chapter, except that such State may not impute penalties
or interest on any tax accrued during the period beginning
on the date of the enactment of this Act and ending on
the date such State satisfies such requirement.
‘‘(c) APPLICATION OF MORATORIUM.—Subsection (a)
shall not apply with respect to the provision of Internet
access that is offered for sale as part of a package of serv-
ices that includes services other than Internet access, un-
less the service provider separately states that portion of
the billing that applies to such services on the user’s bill.
‘‘§ 152. Advisory Commission on Electronic Com-
merce
‘‘(a) ESTABLISHMENT OF COMMISSION.—There is es-
tablished a temporary commission to be known as the Ad-
visory Commission on Electronic Commerce (in this chap-
ter referred to as the ‘Commission’). The Commission
shall—
‘‘(1) be composed of 31 members appointed in
accordance with subsection (b), including the chair-
person who shall be selected by the members of the
Commission from among individuals specified in
subsection (b); and
‘‘(2) conduct its business in accordance with the
provisions of this chapter.
‘‘(b) MEMBERSHIP.—
‘‘(1) IN
GENERAL.—The Commissioners shall
serve for the life of the Commission. The member-
ship of the Commission shall be as follows:
‘‘(A) Three representatives from the Fed-
eral Government comprised of the Attorney
General, the Secretary of Commerce, and the
Secretary of the Treasury, or their respective
representatives.
‘‘(B) Fourteen representatives from State,
local, and county governments comprised of 2
representatives each from the National Gov-
ernors’ Association, the National Conference of
State Legislatures, the Council of State Govern-
ments, the National Association of Counties,
the National League of Cities, and the United
States Conferences of Mayors; and 1 represent-
ative each from the International City/County
Management Association and the American
Legislative Exchange Council.
‘‘(C) Fourteen representatives of taxpayers
and business—
‘‘(i) 7 of whom shall be appointed
jointly by the Speaker of the House of
Representatives and the majority leader of
the Senate, of whom 3 shall be individuals
employed by or affiliated with persons en-
gaged in providing Internet access or com-
munications or transactions that use the
Internet, 3 shall be individuals employed
by or affiliated with persons engaged in
electronic commerce (including at least 1
who is employed by or affiliated with a
person also engaged in mail order com-
merce), and 1 shall be an individual em-
ployed by or affiliated with a person en-
gaged in software publishing; and
‘‘(ii) 7 of whom shall be appointed
jointly by the minority leader of the House
of Representatives and the minority leader
of the Senate, of whom 3 shall be individ-
uals employed by or affiliated with persons
engaged in providing Internet access or
communications or transactions that use
the Internet, 3 shall be individuals em-
ployed by or affiliated with persons en-
gaged in electronic commerce (including at
least 1 who is employed by or affiliated
with a person also engaged in mail order
commerce), and 1 shall be an individual
employed by or affiliated with a person en-
gaged in software publishing.
‘‘(2) APPOINTMENTS.—Appointments to the
Commission shall be made not later than 45 days
after the date of enactment of this chapter. The
chairperson shall be selected not later than 60 days
after the date of the enactment of this chapter.
‘‘(c) ACCEPTANCE
OF GIFTS
AND GRANTS.—The
Commission may accept, use, and dispose of gifts or
grants of services or property, both real and personal, for
purposes of aiding or facilitating the work of the Commis-
sion. Gifts or grants not used at the expiration of the
Commission shall be returned to the donor or grantor.
‘‘(d) OTHER RESOURCES.—The Commission shall
have reasonable access to materials, resources, data, and
other information from the Department of Justice, the
Department of Commerce, and the Department of the
Treasury. The Commission shall also have reasonable ac-
cess to use the facilities of the Department of Justice, the
Department of Commerce, and the Department of the
Treasury for purposes of conducting meetings.
‘‘(e) SUNSET.—The existence of the Commission
shall terminate—
‘‘(1) when the last of the committees of juris-
diction referred to in section 154 concludes consider-
ation of the legislation proposed under section 153;
or
‘‘(2) 3 years after the date of the enactment of
this chapter;
whichever occurs first.
‘‘(f) RULES OF THE COMMISSION.—
‘‘(1) Sixteen members of the Commission shall
constitute a quorum for conducting the business of
the Commission.
‘‘(2) Any meetings held by the Commission
shall be duly noticed at least 14 days in advance and
shall be open to the public.
‘‘(3) The Commission may adopt other rules as
needed.
‘‘(g) DUTIES OF THE COMMISSION.—The duties of
the Commission, to be carried out in consultation with the
National Tax Association Communications and Electronic
Commerce Tax Project, and other interested persons, may
include—
‘‘(1) conducting a thorough study of State and
local taxation of transactions using the Internet and
Internet access;
‘‘(2) examining the collection and administra-
tion of consumption taxes on remote commerce in
other countries and the United States, and the im-
pact of such collection on the global economy;
‘‘(3) examining the advantages and disadvan-
tages of authorizing States and local governments to
require remote sellers to collect and remit sales and
use taxes;
‘‘(4) proposing a uniform system of definitions
of remote and electronic commerce that may be sub-
ject to sales and use tax within each State;
‘‘(5) examining model State legislation relating
to taxation of transactions using the Internet and
Internet access, including uniform terminology, defi-
nitions of the transactions, services, and other activi-
ties that may be subject to State and local taxation,
procedural structures and mechanisms applicable to
such taxation, and a mechanism for the resolution of
disputes between States regarding matters involving
multiple taxation;
‘‘(6) examining a simplified system for adminis-
tration and collection of sales and use tax for remote
commerce, that incorporates all manner of making
consumer payments, that would provide for a single
statewide sales or use tax rate (which rate may be
zero), and would establish a method of distributing
to political subdivisions within each State their pro-
‘‘(A) the definition of a level of contacts
below which a State may not impose collection
obligations on a remote seller;
‘‘(B) whether or not such obligations are
applied in a nondiscriminatory manner with re-
spect to nonremote transactions; and
‘‘(C) the impact of such obligation on
small business remote sellers;
‘‘(11) examining making permanent the tem-
porary moratorium described in section 151 with re-
spect to Internet access as well as such other taxes
that the Commission deems appropriate;
‘‘(12) examining ways to simplify State and
local taxes imposed on the provision of telecommuni-
cations services;
‘‘(13) requiring the Commission to hold a pub-
lic hearing to provide an opportunity for representa-
tives of the general public, taxpayer groups, con-
sumer groups, State and local government officials,
and tax-supported institutions to testify; and
‘‘(14) examining other State and local tax
issues that are relevant to the duties of the Commis-
sion.
‘‘(h) FEDERAL ADVISORY COMMITTEE ACT.—The
Federal Advisory Committee Act shall not apply with re-
spect to the Commission.
‘‘§ 153. Legislative recommendations
‘‘(a) TRANSMISSION OF PROPOSED LEGISLATION.—
Not later than 2 years after the date of the enactment
of this chapter, the Commission shall transmit to the
President and the Congress proposed legislation reflecting
any findings concerning the matters described in such sec-
tion.
‘‘(b) CONTENTS OF PROPOSED LEGISLATION.—The
proposed legislation submitted under subsection (a) by the
Commission shall have been agreed to by at least 19 mem-
bers of the Commission and may—
‘‘(1) define with particularity the level of con-
tacts between a State and remote seller that the
Commission considers sufficient to permit a State to
impose collection obligations on the remote seller
and the level of contacts which is not sufficient to
impose collection obligations on remote sellers;
‘‘(2) provide that if, and only if, a State has
adopted a single sales and use tax rate for remote
commerce and established a method of distributing
to its political subdivisions their proportionate share
of such taxes, and adopted simplified procedures for
the administration of its sales and use taxes, includ-
ing uniform registration, tax returns, remittance re-
quirements, and filing procedures, then such State
should be authorized to impose on remote sellers a
duty to collect sales or use tax on remote commerce;
‘‘(3) provide that, effective upon the expiration
of a 4-year period beginning on the date of the en-
actment of such legislation, a State that does not
have in effect a single sales and use tax rate and
simplified administrative procedures shall be deemed
to have in effect a sales and use tax rate on remote
commerce equal to zero, until such time as such
State does adopt a single sales and use tax rate and
simplified administrative procedures;
‘‘(4) include uniform definitions of categories of
property, goods, services, or information subject to,
or exempt from, sales and use taxes;
‘‘(5) make permanent the temporary morato-
rium described in section 151 with respect to Inter-
net access, as well as such other taxes (including
those described in section 151) that the Commission
deems appropriate;
‘‘(6) provide a mechanism for the resolution of
disputes between States regarding matters involving
multiple taxation; and
‘‘(7) include other provisions that the Commis-
sion deems necessary.
‘‘(c) RECOMMENDATIONS OF THE PRESIDENT.—Not
later than 45 days after the receipt of the Commission’s
legislative proposals, the President shall review such pro-
posals and submit to the Congress such policy rec-
ommendations as the President deems necessary or expe-
dient.
‘‘§ 154. Expedited consideration of legislative rec-
ommendations
‘‘(a) Not later than 90 legislative days after the
transmission to the Congress by the Commission of the
proposed legislation described in section 153, such legisla-
tion shall be considered by the respective committees of
jurisdiction within the House of Representatives and the
Senate, and, if reported, shall be referred to the proper
calendar on the floor of each House for final action.
‘‘(b) For purposes of this section, the 90-day period
shall be computed by excluding—
‘‘(1) the days on which either House is not in
session because of an adjournment of more than 3
days to a day certain or an adjournment of the Con-
gress sine die; and
‘‘(2) any Saturday and Sunday, not excluded
under paragraph (1), when either House is not in
session.
‘‘§ 155. Definitions
‘‘For the purposes of this chapter:
‘‘(1) BIT TAX.—The term ‘bit tax’ means any
tax on electronic commerce expressly imposed on or
measured by the volume of digital information trans-
mitted electronically, or the volume of digital infor-
mation per unit of time transmitted electronically,
but does not include taxes imposed on the provision
of telecommunications services.
‘‘(2) COMPUTER SERVER.—The term ‘computer
server’ means a computer that functions as a cen-
tralized provider of information and services to mul-
tiple recipients.
‘‘(3) DISCRIMINATORY
TAX.—The term ‘dis-
criminatory tax’ means—
‘‘(A) any tax imposed by a State or politi-
cal subdivision thereof on electronic commerce
that—
‘‘(i) is not generally imposed and le-
gally collectible by such State or such polit-
ical subdivision on transactions involving
similar property, goods, services, or infor-
mation accomplished through other means;
‘‘(ii) is not generally imposed and le-
gally collectible at the same rate by such
State or such political subdivision on
transactions involving similar property,
goods, services, or information accom-
plished through other means, unless the
rate is lower as part of a phase-out of the
tax over not more than a 5-year period;
‘‘(iii) imposes an obligation to collect
or pay the tax on a different person or en-
tity than in the case of transactions involv-
ing similar property, goods, services, or in-
formation 
accomplished 
through 
other
means; or
‘‘(iv) establishes a classification of
Internet access provider for purposes of es-
tablishing a higher tax rate to be imposed
on such providers than the tax rate gen-
erally applied to providers of similar infor-
mation services delivered through other
means; or
‘‘(B) any tax imposed by a State or politi-
cal subdivision thereof, if—
‘‘(i) the use of a computer server by
a remote seller to create or maintain a site
on the Internet is considered a factor in
determining a remote seller’s tax collection
obligation; or
‘‘(ii) a provider of Internet access is
deemed to be the agent of a remote seller
for determining tax collection obligations
as a result of—
‘‘(I) the display of a remote sell-
er’s information or content on the
computer server of a provider of
Internet access; or
‘‘(II) the processing of orders
through the computer server of a pro-
vider of Internet access;
‘‘(4) ELECTRONIC COMMERCE.—The term ‘elec-
tronic commerce’ means any transaction conducted
over the Internet or through Internet access, com-
prising the sale, lease, license, offer, or delivery of
property, goods, services, or information, whether or
not for consideration, and includes the provision of
Internet access.
‘‘(5) INFORMATION SERVICES.—The term ‘in-
formation services’ has the meaning given such term
in section 3(20) of the Communications Act of 1934
as amended from time to time.
‘‘(6) INTERNET.—The term ‘Internet’ means
the combination of computer facilities and electro-
magnetic transmission media, and related equipment
and software, comprising the interconnected world-
wide network of computer networks that employ the
Transmission Control Protocol/Internet Protocol, or
any predecessor or successor protocol, to transmit
information.
‘‘(7) INTERNET
ACCESS.—The term ‘Internet
access’ means a service that enables users to access
content, information, electronic mail, or other serv-
ices offered over the Internet, and may also include
access to proprietary content, information, and other
services as part of a package of services offered to
consumers. Such term does not include telecommuni-
cations services.
‘‘(8) MULTIPLE TAX.—The term ‘multiple tax’
means:
‘‘(A) Any tax that is imposed by one State
or political subdivision thereof on the same or
essentially the same electronic commerce that is
also subject to another tax imposed by another
State or political subdivision thereof (whether
or not at the same rate or on the same basis),
without a credit (for example, a resale exemp-
tion certificate) for taxes paid in other jurisdic-
tions. The term ‘multiple tax’ shall not include
a sales or use tax imposed by a State and 1 or
more political subdivisions thereof pursuant to
a law referred to in section 151(b)(1) on the
same electronic commerce or a tax on persons
engaged in electronic commerce which also may
have been subject to a sales or use tax thereon.
For purposes of this subparagraph, the term
‘sales or use tax’ means a tax that is imposed
on or incident to the sale, purchase, storage,
consumption, distribution, or other use of tan-
gible personal property or services as may be
defined by laws imposing such tax and which is
measured by the amount of the sales price or
other charge for such property or service); or
‘‘(B) Any tax on Internet access if the
State or political subdivision thereof classifies
such Internet access as telecommunications or
communications services under State law and
such State or political subdivision thereof has
also imposed a tax on the purchase or use of
the underlying telecommunications services that
are used to provide such Internet access with-
out allowing a credit for other taxes paid, a sale
for resale exemption, or other mechanism for
eliminating duplicate taxation.
‘‘(9) REMOTE COMMERCE.—The term ‘remote
commerce’ means the sale, lease, license, offer, or
delivery of property, goods, services, or information
by a seller in 1 State to a purchaser in another
State.
‘‘(10) REMOTE
SELLER.—The term ‘remote
seller’ means a person who sells, leases, licenses, of-
fers, or delivers property, goods, services, or infor-
mation from one State to a purchaser in another
State.
‘‘(11) STATE.—The term ‘State’ means any of
the several States, the District of Columbia, or any
territory or possession of the United States.
‘‘(12) TAX.—The term ‘tax’ means—
‘‘(A) any levy, fee, or charge imposed
under governmental authority by any govern-
mental entity; or
‘‘(B) the imposition of or obligation to col-
lect and to remit to a governmental entity any
such levy, fee, or charge imposed by a govern-
mental entity.
Such term does not include any franchise fees or
similar fees imposed by a State or local franchising
authority, pursuant to section 622 or 653 of the
Communications Act of 1934.
‘‘(13) TELECOMMUNICATIONS
SERVICES.—The
term ‘telecommunications services’ has the meaning
given such term in section 3(46) of the Communica-
tions Act of 1934, as amended from time to time.’’.
(b) CONFORMING
AMENDMENT.—Title 4 of the
United States Code is amended in the table of chapters
by adding at the end the following:
‘‘6. Moratorium on Certain Taxes ................................................
151’’.
SEC. 3. PROVISION OF INTERNET ACCESS AND ONLINE
SERVICES.
Title II of the Communications Act of 1934 is
amended by inserting after section 230 (47 U.S.C. 230)
the following new section:
‘‘SEC. 231. PROHIBITION ON REGULATION OF INTERNET AC-
CESS AND ONLINE SERVICES.
‘‘(a) PROHIBITION.—The Commission shall have no
authority or jurisdiction under this title or section 4(i),
nor shall any State commission have any authority or ju-
risdiction, to regulate the prices or charges paid by sub-
scribers for Internet access or online services.
‘‘(b) PRESERVATION
OF AUTHORITY.—Nothing in
this subsection shall limit or otherwise affect—
‘‘(1) the Commission’s or State commissions’
implementation of the Telecommunications Act of
1996 (Public Law 104–104) or the amendments
made by such Act; and
‘‘(2) the Commission’s or State commissions’
authority to regulate telecommunications carriers
that offer Internet access or online services in con-
junction with the provision of any telephone toll,
telephone exchange, or exchange access services as
such terms are defined in title I.
‘‘(c) DEFINITIONS.—As used in this section:
‘‘(1) INTERNET.—The term ‘Internet’ means
the combination of computer facilities and electro-
magnetic transmission media, and related equipment
and software, comprising the interconnected world-
wide network of computer networks that employ the
Transmission Control Protocol/Internet Protocol, or
any predecessor or successor protocol, to transmit
information.
‘‘(2) INTERNET
ACCESS.—The term ‘Internet
access’ means a service that enables users to access
content, information, and other services offered over
the Internet, but does not mean a telecommuni-
cations service.
‘‘(3) ONLINE SERVICE.—The term ‘online serv-
ice’ means the offering or provision of Internet ac-
cess with the provision of other information serv-
ices.’’.
SEC. 4. FEDERAL REGULATORY FEES.
(a) NO REGULATORY FEES.—Section 9(h) of the
Communications Act of 1934 (47 U.S.C. 159(h)) is
amended by inserting ‘‘; or (3) providers of Internet access
or online service’’ after ‘‘(47 C.F.R. Part 97)’’ .
(b) CONFORMING AMENDMENT.—Section 9(h) of the
Communications Act of 1934 (47 U.S.C. 159(h)) is
amended by striking ‘‘or’’ that appears before ‘‘(2)’’.
(c) DETERMINATION.—Not later than 1 year after
the date of the enactment of this Act, the National Tele-
communications and Information Administration shall de-
termine whether any direct or indirect Federal regulatory
fees, other than the fees identified in subsection (a), are
imposed on providers of Internet access or online services,
and if so, make recommendations to the Congress regard-
ing whether such fees should be modified or eliminated.
SEC. 5. REPORT ON FOREIGN COMMERCE.
(a) CONTENTS OF REPORT.—In order to promote
electronic commerce, the Secretary of Commerce, in con-
sultation with appropriate committees of the Congress,
shall undertake an examination of—
(1) barriers imposed in foreign markets on
United States providers of property, goods, services,
or information engaged in electronic commerce and
on United States providers of telecommunications
services;
(2) how the imposition of such barriers will af-
fect United States consumers, the competitiveness of
United States citizens providing property, goods,
service, or information in foreign markets, and the
growth and maturing of the Internet; and
(3) what measures the Government should pur-
sue to foster, promote, and develop electronic com-
merce in the United States and in foreign markets.
(b) PUBLIC COMMENT.—For purposes of this section,
the Secretary of Commerce shall give all interested per-
sons an opportunity to comment on the matters identified
in subsection (a) through written or oral presentations of
data, views, or arguments.
(c) TRANSMITTAL TO THE PRESIDENT.—Not later
than 18 months after the date of the enactment of this
Act, the Secretary of Commerce shall transmit to the
President a report containing the results of the examina-
tion undertaken in accordance with subsection (a).
(d) RECOMMENDATIONS OF THE PRESIDENT.—Not
later than 2 years and 45 days after the date of the enact-
ment of this Act, the President shall review the report de-
scribed in subsection (c) and submit to the appropriate
committees of Congress such policy recommendations as
the President deems necessary or expedient.
SEC. 6. DECLARATION THAT THE INTERNET SHOULD BE
FREE OF FOREIGN TARIFFS, TRADE BAR-
RIERS, AND OTHER RESTRICTIONS.
It is the sense of the Congress that the President
should seek bilateral and multilateral agreements to re-
move barriers to global electronic commerce, through the
World Trade Organization, the Organization for Economic
Cooperation and Development, the International Tele-
communications Union, the Asia Pacific Economic Co-
operation Council, the Free Trade Area of the Americas,
and other appropriate international fora. Such agreements
should require, inter alia, that the provision of Internet
access or online services be free from undue and discrimi-
natory regulation by foreign governments and that elec-
tronic commercial transactions between United States and
foreign providers of property, goods, services, and infor-
mation be free from undue and discriminatory regulation,
international tariffs, and discriminatory taxation.
SEC. 7. NO EXPANSION OF TAX AUTHORITY.
Nothing in this Act shall be construed to expand the
duty of any person to collect or pay taxes beyond that
which existed immediately before the date of the enact-
ment of this Act.
SEC. 8. PRESERVATION OF AUTHORITY.
Nothing in this Act shall limit or otherwise affect the
implementation of the Telecommunications Act of 1996
(Public Law 104–104) or the amendments made by such
Act.
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