this
title.
Section 811 provides for nonseverability in the event of a
judicial determination that the title is unconstitutional or
otherwise substantially impaired from accomplishing its
objective.
Section 812(a) provides that nothing in the title is
intended to reflect upon the intent of Congress in enacting the
Internet Tax Freedom Act.
Section 812(b) provides that nothing in the title impacts
the implementation of the Telecommunications Act of 1996 or the
amendments made by that Act.
Section 3(b) establishes an effective date of the first day
of the first month beginning more than two years after
enactment. The transitional delay allows both business and tax
administrators to gear up for a change in their existing
systems, including the possible use of the database authorized
by section 804.
Sec. 4. GAO determination of FCC regulatory fees
Section 4 requires the General Accounting Office (GAO),
within 180 days after the date of enactment, to conduct a
review of regulatory fees paid by wireless telecommunications
providers for fiscal years 1998, 1999, and 2000. In conducting
the review, GAO is required to determine whether such fees were
assessed in accordance with section 9 of the Communications Act. GAO
would be required to determine whether the FCC acquired information
related to the assessment of such fees in a timely and accurate manner,
and has maintained such information. Finally, section 4 requires GAO to
submit its findings in a report to Congress.
The Committee is concerned that the FCC has not properly
assessed fees on wireless telecommunications providers as
required by section 9. The GAO report is designed to determine
the exact mechanism the FCC used to assess fees for fiscal year
1998 until present and determine whether the fees collected
were accurate to meet the statutory requirements. This analysis
is intended to provide an in-depth examination of the
underlying information that the FCC used to calculate these
fees to ensure that it was and is accurate. Improperly
allocating the cost of fees on wireless telecommunications
providers has a direct impact on the revenues of wireless
telecommunications providers and thus on the rates that they
are able to offer consumers. Further, the FCC is obligated to
correctly allocate fees under section 9 to prevent one industry
segment from paying too much, while other industry segments pay
too little. The information provided by the GAO should be
helpful in determining whether corrective action is necessary.
Sec. 5. Commerce in electronic eavesdropping devices
Section 5(a) extends the prohibition in section 302(b) of
the Communications Act of 1934 to ``modifying'' scanning
devices. While the Committee believes that ``modifying'' is
already covered by the prohibition against ``manufacturing''
non-compliant scanners, this provision makes the prohibition
explicit to prevent any misreading of the statute. The
Committee does not intend to prohibit amateurs from modifying
linear amplifiers after purchase, as permitted by Commission
rules, to allow the devices to operate in the amateur 12-meter
and 10-meter bands. Nor does the Committee intend that section
5(a) prohibit amateurs from building or modifying one amplifier
per year to enable this capability, as also permitted by
Commission rules. Likewise, the Committee does not intend that
this section be interpreted in a manner that permits the
Commission to take actions against an amateur operator who is
operating within the terms of his or her license.
Finally, the Committee does not intend that section 5(a) be
interpreted in a manner that discourages manufacturers or
dealers of amateur equipment from providing amateur licensees
with information about permissible modifications of
transceivers to enable them to transmit and receive on Military
Affiliate Radio Service and the Civil Air Patrol, to the extent
such transmission and reception is permissible under 18 U.S.C.
Sec. 2511(g) or other statutes. The Committee expects that the
new regulations required under section 5 will preserve the
ability of amateurs to modify transceivers for the legitimate
purposes discussed above.
Section 5(b) makes amendments to section 302(d) of the
Communications Act of 1934. Section 5(b) amends paragraph
302(d)(1) to expand its scope to cover new communications
technologies such as personal communications services and
protected specialized mobile radio and paging services. It also
requires that the Commission deny equipment authorization to
scanners that are capable of being equipped with certain
decoders. While the Committee does not intend to hamper the
inclusion of consumer-friendly features on radio scanners such
as external audio jacks, manufacturers should design scanners
with ports that the manufacturer does not anticipate can be
used: (1) to equip the scanner with a decoder that can convert
digital cellular, personal communications services, or
protected specialized mobile radio services to analog voice
audio; (2) to convert protected paging services to alphanumeric
text; or (3) to otherwise decrypt radio transmissions for the
purposes of unauthorized interception. Thus, after the
enactment of this provision, manufacturers will be under an
obligation to design scanners with features that the
manufacturer does not anticipate can be used to equip such
scanners with prohibited decoders.
The Committee notes that nothing in this bill is intended
to impede the development and deployment of scanning receivers
designed as an integral part of a licensed wireless
communications station or wireless communications system, or
designed as communications test equipment not available to the
general public.
Section 5(b) amends and replaces section 302(d)(2) of the
Communications Act of 1934 with a new provision providing the
Commission with the authority to prescribe rules to enhance the
privacy of users of frequencies shared by commercial services and the
public safety community. Section 5(b) also adds a new paragraph
302(d)(3) that requires that the Commission consider a requirement that
scanning receivers be manufactured in a manner that prevents any
tampering or alteration by the user that permits the device to be used
unlawfully for interception or divulgence of radio communications. By
including this provision, the Committee intends that the order adopting
the regulations reflect on the record a discussion of possible means
for manufacturers to prevent tampering or alteration of scanners for
such illegal use. Section 302(d)(4) requires the Commission to consider
requiring scanning manufacturers to include warning labels on scanners
notifying users of prohibited uses. Likewise, the Committee intends
that the order adopting the regulations reflect on the record a
discussion of the benefits of warning labels. Section 302(d)(5) adds a
definition of ``protected'' to the statute to be used in conjunction
with the amendments made by this bill to paragraph 302(d)(1).
Section 5(b) recognizes that some frequencies available for
commercial mobile services are shared with public safety and
other private wireless users. Again, nothing in this
legislation is intended to impede the development and
deployment of scanning receivers designed as an integral part
of a licensed wireless communications station or wireless
communications system, or designed as communications test
equipment not available to the general public.
Section 5(c) directs the Commission to revise its rules,
within 90 days, to implement the changes made by section 5. For
purposes of subsection 5(b) and the implementing regulations
required by subsection 5(c), the Committee expects that the
Commission will provide an effective date to the regulations
that will provide an adequate transition period for scanner
manufacturers to comply, so that scanner manufacturers or
distributors are able to sell their current inventory.
Therefore, the Committee expects the Commission consider the
record of the rulemaking required by section 5, a discussion of
the manufacturers' normal product development and production
cycles, in determining effective dates for the relevant
requirements within the regulations, while also considering the
overall purpose of the bill to increase the privacy of wireless
users. Further, the Committee expects the Commission to
promulgate regulations under section 5(d)(2) which ensure that
any privacy enhancement measures resulting from such
regulations do not interfere with or impede the otherwise
proper use of radio scanners for reception of public safety and
other allowed frequencies under law.
Sec. 6. Unauthorized interception or publication of communications
Section 6(a) makes amendments to section 705 of the
Communications Act of 1934. Paragraph (1) alters the heading
provided to section 705. Paragraph (2) strikes ``except as
authorized by chapter 119, title 18, United States Code'' from
the first sentence of section 705(a) of the Communications Act.
This is later addressed by paragraph (4).
Paragraph (3) eliminates the requirement that a violation
of section 705(a) consist of both interception and divulgence.
The bill separates this provision into intentional interception
or divulgence and, thus, the intentional interception itself is
illegal. Similarly, intentional divulgence alone--divulging the
contents of a radio communication knowing that it was
intercepted without the sender's authorization--is also
illegal. Intentional divulgence is actionable under this
paragraph whether or not the party divulging the communication
was the same party that intercepted the communication.
Paragraph (4) preserves the authorization for certain
interceptions or disclosures provided in chapter 119 of title
18, United States Code. That chapter governs wire and
electronic communications interception and interception of oral
communications. Section 2511 of that chapter provides a number
of exceptions to the chapter's prohibitions on interception.
The majority of these exceptions relate to government
interception. However, section 2511(g) provides a number of
broad exceptions for the interception by private parties of
radio communications, including those that are transmitted: (a)
over a system that is configured for ready access by the
general public; (b) by any station for the use of the general
public, or that relates to ships, aircraft, vehicles, or
persons in distress; (c) by any governmental, law enforcement,
civil defense, private land mobile, or public safety
communications system that is readily accessible to the general
public; (d) by a station operating in the amateur, citizens
band (CB); and, (e) by any marine or aeronautical
communications system.
Because the Committee preserved the chapter 119 exceptions
in its amendment of section 705(a) of the Communications Act,
the Committee does not intend for the Commission or any other
enforcement agency to investigate or fine parties for the
interceptions authorized by chapter 119. Therefore, the
Committee does not intend for uses of scanning receivers and
receiving radios such as short-wave radios, that are consistent
with the section 2511(g) exceptions to be investigated or fined
under section 705(a).
Paragraph (5) increases the penalties for violating section
705(a) to be consistent with those under ECPA, relating to the
interception or divulgence prohibition. Currently, the fine for
willful violation is $2,000, 6 months in jail, or both; under
ECPA, the penalties can be increased based upon repeated
violations. This paragraph (5), therefore, provides an
additional penalty option.
Paragraphs (6) and (7) make appropriate changes to sections
705(e)(3) and (4) of the Communications Act to conform to the
changes made by paragraph 6(a)(3) of the bill.
Paragraph (8) adds a new section 705(e)(7) of the
Communications Act of 1934 which requires the FCC to
investigate and take action, notwithstanding any other
investigations by other agencies or departments, on possible
violations of the Communications Act or Commission rules on
wireless communications privacy. With respect to the
responsibility for enforcement under this paragraph, the
Committee does not intend to preclude the Department of Justice
or the Federal Bureau of Investigation from initiating and
conducting separate or parallel investigations of allegations
of violations of chapter 119 of title 18 of the United States
Code.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
COMMUNICATIONS ACT OF 1934
* * * * * * *
TITLE III--PROVISIONS RELATING TO RADIO
PART I--GENERAL PROVISIONS
* * * * * * *
SEC. 302. DEVICES WHICH INTERFERE WITH RADIO RECEPTION.
(a) * * *
(b) No person shall manufacture, import, sell, offer for
sale, or ship devices or home electronic equipment and systems,
or use devices, which fail to comply with regulations
promulgated pursuant to this section, or modify any such
device, equipment, or system in any manner that causes such
device, equipment, or system to fail to comply with such
regulations.
* * * * * * *
[(d)(1) Within 180 days after the date of enactment of this
subsection, the Commission shall prescribe and make effective
regulations denying equipment authorization (under part 15 of
title 47, Code of Federal Regulations, or any other part of
that title) for any scanning receiver that is capable of--
[(A) receiving transmissions in the frequencies
allocated to the domestic cellular radio
telecommunications service,
[(B) readily being altered by the user to receive
transmissions in such frequencies, or
[(C) being equipped with decoders that convert
digital cellular transmissions to analog voice audio.
[(2) Beginning 1 year after the effective date of the
regulations adopted pursuant to paragraph (1), no receiver
having the capabilities described in subparagraph (A), (B), or
(C) of paragraph (1), as such capabilities are defined in such
regulations, shall be manufactured in the United States or
imported for use in the United States.]
(d) Equipment Authorization Regulations.--
(1) Privacy protections required.--The Commission
shall prescribe regulations, and review and revise such
regulations as necessary in response to subsequent
changes in technology or behavior, denying equipment
authorization (under part 15 of title 47, Code of
Federal Regulations, or any other part of that title)
for any scanning receiver that is capable of--
(A) receiving transmissions in the
frequencies that are allocated to the domestic
cellular radio telecommunications service or
the personal communications service;
(B) readily being altered to receive
transmissions in such frequencies;
(C) being equipped with decoders that--
(i) convert digital domestic cellular
radio telecommunications service,
personal communications service, or
protected specialized mobile radio
service transmissions to analog voice
audio; or
(ii) convert protected paging service
transmissions to alphanumeric text; or
(D) being equipped with devices that
otherwise decode encrypted radio transmissions
for the purposes of unauthorized interception.
(2) Privacy protections for shared frequencies.--The
Commission shall, with respect to scanning receivers
capable of receiving transmissions in frequencies that
are used by commercial mobile services and that are
shared by public safety users, examine methods, and may
prescribe such regulations as may be necessary, to
enhance the privacy of users of such frequencies.
(3) Tampering prevention.--In prescribing regulations
pursuant to paragraph (1), the Commission shall
consider defining ``capable of readily being altered''
to require scanning receivers to be manufactured in a
manner that effectively precludes alteration of
equipment features and functions as necessary to
prevent commerce in devices that may be used unlawfully
to intercept or divulge radio communication.
(4) Warning labels.--In prescribing regulations under
paragraph (1), the Commission shall consider requiring
labels on scanning receivers warning of the
prohibitions in Federal law on intentionally
intercepting or divulging radio communications.
(5) Definitions.--As used in this subsection, the
term ``protected'' means secured by an electronic
method that is not published or disclosed except to
authorized users, as further defined by Commission
regulation.
* * * * * * *
TITLE VII--MISCELLANEOUS PROVISIONS
* * * * * * *
SEC. 705. UNAUTHORIZED INTERCEPTION OR PUBLICATION OF COMMUNICATIONS.
(a) [Except as authorized by chapter 119, title 18, United
States Code, no person] No person receiving, assisting in
receiving, transmitting, or assisting in transmitting, any
interstate or foreign communication by wire or radio shall
divulge or publish the existence, contents, substance, purport,
effect, or meaning thereof, except through authorized channels
of transmission or reception, (1)to any person other than the
addressee, his agent, or attorney, (2) to a person employed or
authorized to forward such communication to its destination, (3) to
proper accounting or distributing officers of the various communicating
centers over which the communication may be passed, (4) to the master
of a ship under whom he is serving, (5) in response to a subpena issued
by a court of competent jurisdiction, or (6) on demand of other lawful
authority. No person not being authorized by the sender shall
intentionally intercept any radio [communication and divulge]
communication, and no person having intercepted such a communication
shall intentionally divulge or publish the existence, contents,
substance, purport, effect, or meaning of such intercepted
communication to any person. No person not being entitled thereto shall
receive or assist in receiving any interstate or foreign communication
by radio and use such communication (or any information therein
contained) for his own benefit or for the benefit of another not
entitled thereto. No person having received any intercepted radio
communication or having become acquainted with the contents, substance,
purport, effect, or meaning of such communication (or any part thereof)
knowing that such communication was intercepted, shall (A) divulge or
publish the existence, contents, substance, purport, effect, or meaning
of such communication (or any part [thereof) or] thereof); or (B) use
such communication (or any information therein contained) for his own
benefit or for the benefit of another not entitled thereto. [This
section shall not apply to the receiving, divulging, publishing, or
utilizing the contents of any radio communication which is transmitted
by any station for the use of the general public, which relates to
ships, aircraft, vehicles, or persons in distress, or which is
transmitted by an amateur radio station operator or by a citizens band
radio operator.] Nothing in this subsection prohibits an interception
or disclosure of a communication as authorized by chapter 119 of title
18, United States Code.
* * * * * * *
(e)(1) Any person who willfully violates subsection (a) shall
be [fined not more than $2,000 or] imprisoned for not more than
6 months, or fined under title 18, United States Code, or both.
* * * * * * *
(3)(A) Any person aggrieved by [any violation] any receipt,
interception, divulgence, publication, or utilization of any
communication in violation of subsection (a) or paragraph (4)
of this subsection may bring a civil action in a United States
district court or in any other court of competent jurisdiction.
* * * * * * *
(4) Any person who manufactures, assembles, modifies,
imports, exports, sells, or distributes any electronic,
mechanical, or other device or equipment, knowing or having
reason to know that the device or equipment is primarily of
assistance in the unauthorized decryption of satellite cable
programming, or direct-to-home satellite services, or is
intended for [any other activity prohibited by subsection (a)]
any receipt, interception, divulgence, publication, or
utilization of any communication in violation of subsection
(a), shall be fined not more than $500,000 for each violation,
or imprisoned for not more than 5 years for each violation, or
both. For purposes of all penalties and remedies established
for violations of this paragraph, the prohibited activity
established herein as it applies to each such device shall be
deemed a separate violation.
* * * * * * *
(7) Notwithstanding any other investigative or enforcement
activities of any other Federal agency, the Commission shall
investigate alleged violations of this section and may proceed
to initiate action under section 503 of this Act to impose
forfeiture penalties with respect to such violation upon
conclusion of the Commission's investigation.
* * * * * * *
TITLE VIII--STATE AND LOCAL TREATMENT OF CHARGES FOR MOBILE
TELECOMMUNICATIONS SERVICES
SEC. 801. APPLICATION OF TITLE.
(a) In General.--This title applies to any tax, charge, or
fee levied by a taxing jurisdiction as a fixed charge for each
customer or measured by gross amounts charged to customers for
mobile telecommunications services, regardless of whether such
tax, charge, or fee is imposed on the vendor or customer of the
service and regardless of the terminology used to describe the
tax, charge, or fee.
(b) General Exceptions.--This title does not apply to--
(1) any tax, charge, or fee levied upon or measured
by the net income, capital stock, net worth, or
property value of the provider of mobile
telecommunications service;
(2) any tax, charge, or fee that is applied to an
equitably apportioned amount that is not determined on
a transactional basis;
(3) any tax, charge, or fee that represents
compensation for a mobile telecommunications service
provider's use of public rights of way or other public
property, provided that such tax, charge, or fee is not
levied by the taxing jurisdiction as a fixed charge for
each customer or measured by gross amounts charged to
customers for mobile telecommunication services;
(4) any generally applicable business and occupation
tax that is imposed by a State, is applied to gross
receipts or gross proceeds, is the legal liability of
the carrier, and statutorily allows the taxpayer to
elect to use the sourcing method required in this Act;
or
(5) any fee related to obligations under section 254
of this Act.''.
(c) Specific Exceptions.--This title--
(1) does not apply to the determination of the taxing
situs of prepaid telephone calling services;
(2) does not affect the taxability of either the
initial sale of mobile telecommunications services or
subsequent resale, whether as sales of the service
alone or as a part of a bundled product, where the
Internet Tax Freedom Act would preclude a
taxingjurisdiction from subjecting the charges of the sale of these
mobile telecommunications services to a tax, charge, or fee but this
section provides no evidence of the intent of Congress with respect to
the applicability of the Internet Tax Freedom Act to such charges; and
(3) does not apply to the determination of the taxing
situs of air-ground radiotelephone service as defined
in section 22.99 of the Commission's regulations (47
C.F.R. 22.99).
SEC. 802. SOURCING RULES.
(a) In General.--Notwithstanding the law of any State or
political subdivision thereof to the contrary, mobile
telecommunications services provided in a taxing jurisdiction
to a customer, the charges for which are billed by or for the
customer's home service provider, shall be deemed to be
provided by the customer's home service provider.
(b) Jurisdiction.--All charges for mobile telecommunications
services that are deemed to be provided by the customer's home
service provider under this title are authorized to be
subjected to tax, charge, or fee by the taxing jurisdictions
whose territorial limits encompass the customer's place of
primary use, regardless of where the mobile telecommunication
services originate, terminate or pass through, and no other
taxing jurisdiction may impose taxes, charges, or fees on
charges for such mobile telecommunications services.
SEC. 803. LIMITATIONS.
This title does not--
(1) provide authority to a taxing jurisdiction to
impose a tax, charge, or fee that the laws of the
jurisdiction do not authorize the jurisdiction to
impose; or
(2) modify, impair, supersede, or authorize the
modification, impairment, or supersession of, the law
of any taxing jurisdiction pertaining to taxation
except as expressly provided in this title.
SEC. 804. ELECTRONIC DATABASES FOR NATIONWIDE STANDARD NUMERIC
JURISDICTIONAL CODES.
(a) Electronic Database.--A State may provide an electronic
database to a home service provider or, if a State does not
provide such an electronic database to home service providers,
then the designated database provider may provide an electronic
database to a home service provider. The electronic database,
whether provided by the State or the designated database
provider, shall be provided in a format approved by the
American National Standards Institute's Accredited Standards
Committee X12, that, allowing for de minimis deviations,
designates for each street address in the State, including to
the extent practicable, any multiple postal street addresses
applicable to one street location, the appropriate taxing
jurisdictions, and the appropriate code for each taxing
jurisdiction, for each level of taxing jurisdiction, identified
by one nationwide standard numeric code. The electronic
database shall also provide the appropriate code for each
street address with respect to political subdivisions which are
not taxing jurisdictions when reasonably needed to determine
the proper taxing jurisdiction. The nationwide standard numeric
codes shall contain the same number of numeric digits with each
digit or combination of digits referring to the same level of
taxing jurisdiction throughout the United States using a format
similar to FIPS 55-3 or other appropriate standard approved by
the Federation of Tax Administrators and the Multistate Tax
Commission, or their successors. Each address shall be provided
in standard postal format.
(b) Notice; Updates.--A State or designated database provider
that provides or maintains an electronic database described in
subsection (a) shall provide notice of the availability of the
then current electronic database, and any subsequent revisions
thereof, by publication in the manner normally employed for the
publication of informational tax, charge, or fee notices to
taxpayers in that State.
(c) User Held Harmless.--A home service provider using the
data contained in the electronic database described in
subsection (a) shall be held harmless from any tax, charge, or
fee liability that otherwise would be due solely as a result of
any error or omission in the electronic database provided by a
State or designated database provider. The home service
provider shall reflect changes made to the electronic database
during a calendar quarter no later than 30 days after the end
of that calendar quarter for each State that issues notice of
the availability of an electronic database reflecting such
changes under subsection (b).
SEC. 805. PROCEDURE WHERE NO ELECTRONIC DATABASE PROVIDED.
(a) In General.--If neither a State nor designated database
provider provides an electronic database under section 804, a
home service provider shall be held harmless from any tax,
charge, or fee liability in that State that otherwise would be
due solely as a result of an assignment of a street address to
an incorrect taxing jurisdiction if, subject to section 806,
the home service provider employs an enhanced zip code to
assign each street address to a specific taxing jurisdiction
for each level of taxing jurisdiction and exercises due
diligence at each level of taxing jurisdiction to ensure that
each such street address is assigned to the correct taxing
jurisdiction. Where an enhanced zip code overlaps boundaries of
taxing jurisdictions of the same level, the home service
provider must designate one specific jurisdiction within such
enhanced zip code for use in taxing the activity for that
enhanced zip code for each level of taxing jurisdiction. Any
enhanced zip code assignment changed in accordance with section
806 is deemed to be in compliance with this section. For
purposes of this section, there is a rebuttable presumption
that a home service provider has exercised due diligence if
such home service provider demonstrates that it has--
(1) expended reasonable resources to implement and
maintain an appropriately detailed electronic database
of street address assignments to taxing jurisdictions;
(2) implemented and maintained reasonable internal
controls to promptly correct misassignments of street
addresses to taxing jurisdictions; and
(3) used all reasonably obtainable and usable data
pertaining to municipal annexations, incorporations,
reorganizations and any other changes in jurisdictional
boundaries that materially affect the accuracy of the
electronic database.
(b) Termination of Safe Harbor.--Subsection (a) applies to a
home service provider that is in compliance with the
requirementsof subsection (a), with respect to a State for
which an electronic database is not provided under section 804 until
the later of--
(1) 18 months after the nationwide standard numeric
code described in section 804(a) has been approved by
the Federation of Tax Administrators and the Multistate
Tax Commission; or
(2) 6 months after that State or a designated
database provider in that State provides the electronic
database as prescribed in section 804(a).
SEC. 806. CORRECTION OF ERRONEOUS DATA FOR PLACE OF PRIMARY USE.
(a) In General.--A taxing jurisdiction, or a State on behalf
of any taxing jurisdiction or taxing jurisdictions within such
State, may--
(1) determine that the address used for purposes of
determining the taxing jurisdictions to which taxes,
charges, or fees for mobile telecommunications services
are remitted does not meet the definition of place of
primary use in section 809(3) and give binding notice
to the home service provider to change the place of
primary use on a prospective basis from the date of
notice of determination if--
(A) where the taxing jurisdiction making such
determination is not a State, such taxing
jurisdiction obtains the consent of all
affected taxing jurisdictions within the State
before giving such notice of determination; and
(B) the customer is given an opportunity,
prior to such notice of determination, to
demonstrate in accordance with applicable State
or local tax, charge, or fee administrative
procedures that the address is the customer's
place of primary use;
(2) determine that the assignment of a taxing
jurisdiction by a home service provider under section
805 does not reflect the correct taxing jurisdiction
and give binding notice to the home service providerto
change the assignment on a prospective basis from the date of notice of
determination if--
(A) where the taxing jurisdiction making such
determination is not a State, such taxing
jurisdiction obtains the consent of all
affected taxing jurisdictions within the State
before giving such notice of determination; and
(B) the home service provider is given an
opportunity to demonstrate in accordance with
applicable State or local tax, charge, or fee
administrative procedures that the assignment
reflects the correct taxing jurisdiction.
SEC. 807. DUTY OF HOME SERVICE PROVIDER REGARDING PLACE OF PRIMARY USE.
(a) Place of Primary Use.--A home service provider is
responsible for obtaining and maintaining the customer's place
of primary use (as defined in section 809). Subject to section
806, and if the home service provider's reliance on information
provided by its customer is in good faith, a home service
provider--
(1) may rely on the applicable residential or
business street address supplied by the home service
provider's customer; and
(2) is not liable for any additional taxes, charges,
or fees based on a different determination of the place
of primary use for taxes, charges or fees that are
customarily passed on to the customer as a separate
itemized charge.
(b) Address Under Existing Agreements.--Except as provided in
section 806, a home service provider may treat the address used
by the home service provider for tax purposes for any customer
under a service contract or agreement in effect 2 years after
the date of enactment of the Wireless Telecommunications
Sourcing and Privacy Act as that customer's place of primary
use for the remaining term of such service contract or
agreement, excluding any extension or renewal of such service
contract or agreement, for purposes of determining the taxing
jurisdictions to which taxes, charges, or fees on charges for
mobile telecommunications services are remitted.
SEC. 808. SCOPE; SPECIAL RULES.
(a) Title Does Not Supersede Customer's Liability to Taxing
Jurisdiction.--Nothing in this title modifies, impairs,
supersedes, or authorizes the modification, impairment, or
supersession of, any law allowing a taxing jurisdiction to
collect a tax, charge, or fee from a customer that has failed
to provide its place of primary use.
(b) Additional Taxable Charges.--If a taxing jurisdiction
does not otherwise subject charges for mobile
telecommunications services to taxation and if these charges
are aggregated with and not separately stated from charges that
are subject to taxation, then the charges for otherwise non-
taxable mobile telecommunications services may be subject to
taxation unless the home service provider can reasonably
identify charges not subject to such tax, charge, or fee from
its books and records that are kept in the regular course of
business.
(c) Non-Taxable Charges.--If a taxing jurisdiction does not
subject charges for mobile telecommunications services to
taxation, a customer may not rely upon the nontaxability of
charges for mobile telecommunications services unless the
customer's home service provider separately states the charges
for non-taxable mobile telecommunications services from taxable
charges or the home service provider elects, after receiving a
written request from the customer in the form required by the
provider, to provide verifiable data based upon the home
service provider's books and records that are kept in the
regular course of business that reasonably identifies the
nontaxable charges.
(d) References to Regulations.--Any reference in this title
to the Commission's regulations is a reference to those
regulations as they were in effect on June 1, 1999.
SEC. 809. DEFINITIONS.
In this title:
(1) Charges for mobile telecommunications services.--
The term ``charges for mobile telecommunications
services'' means any charge for, or associated with,
the provision of commercial mobile radio service, as
defined in section 20.3 of the Commission's regulations
(47 C.F.R. 20.3), or any charge for, or associated
with, a service provided as an adjunct to a commercial
mobile radio service, that is billed to the customer by
or for the customer's home service provider regardless
ofwhether individual transmissions originate or
terminate within the licensed service area of the home service
provider.
(2) Taxing jurisdiction.--The term ``taxing
jurisdiction'' means any of the several States, the
District of Columbia, or any territory or possession of
the United States, any municipality, city, county,
township, parish, transportation district, or
assessment jurisdiction, or any other political
subdivision within the territorial limits of the United
States with the authority to impose a tax, charge, or
fee.
(3) Place of primary use.--The term ``place of
primary use'' means the street address representative
of where the customer's use of the mobile
telecommunications service primarily occurs, which must
be--
(A) either the residential street address or
the primary business street address of the
customer; and
(B) within the licensed service area of the
home service provider.
(4) Licensed service area.--The term ``licensed
service area'' means the geographic area in which the
home service provider is authorized by law or contract
to provide commercial mobile radio service to the
customer.
(5) Home service provider.--The term ``home service
provider'' means the facilities-based carrier or
reseller with which the customer contracts for the
provision of mobile telecommunications services.
(6) Customer.--
(A) In general.--The term ``customer''
means--
(i) the person or entity that
contracts with the home service
provider for mobile telecommunications
services; or
(ii) where the end user of mobile
telecommunications services is not
thecontracting party, the end user of the mobile telecommunications
service, but this clause applies only for the purpose of determining
the place of primary use.
(B) The term ``customer'' does not include--
(i) a reseller of mobile
telecommunications service; or
(ii) a serving carrier under an
arrangement to serve the customer
outside the home service provider's
licensed service area.
(7) Designated database provider.--The term
designated database provider'' means a corporation,
association, or other entity representing all the
political subdivisions of a State that is--
(A) responsible for providing the electronic
database prescribed in section 804(a) if the
State has not provided such electronic
database; and
(B) sanctioned by municipal and county
associations or leagues of the State whose
responsibility it would otherwise be to provide
the electronic database prescribed by this
title.
(8) Prepaid telephone calling services.--The term
``prepaid telephone calling service'' means the right
to purchase exclusively telecommunications services
that must be paid for in advance, that enables the
origination of calls using an access number,
authorization code, or both, whether manually or
electronically dialed, if the remaining amount of units
of service that have been prepaid is known by the
provider of the prepaid service on a continuous basis.
(9) Reseller.--The term ``reseller''--
(A) means a provider who purchases
telecommunications services from another
telecommunications service provider and then
resells, uses as a component part of, or
integrates the purchased services into a mobile
telecommunications service; but
(B) does not include a serving carrier with
which a home service provider arranges for the
services to its customers outside the home
service provider's licensed service area.
(10) Serving carrier.--The term ``serving carrier''
means a facilities-based carrier providing mobile
telecommunications service to a customer outside a home
service provider's or reseller's licensed service area.
(11) Mobile telecommunications service.--The term
``mobile telecommunications service'' means commercial
mobile radio service, as defined in section 20.3 of the
Commission's regulations (47 C.F.R. 20.3).
(12) Enhanced zip code.--The term ``enhanced zip
code'' means a United States postal zip code of 9 or
more digits.
SEC. 810. COMMISSION NOT TO HAVE JURISDICTION OF TITLE.
Notwithstanding any other provision of this Act, the
Commission shall have no jurisdiction over the interpretation,
implementation, or enforcement of this title.
SEC. 811. NONSEVERABILITY.
If a court of competent jurisdiction enters a final judgment
on the merits that is no longer subject to appeal, which
substantially limits or impairs the essential elements of this
title based on Federal statutory or Federal Constitutional
grounds, or which determines that this title violates the
United States Constitution, then the provisions of this title
are null and void and of no effect.
SEC. 812. NO INFERENCE.
(a) Internet Tax Freedom Act.--Nothing in this title may be
construed as bearing on Congressional intent in enacting the
Internet Tax Freedom Act or as affecting that Act in any way.
(b) Telecommunications Act of 1996.--Nothing in this title
shall limit or otherwise affect the implementation of the
Telecommunications Act of 1996 or the amendments made by that
Act.