[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.

                                
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