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Commerce and Communications Committee Update July 31, 2000 Volume 6, Number 4
NCSL Supports
E-Sign Conference Report
NCSL SUPPORTS DIGITAL SIGNATURES BILL SIGNED BY PRESIDENT CLINTON On June 30, 2000, President Clinton signed S. 761 giving electronic signatures the same legal status as written signatures. NCSL had been closely involved with the House and Senate negotiations as they moved through the conference committee process. Over the last 8 months, NCSL passed two resolutions outlining principles that should be reflected in any federal digital signature law. First NCSL wanted to make sure that states maintained the ability to set basic standards on how regulated industries remitted records to the state. Additionally, NCSL sought to protect states consumer protection laws, and states' ability to reassert jurisdiction by passing the Uniform Electronic Transactions Act (UETA). The final language of the conference report addressed each of these concerns, and NCSL was pleased to support its passage. Ranking Member of the House Commerce Committee, Rep. John Dingell (D-MI) wrote a letter to NCSL Commerce and Communications Chair, Senator Joanne Emmons of Michigan, saying, "This achievement was possible, in no small part, due to the very constructive involvement of NCSL." An analysis of the federal law in relation to UETA is available at http://www.nccusl.org/. THREE NEW COMMITTEE POLICIES ADOPTED AT NCSL ANNUAL MEETING The Commerce and Communications Committee met July 15th and 16th at the Annual Meeting in Chicago, holding sessions on such topics as H1-B Visas, Consumers and Financial Modernization, and the State of Insurance Regulation in 2000. The Committee also heard discussion and debate on how nexus should be defined in the changing economy, and the role of government in ensuring competition as telecommunications service providers merge and technologies converge. After the sessions the Committee passed two policies and one action resolution. First the Committee updated its sunsetting policy on telecommunications to reflect the new challenges of a changing market, titling it "Telecommunications in the 21st Century". The Committee also adopted a new policy, "Nexus in the New Economy", recognizing the state sales tax system is complicated, but asserting that states should be given mandatory collection authority for remote sales once the states have simplified and streamlined their disparate sales and use tax structures. Finally, the Committee adopted a resolution calling on Congress to refrain from taking any steps to federalize regulation of the business of insurance. All three were unanimously approved by at the Annual NCSL Business Meeting. STATES MOVING FORWARD WITH STREAMLINED SALES TAX SYSTEM In January of this year the NCSL Executive Committee endorsed model legislation drafted by the NCSL Task Force on State and Local Taxation of Telecommunications and Electronic Commerce to direct state revenue departments to enter into multi-state discussions to create a streamlined sales tax system. As of July 31, 2000, 23 states had joined the Streamlined Sales Tax Project through legislative action or by executive order. Representatives from participating states have been meeting since March to develop a more simple and uniform sales tax system that would dramatically reduce the compliance burden on all sellers. The Project will have recommendations ready for public comment in late September, which will be incorporated into model legislation for legislatures to consider in the 2001 session. The NCSL Task Force will provide legislative oversight for the project. TASK FORCE ON TELECOM AND E-COMMERCE PASSES NEW RESOLUTIONS The Task Force passed several resolutions at their last meeting July 14-15 in Chicago. The first resolution reiterated support for the Streamlined Project and called on Congress not to act this year on the sales tax issue, as premature action could impair state efforts to simplify. The second resolution called on Congress not to extend the current moratorium on state taxes on Internet access, as the current moratorium does not expire for another 15 months and the definition of Internet access is constantly evolving with converging technologies. The final resolution endorsed six principles to frame future discussions of telecommunications tax reform. Task Force and Committee resolutions will soon be available at http://www.ncsl.org/, or call Graham Williams at 202.624.8683. CONGRESS URGED NOT TO TAKE ACTION ON INTERNET TAXATION. As Congress prepared to adjourn for its summer recess, NCSL sent a letter to all members of the United States Senate urging that they not take any action this year on extending the moratorium on state and local taxes on Internet access. The letter, signed by Representative Matthew Kisber of Tennessee and Senators Steven Rauschenberger of Illinois and Joanne Emmons of Michigan pointed out that the current moratorium does not expire until October 21, 2001. Furthermore, the letter warned Congress not to act too quickly as "hasty or premature action will actually delay efforts by state and local governments to streamline and simplify their sales and use tax collection systems." (See item below.) The Senate recessed without taking any further action on Internet taxation, however, there is much concern that some in Congress will try to roll the Internet tax moratorium extension into an "ominous spending bill" just before Congress adjourns for the Fall elections. During the congressional recess, state legislators are asked to request their members of Congress to refrain from rushing to extend the moratorium or deal with the question of collecting sales and use taxes for electronic commerce transactions. The letter is available at www.ncsl.org/statefed/sen725.htm
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