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[Page: S1987] GPO's PDF---
By Mrs. FEINSTEIN (for herself, Mr. KYL, and Mr. GRASSLEY):
S. 2328. A bill to prevent identity fraud in consumer credit transactions and credit reports, and for other purposes; to the Committee on Banking, Housing and Urban Affairs.
IDENTITY THEFT PREVENTION ACT OF 2000
Mrs. FEINSTEIN. Mr. President, I rise to send to the desk a bill cosponsored by Senator KYL of Arizona and Senator GRASSLEY of Iowa for reference to committee.
The bill is entitled the ``Identity Theft Prevention Act of 2000.''
The crime of identity theft has become one of the major law enforcement challenges of the new economy because vast quantities of sensitive personal information are now vulnerable to criminal interception and misuse.
What is identity theft? Identity theft occurs when one person uses another person's Social Security number, birth date, driver's license number, or other identifying information to obtain credit cards, car loans, phone plans, or other services in the potential victim's name. Of course, the victim does not know the theft has happened until he or she receives bills for items he or she didn't buy; plans for which he or she didn't contract, and so on.
Identity thieves get personal information in a myriad of ways. They steal wallets and purses containing identification cards. They use personal information found on the Internet. They steal mail, including preapproved credit offers and credit statements. They fraudulently obtain credit reports or they get someone else's personnel records at work.
All indications are that there is an alarming growth of this highly invasive crime. I believe the time has come to do something about it. A national credit bureau has reported that the total number of identity theft inquiries to its Theft Victim Assistance Department grew from 35,000 theft inquiries in 1992 to over one-half million in 1997. That is over a 1,400-percent increase. It is national. It touches every State and it impacts every area of our citizenry.
The United States Postal Inspection Service reports that 50,000 people a year have become victims of identity theft since it first began collecting information on identity theft in the mid-1990s.
In total, the Treasury Department estimates that identity theft annually causes between $2 and $3 billion in losses from credit cards alone.
The legislation I introduce today, along with Senators KYL and GRASSLEY, tackles this issue. It makes it harder for criminals to access another person's private information, it gives consumers more tools to uncover fraudulent activity conducted in their name, and it expands the authority of the Social Security Administration to prosecute identity theft.
The Identity Theft Prevention Act makes it harder for criminals to steal personal information. First, it closes a loophole in the Fair Credit Reporting Act that permits personal identifying information such as Social Security numbers, one's mother's maiden name, and birth date to be distributed without restriction to marketers. This sensitive information would be treated under this bill like any other part of the credit report, with its disclosure restricted to businesses needing the data for extensions of credit, employment applications, insurance applications, or other permissible purposes.
This bill codifies, also, the practice of placing fraud alerts on a consumer's credit file and gives the Federal Trade Commission the authority to impose fines against credit issuers that ignore the alert. Too many credit issuers are presently ignoring fraud alerts to the detriment of identity theft victims.
Additionally, the bill requires credit bureaus to investigate discrepancies between their records and the address, birth date, and other personal information submitted as a part of an individual's application for credit, so that telltale signs of fraudulent applications such as incorrect addresses are immediately flagged.
The bill improves how credit card companies monitor requests for new credit cards or changes of address. For example, it requires that credit card holders always be notified at their original address when a duplicate card is sent to a new address.
This legislation also gives consumers more access to the personal information collected about them, which is a critical tool in combating identity theft. Currently, six States--Colorado, Georgia, Massachusetts, Maryland, Vermont, and New Jersey--have statutes that entitle consumers to one free personal credit report annually. This act makes this a national requirement. Every consumer across this Nation would have access to a free credit report. In addition, consumers could review the personal information collected about them by individual reference services for a reasonable fee. With greater access to their own personal information, consumers can proactively check their records for evidence of identity theft and uncover other errors.
We have worked with the staff of the Federal Trade Commission in preparing this legislation. I believe the staff of the FTC is supportive of this bill. This bill is also supported by the Consumer Federation of America.
We try to empower victims in this bill. This legislation calls for measures to help identity theft victims recover from the crime. In cases of identity theft, all too often victims get treated as if they were the criminals. Victims receive hostile notices from creditors who mistakenly believe they have not paid their bills. Victims' access to credit is jeopardized, and they can spend years trying to restore their good name.
This legislation calls upon the credit industry to assist victims in notifying credit issuers of fraudulent charges by developing a single model credit reporting form. However, should the credit industry fail to implement these measures, the Federal Trade Commission would then be authorized to take action.
Maureen Mitchell, an identity theft victim, recently described why this assistance is needed at a hearing before the Judiciary Committee Subcommittee on Terrorism, Technology, and Government Information, a subcommittee on which I am ranking member. She
said:
I have logged over 400 hours of time trying to clear my name and restore my good credit. Words are unable to adequately express the gamut of emotions that I feel as a victim.
Another victim wrote to me:
I have spent an ungodly number of hours trying to correct the damage that has been done by the individual who stole my identity. Professionally, as a teacher and a tutor, my hours are worth $35. I have been robbed of $5,250 in time. I have been humiliated in my local stores because checks have been rejected at the checkout. I am emotionally drained. I am a victim and Congress needs to recognize me as such.
We try in this bill to do that.
This legislation targets the theft and misuse of another person's Social Security number, a major cause of identity theft. While the Social Security Administration has the ability to impose civil penalties for misusing a Social Security number to falsely obtain government benefits, it has no authority over other offenses involving the misuse of Social Security numbers. This bill gives them that authority. The
[Page: S1988] GPO's PDF
(1) knowingly uses another's Social Security number on the basis of false information provided by them or another person;
(2) falsely represents a number to be a Social Security number when it is not;
That means, makes up a number, which people do.
(3) alters a Social Security card; or
(4) compels the disclosure of a Social Security card in violation of the law.
I think these provisions enable the Social Security Administration to throw its full weight into the investigation and civil prosecution of identity theft involving Social Security numbers.
In conclusion, I hope my colleagues find this bill worthy and pass it. This bill implements a number of practical, concrete measures to close down the flow of private information to individuals with criminal intent. In this new technology-driven economy, consumers don't need to be left vulnerable. They shouldn't be left without recourse to predators who are out to steal their good name.
I think we have a very practical solution. It is well thought out. It is well drafted. It has been worked out with the staff of the FTC. My hope is, when it goes to the Banking Committee, that committee would take a good look at it and pass it. This is an increasing problem. There is no reason to believe it will stop. Without Congress providing basic protections to individuals who are the victims, it will continue to grow.
By Mrs. LINCOLN (for herself and Mr. HUTCHINSON):
S. 2329. A bill to improve the administration of the Animal and Plant Health Inspection Service of the Department of Agriculture, and for other purposes; to the Committee on Agriculture, Nutrition, and Forestry.
LEGISLATION TO IMPROVE THE ANIMAL AND PLANT HEALTH INSPECTION SERVICE
Mrs. LINCOLN. Mr. President, the Wildlife Services Division of the United States Department of Agriculture needs assistance in expediting proper bird management activities. I am here today to introduce legislation that accomplishes this goal.
Proper migratory bird management is important to the state of Arkansas for a number of reasons. We are deemed ``The Natural State'' due to the numerous outdoor recreational opportunities that exist in the state. Fishing, hunting, and bird watching opportunities abound throughout Arkansas. Maintaining proper populations of wildlife, especially migratory birds, is essential for sustaining a balanced environment.
In Arkansas, aquaculture production has taken great strides in recent years. The catfish industry in the state has grown rapidly and Arkansas currently ranks second nationally in acreage and production of catfish. The baitfish industry is not far behind, selling more than 15 million pounds of fish annually, with a cash value in excess of $43 million. I have been a great supporter of this industry since my days in the House of Representatives and I am concerned about the impact the double breasted cormorant is having on this industry. In the words of one of my constituents, ``The double-crested cormorant has become a natural disaster!'' I am pleased that the Fish and Wildlife Service has agreed to develop a national management plan for the double breasted cormorant. I am hopeful that an effective management program will be the result of these efforts.
One of my first priorities since coming to Congress in 1992 has been to work to make government more efficient and effective. To specifically address what I see as an inequity among government agencies regarding this issue, I am introducing a bill today that gives Wildlife Service employees as much authority to manage and take migratory birds as any U.S. Fish and Wildlife Service employee. After all, Wildlife Services biologists are professional wildlife managers providing the front line of defense against such problems. With this legislation I would like to recognize the excellent job that Wildlife Services has done and is doing for bird management.
Currently, USDA-Wildlife Services is required to apply for and receive a permit from the U.S. Fish and Wildlife Service before they can proceed with any bird collection or management activities. This process is redundant and unnecessary. Oftentimes, Wildlife Services finds that by the time a permit arrives, the birds for which the permit was applied for are already gone. I hope that this legislation will lead to a more streamlined effort for management purposes and I urge both agencies, USDA and the Fish and Wildlife Service, to work together to accomplish this goal.
I would like to thank my colleague from Arkansas, Senator TIM HUTCHINSON, for joining me in this effort and look forward to working with my colleagues to ensure that government is operating efficiently.
By Mr. ROTH (for himself, Mr. MURKOWSKI, Mr. ROBB, Mr. NICKLES, and Mr. MACK):
S. 2330. A bill to amend the Internal Revenue Code of 1986 to repeal the excise tax on telephone and other communication service; to the Committee on Finance.
LEGISLATION TO REPEAL THE TELEPHONE EXCISE TAX
Mr. ROTH. Mr. President, I rise today--along with Senator BREAUX and others--to introduce a bill to repeal the telephone excise tax . It is a tax that is outdated, unfair, and complex for both consumers to understand and for the collectors to administer. It cannot be justified on any tax policy grounds.
The federal government has had the American consumer on ``hold'' for too long when it comes to this tax . The telephone excise tax has been around for over 102 years. In fact, it was first imposed in 1898--just 22 years after the telephone itself was invented. So quickly was it imposed that it almost seems that Uncle Sam was there to collect it before Alexander Graham Bell could put down the receiver from the first call. In fact, the tax is so old that Bell himself would have paid it!
This tax on talking--as it is known--currently stands at 3%. Today, about 94% of all American families have telephone s ervice. That means that virtually every family in the United States must tack an additional 3% on to their monthly phone bill. The federal tax ap plies to local phone service; it applies to long distance service; and it even applies in some cases to the extra amounts paid for state and local taxes. It is estimated that this tax co sts the American public more than $5 billion per year.
The telephone ex cise tax is a classic story of a tax th at has been severed from its original justifications, but lives on solely to collect money.
In truth, the federal phone tax ha s had more legislative lives than a cat. When the tax wa s originally imposed, Teddy Roosevelt was leading the Rough Riders up San Juan Hill. At that time, it was billed as a luxury tax, a s only a small portion of the American public even had telephones. The tax wa s repealed in the early 20th century but then was reinstated at the beginning of World War I. It was repealed and reinstated a few more times until 1941, when it was made permanent to raise money for World War II. In the mid-60s, Congress scheduled the elimination of the phone tax, w hich had reached levels of 10 and 25 percent. But once again, the demands of war intervened, as the elimination of the tax wa s delayed to help pay for Vietnam. In 1973, the phone tax be gan to phase-out, but one year before it was about to be eliminated, it rose up yet again--this time justified by the rationale of deficit reduction--and has remained with us ever since.
This tax is a pure money grab by the federal government--it does not pass any of the traditional criteria used for evaluating tax po licy. First, this phone tax is outmoded. Once upon a time, it could have been argued that telephone se rvice was a luxury item and that only the rich would be affected. As we all know, there is nothing further from the truth today.
Second, the federal phone tax is unfair. Because this tax is a flat 3%, it applies disproportionately to low and middle income people. For example, studies show that an American family making less than $50,000 per year spends at least 2% of its income on telephone serv ice. A family earning less than $10,000 per year spends over 9% of its income on telephone servi ce. Imposing a tax on th ose families for a
[Page: S1989] GPO's PDF
a necessity in a modern society is simply not fair.
Third, the federal phone tax is co mplex. Once upon a time, phone service was simple--there was one company who provided it. It was an easy tax to ad minister. Now, however, phone service is intertwined with data services and Internet access, and it brings about a whole new set of complexities. For instance, a common way to provide high speed Internet access is through a digital subscriber line. This DSL line allows a user to have simultaneous access to the Internet and to telephone commu nications. How should it be taxed? Should the tax be ap portioned? Should the whole line be tax free? And what will we do when cable, wireless, and satellite companies provide voice and data communications over the same system? The burdensome complexity of today will only become more difficult tomorrow.
As these questions are answered, we run the risk of distorting the market by favoring certain technologies. There are already numerous exceptions and carve-outs to the phone tax. For instance, private communications services are exempt from the tax. That allows large, sophisticated companies to establish communications networks and avoid paying any federal phone tax. It g oes without saying that American families do not have that same option.
With new technology, we also may exacerbate the inequities of the tax and c ontribute to the digital divide. For example, consider two families that decide it's time to connect their homes to the Internet. The first family installs another phone line for regular Internet access. The second family decides to buy a more expensive, dedicated high speed line for Internet access. The first family definitely gets hit with the phone tax, whil e the second family may end up paying no tax at al l on their connection. I can't see any policy rationale for that result.
Speaking of complexity, let me ask if anyone has taken a look at their most recent phone bill. It is a labyrinth of taxes and fees piled one on top of another. We may not be able to figure out what all the fees are for; but we do know that they add a big chunk to our phone bill. According to a recent study, the mean tax rate across the country on telecommunications is slightly over 18%. That is about a 6% rise in the last 10 years. In my little state of Delaware, the average tax rate on telecommunications now stands at 12%. I can't control the state and local taxes that have been imposed, but I can do my part with respect to the federal taxes. I seek to remove this burden from the citizens of my state--and all Americans across the country.
The technological changes in America have increased productivity and revolutionized our economy. As members of Congress, we need to make sure that our tax policies do not stifle that economic expansion. We should not adhere to policies that are a relic from a different time. In 1987, even before the deregulation of the telecommunications market, the Treasury Department concluded that there were ``no strong arguments in favor of the communications excise tax.''
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