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HomeMy Public PortalAbout11-06-2001LPFA COPIES OF THE STAFF REPORTS OR OTHER WRITTEN DOCUMENTATION RELATING TO EACH ITEM OF BUSINESS REFERRED TO ON THE AGENDA ARE ON FILE /N THE OFFICE OF THE CITY CLERK A PERSON WHO HAS A QUESTION CONCERNING ANY OF THE AGENDA ITEMS MAY CALL THE CITY MANAGER RICARDO SAN VICE PRESIDE AT THE REGULAR MEETING OF ~ E C E I V E V THE LYNWOOD PUBLIC FINANCE AUTHORITY pin' OF LYNWppp TO BE HELD ON NOVEMBER 6 2001 CITY CLERKS OFFICE 6:00 P.M. f1`(~V 0 i ~n.r,~ COUNCIL CHAMBERS ~~( AGENDA ITEMS ON FILE FOR CONSIDERATION ~j~ ~D ;~~ ~'~8~~r~0~llr~p1~ '3~ ~5~~ ~r~~~ 4~! ~F ,2~ CHEZ LOUIS BYRD NT MEMBER ARTURO REYES MEMBER CHIEF ADMINISTRATIVE OFFICER RALPH W. DAVIS, III SECRETARY ANDREA L. HOOPER 1. CALL TO ORDER PAUL H. RICHARDS, II PRESIDENT OPENING CEREMONIES 2. ROLL CALL OF MEMBERS Louis Byrd Armando Rea Arturo Reyes Ricardo Sanchez ~ ~_ Paul Richards TREASURER IRIS PYGATT 3. CERTIFICATION OF AGENDA POSTING BY SECRETARY PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) PUBLIC ORAL COMMUNICATIONS IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO SUBSTANTIAL DISCUSSION OF THE ISSUE BY THE LYNWOOD PUBLIC FINANCE AUTHORITY, BUT IT IS ALL RIGHT FOR THE LYNWOOD PUBLIC FINANCE AUTHORITY MEMBERS TO REFER THE MATTER TO THE STAFF OR SCHEDULE SUBSTANTIVE DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54950-54962, Part III, Paragraph 5.) ARMANDO REA MEMBER FINANCE DIRECTOR ALFRETTA EARNEST . ~ • 4. .MINUTES OF PREVIOUS MEETLNG: Special .Meeting,. September 24, 2001 Regular Meeting,. October 2, 2001 Special Meeting, October 5, 2001 Special Meeting, October 8, 2001 Special Meeting, October 15, 2001 Regular Meeting,. October 16, 2001 Special Meeting, October 23, 2001 Special Meeting, October 26, 2001 5. LEGISLATION APPROVING EXTENDED MORATORIUM ON INTERNET TAXATION Comments: The Internet Tax ,.'Freedom. Act (ITFA) was initially signed into law on October 21, 1998. The act imposed a moratorium on levying of new state and local taxes on internet access services. The purpose of this item is to have the Lynwood Public Financing Authority review the attached. information regarding the Senate's approval to extend the moratorium on internet taxation and receive and file information. Recommendation: Staff respectfully recommends that the Public Financing. Authority receive and file attached, information regarding federal legislative action extending the moratorium on internet sales tax. ADJOURNMENT MOTION TO .ADJOURN TO THE REGULARLY SCHEDULED MEETING ON NOVEMBER 6, 2001 AT 6:00 P.M., IN THE COUNCIL CHAMBERS OF THE CITY HALL, 11330 BULLIS ROAD., CITY OF_LYNWOOD, .CALIF.ORNIA. 2 • LYNWOOD PUBLIC FINANCE AUTHORITY SPECIAL MEETING - SEPTEMBER 24, 2001 .The :Public Finance Authority of the City of Lynwood' met in a Special Meeting at 11330 Bullis Road on the above date at 9:20 a.m. - President Richards presiding. .Members Byrd, Rea, Reyes, Sanchez and Richards answered the joint roll call . for all agencies. Also present were Chief Administrative Officer Davis, City Attorney Thever, Assistant City Attorney Calsada, Secretary Hooper and Treasurer Pygatt. Secretary Hooper announced that the agenda had been posted in accordance with the Brown Act. PUBLIC ORAL COMMUNICATIONS (Regarding Agenda. Items Only) NONE PUBLIC ORALS COMMUNICATIONS NONE Member Rea left at 11:30 a.m. Item.#4: PARKING ENFORCEMENT PROGRAM COST & REVENUES ASSESSMENT Parking Enforcement Officer Jerron Whitaker gave a brief presentation on the Parking Enforcement. Program Cost and Revenues Assessment. Member Reyes stated he would like to hire six (6) fulltime Parking Enforcement Officers. President Richards thanked Officer Jerron Whitaker-for the presentation, stated he is very impressed. It was moved Vice President Sanchez, seconded by Member Byrd to approve three fulltime Officers and one fulltime Supervisor for the Parking Enforcement Department. . ROLL CALL: AYES: MEMBER BYRD, REYES, SANCHEZ, RICHARDS NOES: NONE ABSENT: MEMBER' REA ADJOURNMENT Having no further discussion, it was moved by Member Reyes, seconded by .Member Byrd and carried to adjourn the meeting at 12:30 p.m. - Paul H. Richards, il, Mayor Andrea L. Hooper, City Clerk A(}ENVA ITEM LYNWOOD PUBLIC FINANCE AUTHORITY REGULAR MEETING OCTOBER 2, 2001 - The Public Finance Authority of the City of Lynwood met in a Regular Meeting at 11330 Bullis Road on the above date at 6:15 p.m. President Richards presiding Members Byrd, Rea, Reyes, Sanchez and Richards answered the joint roll call for all of the Agencies. Also present were Chief Administrative Officer Davis, City Attorney Thever, Secretary Hooper and Treasurer Pygatt. Secretary Hooper announced that the agenda had been posted in accordance with the Brown Act. PUBLIC ORAL COMMUNICATIONS NONE Item #4:. Minutes from Previous Meetings It was moved by Member Byrd, seconded by Vice President Sanchez and carried to approve the following minutes: • Special Meeting September 6, 2001 • Special Meeting September 12, 2001 • Special Meeting September 17, 2001 ADJOURNMENT Having no further discussion, it was moved by Vice Chairman Sanchez, seconded by Member Byrd, and carried to adjourn the meeting at 10:20 p.m. ~,-~_ Paul H. Richards, II, Mayor Andrea L. Hooper, City Clerk OCTOBER2.2001 LPFA • • LYNWOOD PUBLIC FINANCE AUTHORITY SPECIAL MEETING OCTOBER 8, 2001 The Public Finance Authority of the City of Lynwood met in a Special Meeting at 11330 Bullis Road on the above date at 9:22 a.m. President Richards presiding. Members Byrd, Rea, Reyes, Sanchez and Richards answered the joint roll call for all agencies. Also present were Chief Administrative Officer Davis, City Attorney Thever, Secretary Hooper and Treasurer Pygatt. Secretary Hooper announced that the agenda had been posted in accordance with the Brown Act. PUBLIC ORAL COMMUNICATIONS NONE Item #4: Property Tax Revenue Allocations -Audits It was moved by Member Reyes, seconded by Member Byrd and carried to receive and file the information. ADJOURNMENT Having no further discussion, it was moved by Councilman Reyes, seconded by Councilman Byrd and carried to adjourn the meeting at 11:17 a.m. Paul H. Richards, II, Mayor Andrea L. Hooper, City Clerk OCTOBER8.2001 LRA I .~ LYNWOOD PUBLIC FINANCE AUTHORITY SPECIAL MEETING OCTOBER 15, 2001 The Public Finance Authority of the City of Lynwood met in a Special Meeting at 11330 Bullis Road on the above date at 9:25 a.m. President Richards presiding:. Members Byrd, Rea, Reyes, Sanchez and Richards answered the Joint Roll Call for all. Agencies. Also present were Chief ,Administrative Officer Davis, City Attorney Thever, Secretary Hooper and Treasurer Pygatt. Secretary Hooper announced that the agenda had been .posted in accordance with the Brown Act. . PUBLIC ORAL COMMUNICATIONS Fidias Monson - 10808 California Avenue Discussed with Council tickets he has received for parking his semi and automobile in the parking lot at Lynwood Plaza. Stated he has received two (2) tickets and that other vehicles that park there are not being cited. Item #4: Review of the City's Revenues Relating to Towing Activities Presentation: J.D. Whitaker, Parking Enforcement Distributed packets to Council and discussed: • Vehicle Removal • Revenue. Totals • Seven Point Plan • Increasing Parking. Enforcement Staff • Rotating Schedules • Revenue Generation Member Reyes asked .staff to look into a blue panted curb on Pope Street. Stated there are not any handicapped people living at the residence and believes the blue curb is being used for commercial purposes. Vice President Sanchez asked who does the ticketing in the evenings, -and discussed other trucks that are parking at the Lynwood Plaza. Asked if someone on the property is collecting money for renting space to the truckers. . President Richards asked staff about parking issues in the evenings.. Asked to . see the Productivity Report from Parking Enforcement relating to the night the gentleman who spoke is making reference to. Member Byrd asked if the trucks that are being ticketed paying their tickets. Also discussed a man living in a truck on Wright Road for the past year and nothing has been done about it. Member Reyes discussed problems with evening and weekend parking on Lilita and Benwell Streets. Member Rea stated Council needs to address the issue of Code Enforcement parking fees. Stated let Parking Enforcement do their jobs. Member Byrd discussed his concern with the increase in canopies in the city being. used as garages. .ADJOURNMENT Having no further discussion, it was moved by Member Reyes, seconded by Member Byrd and carried to adjourn the meeting at 11:07 a.m. Paul H. Richards, II, Mayor Andrea L. Hooper, City Clerk OCTOBER15.2001 LPFA 2 • ~_ LYNWOOD PUBLiC FINANCE AUTHORITY REGULAR MEETING OCTOBER 16, 2001. The Public Finance Authority of the City of Lynwood met in a Regular Meeting at 11330 Bullis Road on the above date at 6:30 p.m. President. Richards presiding. Members Byrd, Rea, Reyes, Sanchez and Richards answered the roll call Also present were City Manager Davis, City Attorney Thever, Secretary Hooper and Treasurer Pygatt. Secretary. Hooper announced that the agenda had been posted in accordance with the Brown Act. City Manager Davis explained that at approximately 5:30 p.m. the City received. two separate .calls regarding a bomb threat at two of its city facilities -City Hall- and Bateman Hall. Both facilities were immediately evacuated to ensure the safety of city employees and .members of the public. It was moved by President Richards, seconded by Member Rea and carried due to an emergency situation and to allow the Sheriff and County Fire Departments to thoroughly check the city facilities. Members will recess to Wednesday morning, October 17, 2001 at 7:00 a.m. Meeting recess at 6:30 p.m. Paul H. Richards, II, Mayor Andrea L. Hooper, City Clerk OCTOBER16.2001 LPFA. LYNWOOD PUBLIC FINANCE AUTHORITY MEETING OCTOBER 17, 2001 RECONVENED FROM OCTOBER 16, 2001 - The Public Finance Authority of the City of Lynwood met in a Regular Meeting at 11330 Bullis Road on ,the above date at 7:07 p.m. Due to an emergency the meeting of October 16, 2001 was recessed to October 17, 2001. President Richards presiding. Members Byrd, .Reyes, :Sanchez and Richards answered the Joint Roll Call for all Agencies. Member .Rea was absent. Also present were City Manager Davis, City Attorney Thever, .Secretary Hooper and Treasurer Pygatt. Secretary Hooper announced that the agenda had been posted in accordance with the Brown Act. Member Rea arrived at 7:15 a.m. Item #4: Minutes of Previous Meetings It was moved by Member Byrd, seconded. by Vice-President Sanchez and carried to approve the following Minutes: • Regular Meeting September 18, 2001 • Special Meeting September 21, 2001 • Special Meeting October 1, 2001 Item #5: Internet Tax Freedom Act It was moved by Member Reyes, seconded by Member Byrd and carried to receive and file the information. ADJOURNMENT Hearing no further discussion, it was moved by Cvta~cilman Byrd, seconded by .Mayor Pro Tem. Sanchez and carried to adjourn the meeting at 7:17 a.m. , Paul H. Richards, II, Mayor Andrea L. Hooper, City Clerk OCTOBER17.2001 LPFA _._ • • LYNWOOD PUBLIC FINANCE AUTHORITY SPECIAL MEETING OCTOBER 23, 2001 The Public Finance Authority of the City. of Lynwood met in a Special Meeting at Bateman Hall on the above date at 9:00. Secretary Hooper announced due to a lack of a quorum the meeting scheduled for 9:00 a.m. October 2;3, 2001 is adjourned. Paul H. Richards, 11, Mayor ' Andrea L. Hooper, City.Clerk OCTOBER23.2001 LPFA • LYNWOOD PUBLIC FINANCE AUTHORITY SPECIAL MEETING - OCTOBER 26, 2001 The Lynwood Public Finance Authority of the City of Lynwood met in a Special Meeting at 11330 Bullis Road on the above date at 12:48 p.m.. President Richards convened the Special Meeting of the Lynwood City Council, Lynwood Redevelopment Agency, Lynwood Information Inc., Lynwood Public Finance Authority, President Richards presiding. Members Byrd, Reyes, Sanchez and Richards answered the roll call. Also present were Chief Administrative Officer Davis, City Attorney Thever, and Assistant City Manager,Hempe. Member Rea was absent. Secretary Hooper was absent. Treasurer Pygatt was absent. Assistant City Manager announced that the agenda had been posted in accordance with the Brown Act. PUBLIC ORAL COMMUNICATIONS Agenda Items of Any Aforementioned Agencies NONE PUBLIC ORAL COMMUNICATIONS NONE ITEM # 4 VEHICLE IMPOUND/STORAGE ADMINISTRATIVE FEE It was moved by Member Reyes for staff to get the full recovery fee by increasing it to $119, seconded Byrd. ~- ROLL CALL: AYES: MEMBER BYRD, REYES, SANCHEZ, RICHARDS NOES: NONE ABSTAIN: NONE ABSENT: MEMBER REA ADJOURNMENT Having no further.discussion, it was moved by Mayor Richards seconded by Councilman Byrd .and carried to adjourn the meeting at 2:22 p.m. ., . DATE: November 6, 2001 TO: THE HONORABLE PRESIDENT AND MEMBERS OF THE AUTHORITY FROM: Ralph W. Davis ill; City Manager BY: Alfretta F. Earnest, Finance Director ~~1 SUBJECT: LEGISLATION APPROVING EXTENDED MORATORIUM ON .INTERNET TAXATION. PURPOSE: The purpose of this item is to have the Lynwood Public Financing Authority review the attached information regarding the Senate's approval to extend the moratorium on internet taxation and receive and file information. BACKGROUND: The Internet Tax Freedom Act (ITFA) was initially signed into law on October 21, 1998. The act imposed a moratorium on levying of new state and local taxes on internet access services (i.e typical $20.00_ monthly fee for an electronic mail account, the capability to access the World Wide Web, etc.) The moratorium also prohibits certain discriminatory and multiple state and local taxes as defined in ITFA. The ITFA does not directly affect the ability of states and local government to impose sales taxes on purchases of .goods processed over .the internet. Such power has already been constrained ,by U.S. Supreme Court decisions. The court decisions noted that states may only require a mail order catalog company to charge sales tax to its customers and remit the tax to the treasury of the state in which the customer resides. This condition is allowed if the company has some kind of physical presence (i.e. facilities or employees within. the states borders).. Timeline of Events: ~_ / April 24, 2001, Representative Christopher Cox introduced bill H.R. 1552. The bill initially extended the moratorium enacted by the Internet Tax Freedom Act through 2006. / On October 16, 2001 =. Bill reported. with amendments, committed to the committee of the whole House of the Union, and ordered to be printed: The -final bill was amended prior to printing. Section 1101(a) was amended striking 3 years after the date of enactment and inserting an extension through November 1, 2003. CONCLUSION: The extention of moratorium to November 1, 2003 .notes that more than 10,000 state and local agencies with taxing authority over the internet will continue to be barred. not only from taxing internet. access, but also from subjecting buyers and sellers of electronic commerce to taxation in multiple states, or discriminating against internet commerce with taxes which don't apply off-line. A(~Ei1vA FTEM I <, .~.r .. .. ;r ~. October 19, 2001 Issue #38-2001 .~ ~` ~' s~'~sq't .,w. a~r'f~ia~, tam ~ upds e~ ~pisitr 1~3 per ~~u+ka ji~~t ~i'~t ~s~l~fsxria~ ci'a~s. ON THE FEDERAL FRONT: E-COMMERCE This week the House approved by voice vote H.R. 1552, which would extend the moratorium on new and discriminatory Internet taxes (set to expire on October 21, 2001) for two years (until November 1, 2003). The bill originally extended the ban for five years, but .last week .in a surprise to Nouse leadership and Internet retailers, the House Judiciary Commit- tee, on a 19-15 vote, adopted an amendment by Representatives Spencer Bachus (R-AL), Melvin Watts (D-NC) and William Delahunt (D-MA) to trim back the time frame to two years. The amendment was adopted .after Committee Chairman James Sensenbrenner (R-WI) refused to consider amend- ments by Representatives Bachus and Watts address- ing state and local government concerns with the collection of taxes on remote sales. Senator John McCain (R-AZ), who has proposed a similar two-year extension, wrote .Senate Majority Leader Daschle urging that the House bill be consid- ered by the Senate before the moratorium expires. No action has been scheduled yet in the Senate. -~- ;Bill Summery R Stnais ` • ~/thomes.lx.gov/cgi-bin/bdquay/z?d107:HR01552:` ~. Bill Summary & Status jor the 107th Congress H.R1552 Sponsor: Rep Cox, Christopher introduced 4/24/2001) Related Bills: H.R.1675 Latest Major Action: 10/17/2001 Received in the Senate. Title: To extend the moratorium enacted by the Internet Tax Freedom Act through 2006, and for other purposes. STATUS: (color indicates Senate actionc) 4/24/2001: Referred to the House Committee on the Judiciary. 5/9/2001: Referred to the Subcommittee on Commercial and Administrative La~i~. 6/26/2001: Subcommittee Hearings Held. 8/2/2001: Subcommittee Consideration and Mark-up Session Held. 8/2/2001: Forwarded by Subcommittee to Full Committee by Voice Vote. 10/10/2001: Committee Consideration and Mark-up Session Held. 10/10/2001: Ordered to be. Reported (Amended) by Voice Vote. 10/16/20013:06pm: Reported (Amended) by the Committee on Judiciary, H. Rept. 107-240. 10/16/2001 3:07pm: Placed on the Union Calendar, Calendar No. 143. 10/16/2001 3:14pm: Mr. Sensenbrenner moved to suspend the rules and pass the bill, as amended. 10/16/2001 3:14pm: Considered under suspension of the rules. (consideration: CR H6803-6808) 10/16/2001 3:Slpm: On motion to suspend the rules and pass the bill, as amended Agreed to by-voice vote. (text: CR H5803) 10/16/2001 3:51 pm: Motion to reconsiderlaid on the table Agreed to without~cction. 10/16/20013:S1pm: The title of the measure was amended. Agreed to without objection. 10/17/2001: Received in the Senate. _.. .... Internet Tax Nondiscrimination Act (Reported in the House) HR 1.5 52 RH Union Calendar No. 143 107th CONGRESS 1st Session H. R 1552 [Report No. 107-240] To extend the. moratorium enacted by the Internet Tax Freedom Act through 2006, and for other purposes. IN THE HOUSE OF REPRESENTATIVES April 24, 2001 Mr. COX (for himself, Mr. GOODLATTE; and Mr. TOM DAMS of Virginia) introduced the following bill.; which was referred to the Committee on the Judiciary_ October 1.6, 2001 Additional sponsors: Mr. HORN,: Mr. MCKEON, Mr. CALVERT, Mr. DREIER, Mr. OSE, Mr. GARY G. MILLER of California, Mr. ROYCE, Mr. POMBO, Mr. ISSA, Mr. ROHRABACHER, Mr. HERGER, Mr. CANNON, Mr. WELDON of Florida, Ms. MCKINNEY, and Mr. SCHAFFER October 16, 2001 Reported with amendments, committed to the Committee of themhole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic) A BILL To extend the moratorium enacted by the Internet Tax Freedom Act through ?006, and for other ..purposes. Be it enacted by the Senate and House c f Representatives c f the United States of America in Congress assembled, [Struck out->] SECTION 1. SHORT TITLE . [<-Struck Out) [Struck OUt->] This Act may be cited as the Internet Tax Nondiscrimination Act'. [<-Struck out] - [Struck out->] SEC. 2. EXTENSION OF INTERNET TAX FREEDOM ACT MORATORIUM. [<-Struck out] [Struck OUt->] (a) EXTENSION; INTERNET ACCESS TAXES- Section 11.01 of 'the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended-- {<-StrUCk Out] [StrUCk OUt->] (1) by stri}:ing 'taxes during the period beginning on October 1, 1998, and ending 3 years after the date of enactment of this Act--' in subsection (a) and inserting 'taxes:'; (<_StrUCk Out] [StrUCk Out->] (2) by striking paragraph (1) of subsection (a) and inserting the following: [<-Struck OUt] [StrUCk OUt->] (1) "Taxes on Internet access . ' ; [GStrUCk OUt] [StrUCk Out->] (3) by inserting before 'multiple' in paragraph (2) of •subsection (a) the following: 'During the period beginning on October 1, .1998, and ending on December 31, 2006, ' ; [<_StrUCk OUt] [Struck OUt->] (4) by striking subsection (dsand [<-StrUCk oUt] [Struck OUt->] (5) by redesignating subsections (e) and (f) as subsections (d) and (e) , respectively. [<_StrUCk Out] {StrUCkOUt->] (bJ CONFOR'~II:~'G AMEtiTD:~;DNi- Sectic„ 1104(10) of Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by stri};ing .'services unless such tax was generally imposed and actually enforced prior to October 1, 1998.' and inserting 'services.' . [GStrUCk Out] . SECTION 1. SHORT TITLE This Act maybe cited as the 'Internet Tczr Nondiscrimination Act'. • SEC. 2. EXTENSION OFINTERNET TAX FREEDOMACT MORATORIUM. Section 1101(a) of the Internet Tax Freedom .Act (;~7 U.S.C. 1 ~ 1 note) is amended by striking '3 years after the date of the enactment of this Act' and inserting 'on November 1, 2003'. Amend the title so as to read: 'A bill to extend the moratorium enacted by the Internet Tax Freedom Act through November 1, 2003; and for other purposes.'. Union Calendar No. 143 107th CONGRESS 1st Session A. R. 1552 [Report No. 107-240] A BILL To extend the moratorium enacted by the Internet Tax Freedom Act through ?006, and for other purposes. October 16, 2001 Reported with amendments, committed to the Committee of the Whole. House on the State of the Union, and ordered to be printed Internet Tax Freedom Law. ® http://www.freedom.gov/library/itfa/f The Internet Tax Freedom Bill, H.R. 4328 signed into law October 21, 1998 TITLE XI-MORATORNM ON CERTAIN TAXES SEC. 1100. SHORT TITLE. This title may be .cited as the ' `Internet Tax Freedom Act " SEC. 1101. MORATORIUM. (a) MORATORIUM.-No State or political subdivision thereof shall impose any of the following taxes during the period beginning on October 1, 1998,. and ending 3 years after the date of the enactment of this Act- (1) taxes on Internet access, unless such tax was gen-erally imposed and actually enforced prior to October 1, 1998; and (2) multiple or discriminatory taxes on electronic commerce. (b) PRESERVATION OF STATE AND LOCAL TAXING AUTHORITY.-Except as provided in this section, nothing in this title shall be construed to modify, impair, or super-sede, or authorize the modification, impairment, or super-seding of, any State or local law pertaining to taxation that is otherwise permissible by or under the Constitution of the United States or other Federal law and in effect on the date of enactment of this Act. (c) LIABILITIES AND PENDING CASES.-Nothing in this title affects liability for taxes accrued and enforced be-fore the date of enactment of this Act, nor does this title affect ongoing litigation relating to such taxes. (d) DEFINITION OF GENERALLY IMPOSED AND ACTU-ALLY ENFORCED.-For purposes of this section, a tax has been generally imposed and actually enforced prior to Oc-tober 1, 1998, if, before that date, the tax was authorized by statute and either- (1) a provider of Internet access services had a rea-sonable opportunity to know by virtue of a rule or other public proclamation made by the appropriate administra-tive agency of the State or political subdivision thereof, that such agency has interpreted and applied such tax to Internet access services; or ~_ (2) a State or political subdivision thereof generally collected such tax on charges for Internet access. (e) EXCEPTION TO MORATORIUM (1) IN GENERAL.-Subsection (a) shall also not apply in the case of any person or entity who knowingly and with knowledge of the character of the material, in inter-state or foreign commerce by means of the World Wide Web, makes any communication for commercial purposes that is available to any minor and that includes any ma-terial that is harmful to minors unless such person or en-tity has restricted access by minors. to material that is harmful to l of I I 10/25/200! )0:54 , lntemet Tau Freedom [.aw • • http://www.freedom.gov/-ibrary/itfa/fin minors- (A) by requiring use of a credit card, debit account, adult access code, or adult personal identification number; (B) by accepting a digital certificate that verifies age; or (C) by any other reasonable measures that are feasible under available technology. {2) SCOPE OF EXCEPTION.-For purposes of para-graph (1), a person shall not be considered to making a communication for commercial purposes of material to the extent that the person is- (A) a telecommunications carrier engaged in the pro-vision of a telecommunications service; (B) a person engaged in the business of providing an Internet access service; {C) a person engaged in the business of providing an Internet information location tool; or {D) similarly engaged in the transmission, storage, retrieval, hosting, formatting, or translation (or any com-bination thereof) of a communication made by another person, without selection or alteration of the communica-tion. (3) DEFINITIONS.-In this subsection: (A) BY MEANS OF THE WORLD WIDE-WEB.-The term "by means of the World Wide Web" means by placement of material in a computer server-based file archive so that it is publicly accessible, over the Internet, using hypertext transfer protocol, file transfer protocol, or other similar protocols. (B) COMMERCIAL PURPOSES; ENGAGED IIV THE BUSI-NESS.- (i) COMMERCIAL PURPOSES.-A person shall be con-sidered to make a communication for commercial purposes only if such person is engaged in the business of making such communications. (ii) ENGAGED IN THE BUSINESS.-The term "engaged in the business" means that the person who makes acorn-munication, or offers to make a communication, by means of the World Wide Web, that includes any material that is harmful to minors, devotes time, attention, or labor to such activities, as a regular course of such person's trade or business, with the objective of earning a profit as a re-suit of such activities (although it is not necessary that the person make a profit or that the making or offering to make such communications be the person's sole or prin-cipal business or source of income). A person may be con-sidered to be engaged in the business of making, by means of the World Wide Web, communications for commercial purposes that include material that is harmful to minors, only if the person knowingly causes the material that is harmful to minors to be posted on the World Wide Web or knowingly solicits such material to be posted on the World Wide Web. (C) INTERNET.-The term "Internet" means collec-tively the myriad of computer and telecommunications fa-cilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control 2of11 10/?5/2001 10:54 A~ Internet Tax Freedom Law : ~ ~ ~ ,. ~ httpa/www.freedom.gov/library/itfa/fi • - • ProtocoV Internet Protocol, or any predecessor~or successor protocols to such protocol, to communicate information of all kirids li}% wire or radio. {D) INTERNET ACCESS SERVICE.-The term "Internet access service" means a service that enables users to access content, information, electronic mail, or other services of-fered over the Internet and may also include access to pro-prietary content, information, and other services as part of a package of services offered to consumers. Such term does not include telecommunications services. - (E) INTERNET INFORMATION LOCATION TOOL.-The term "Internet information location tool" means, a service that refers or links users to an online location on the World Wide Web. Such term includes directories, indices, references, pointers, and hypertext links. (F) MATERIAL THAT IS I~ARMFUL TO MINORS.-The term "material that is harmful to minors" means any communication, picture, image, graphic image file, article, recording, writing, or other matter of any kind that is ob-scene or that- (i) the average person, applying contemporary com-munity standards, would find, taking the material as a whole and with respect to minors, is designed to appeal to, or is designed to pander to, the prurient interest; (ii) depicts, describes, or represents, in a manner pa-tently offensive with respect to minors, an actual or simu-lated sexual act or sexual contact, an actual or simulated normal or perverted sexual act, or a lewd exhibition of the genitals orpost-pubescent female .breast; and (iii) taken as a whole, lacks serious literary, artistic, political, or scientific value for minors. (G) MINOR.-The term "minor" means any person under 17 years of age. (H) TELECOMMUNICATIONS CARRIER; TELECOMMUNI-CATIONS SERVICE.-The terms "telecommunications car-rier" and "telecommunications service" have the meanings ..given such terms in section 3 of the Communications Act of 1934 (47 U.S.C. 153). (f) ADDITIONAL EXCEPTION TO MOR-ATORIUM.- (I) INGENERAL.-Subsection (a) shad also not apply with respect to an Internet access provider, unless, at the time of entering into an agreement with a customer for the provision of Internet access services; such provider offers such customer (either for a fee or at no charge) screening software that is designed to permit the customer to limit access to material on the Internet that is harmful to mi-nors. -~._ (2) DEFINITIONS.-In this subsection: (A) INTERNET ACCESS PROVIDER.-The term "Internet access provider" means a person engaged in the business of providing a computer and communications facility through which a customer may obtain access to the Internet, but does not include a common carrier to the extent that it provides only telecommunications serv-ices. (B) INTERNET ACCESS SERVICES.-The term "Internet access services" means the provi-sion of computer and communications services through which a customer using a computer and a modem or other communications device may obtain access to the Internet, but 3 of 1 10/25/2001 f 0:54 , Internet Tax Freedom Law . • http:!/www.freedom.gov/library/itfa/fi: does not include telecommunications services provided by a com-mon carrier. (C) SCREENING SOFTWARE.-The term "screening software" means software that is de-signed to permit a person to limit access to ma-terial on the Internet that is harmful to minors. (3) APPLICABILITY.-Paragraph (1) shall apply to agreements for the provision of Internet access serv-ices entered into on or after the date that is 6 months after the date of enactment of this Act. SEC. 1102. ADVISORY COMMISSION ON ELECTRONIC COM-MERCE. (a) ESTABLISHMENT OF COMMISSION.-There is es-tablished a commission to be kno~~n as the Advisory Com-mission on Electronic Commerce (in this title referred to as the "Commission"). The Commission shall- (1) be composed of 19 members appointed in ac-cordance with subsection (b), including the chair-person who shall be selected by the members of the Commission from among themselves; and (2) conduct its business in accordance with the provisions of this title. (b) MEMBERSHIP.- (1) IN GENERAL.-The Commissioners shall serve for the life of the. Commission. The membership of the Commission shall be as follows: (A) 3 representatives from the Federal Government, comprised of the Secretary of Com-merce, the Secretary of the Treasury, and the United States Trade Representative (or their re-spective delegates). (B) 8 representatives from State and local governments (one such representative shall be from a State or local government that does not impose a sales tax and one representative shall be from a State that does not impose an income tax). (C) 8 representatives of the electronic com-merce industry (including small business), tele-communications carriers, local retail businesses, and consumer groups, comprised of- (i) 5 individuals appointed by the Majority Leader of the Sg~te; (ii) 3 individuals appointed by the Minority Leader of the Senate; (iii) 5 individuals appointed by the Speaker of the House of Representatives; and (iv) 3 individuals appointed by the Minority Leader of the House of Represent-atives. (2)APPOINTMENTS.-Appointments to the Com-mission shall be made not later than 45 days after the date of the enactment of this Act. The chairperson shall be selected not later than 60 days after the date of the enactment of this Act. 4 of I I 10/25/2001 10:54 A. Internet Tax Frcedom Law • httpJlwww.freedom.gov/Iibrary/itfa/f (3) VACANCIES.-Any vacancy in the Commis-sion shall not affect its powers, but shall be filled in the same manner as the original appointment. (c) ACCEPTANCE OF GIFTS AND GRANTS.-The Com-mission 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 Commission. 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 Depart-ment of Commerce, the Department of State, the Depart-ment of the Treasury, and the Office of the United States Trade Representative. The Commission shall also have rea-sonable access to use the facilities of any such Department or Office for purposes of conducting meetings. (e) SUNSET.-The Commission shall terminate 18 months after the date of the enactment of this Act. (f) RULES OF THE COMMISSION.- (1) QUORUM.-Nine members of the Commission shall constitute a quorum for conducting the business of the Commission. (2) MEETINGS.-Any meetings held by the Com-mission shall be duly noticed at least 14 days in ad-vance and shall be open to the public. (3) OPPORTUNITIES TO TESTIFY.-The Commis-sion shall provide opportunities for representatives of the general public, taxpayer groups, consumer groups, and State and local government officials to testify. (4) ADDITIONAL RULES.-The Commission may adopt other rules as needed. (g) DUTIES OF THE COMMISSION.- (1) IN GENERAL.-The Commission shall conduct a thorough study of Federal, State and local, and international taxation and tariff treatment oftrans-actions using the Internet and Internet access and other comparable intrastate, interstate or inter-national sales activities. (2) ISSUES TO BE STUDIED.-The Commission may include in the study under subsection (a}- (A) an examination of- (i) 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; and (ii) how the imposition of such barriers will affect United States consumers, the competitiveness of United States citizens providing property, goods, services, or infor mation in foreign markets, and the growth and maturing of the Internet; 5 of I 1 10/25!2001 10:54 , i Internet Tax Freedom Law .. httpJ/www.frcedom.gov/Iibrary/itfa/fi (B) an examination of the collection and administration of consumption taxes on elec-tronic . ~ commerce in other countries and the Unit-ed States, and the impact of such collection on the global economy, including an examination of the relationship between the collection and ad-ministration of such taxes when the transaction uses the Internet and when it does not; (C) an examination of the impact of the Internet and Internet access (particularly voice transmission) on the revenue base for taxes im-posed under section 4251 of the Internal Revenue Code of 1986; (D) an examination of model State legisla-tion that- (i) would provide uniform definitions of categories of property, goods, service, or information subject to or exempt from sales and use taxes; and (ii) would ensure that Internet access services, online services, and communica-tions and transactions using the Internet, Internet access service, or online services would be treated in a tax and techno-logically neutral manner relative to other forms of remote sales; (E) an examination of the effects of tax-ation, including the absence of taxation, on all interstate sales transactions, including trans-actions using the Internet, on retail businesses and on State and local governments, which ex-amination may include a review of the efforts of State and local governments to collect sales and use taxes owed on in-State.purchases from out-of- State sellers; and (F) the examination of ways to simplify Federal and State and local taxes imposed on the provision of telecommunications services. (3) EFFECT ON THE COMMUNICATIONS ACT OF 1934.-Nothing in this section shall include an examina-tion of any fees or charges imposed by the Federal Com-munications Commission or States related to- (A) obligations under the Communications Act of 1934 (47 U.S.C. 1 ~ 1 et seq.); or (B) the implementation of the Telecommunications Act of 1996 (or of amendments made by -that Act). (h) NATIONAL TAX ASSOCIATION COMMUNICATIONS AND ELECTRONIC COMMERCE TAX PROJECT.-The Com-1796 mission shall, to the extent possible, ensure that its work does not undermine the efforts of the National Tax Asso-ciation Communications and Electronic Commerce Tax Project. SEC. 1103. REPORT. '~- Not later than 18 months after the date of the enact-ment of this Act, the Commission shall transmit to Con-gress for its consideration a report reflecting the results, including such legislative recommendations as required to address the findings of the Commission's study under this title. Any recommendation agreed to by the Commission shall be tax and. technologically neutral and apply to all forms of remote commerce. No finding or recommendation shall be included in the report unless agreed to by at least two-thirds of the members of the Commission serving at the time the finding or recommendation is made. 6 of 9 l 10/25/2001 10:54 A Internet'Tax Freedom Law ~~. . SEC. 1104. DEFINITIONS. For the purposes of this title: http://www.freedom.gov/library/itfa/f (1) BIT TAX.-The term "bit tax" means any tax on electronic commerce expressly imposed on or measured by the volume of digital information transmitted electroni-cally, or the volume of digital information per unit of time transmitted electronically, but does not include taxes im-posed on the provision of telecommunications services.1797 (2) DISCRIMINATORY TAX.-The term "discriminatory taz" means- (A) any tax imposed by a State or political subdivi-lion thereof on electronic commerce that- (i) is not generally imposed~and legally collectible by such State or such political subdivision on transactions in-volving similar property, goods, services, or information accomplished through other means; (ii) is not generally imposed and legally collectible at the same rate by such State or such political subdivision on transactions involving similar property, goods, services, or information accomplished 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 entity than in the case of trans-actions involving similar property, goods, services, or in-formation accomplished through other means; (iv) establishes a classification of Internet access serv-ice providers or online service providers for purposes of es-tablishing a higher tax rate. to be imposed on such provid-ers than the tax rate generally applied to providers of similar information services delivered through other means; or1798 (B) any tax. imposed by a State or political subdivi-sion thereof, if- . (i) except with respect to a tax (on Internet access) that was generally imposed and actually . enforced prior to October 1, 1998, the sole ability to access a site on a re-mote seller's out-of--State computer server is considered a factor in determining a remote seller's tax collection obli-gation; or (ii) a provider of Internet access service or online services is deemed to be the agent of a remote seller for de-termining tax collection obligations solely as a result of- (I) the display of a remote seller's information or con-tent on the out-of--State computer server of a provider of Internet access service or online services; or (II) the processing of orders through the out-of--State computer server of a provider of Internet access service or online services. (3) ELECTRONIC COMMERCE.-The term "electronic commerce" means any transaction conducted over the Intetet or through Internet access, comprising the sale, lease, license, offer, or delivery of property, goods, services, or information, whether or not for consideration, and in-cludes the provision of Internet access. 7 of 1 1 10/25/2001 F0:54 A,. Internet Tax Freedom Law httpJ/www,fmdom.gov/library/itfa/fi (4) INTERNET.-The term "Internet" means collectively the myriad of computer and telecommunications fa-1799 cilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control ProtocoU Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire or radio. (5) INTERNET ACCESS.-The term "Internet access" means a service that enables users to access content, infor-mation, electronic mail, or other services offered over the Internet, and may also .include access to proprietary con-tent; information, and other services as part of a package of services offered to users. Such term does not include tele-communications services. (6) MULTIPLE TAX.- (A} IN GENERAL.-The term "multiple tax" means any tax that is imposed by one State or political subdivi-sion thereof on the same or essentially the same electronic commerce that is also subject to another taz imposed by another State or political subdivision thereof (whether or not at the same rate or on the same basis), without a cred-it (for example, a resale exemption certificate) for taxes paid in other jurisdictions. (B) EXCEPTION.-Such term shall not include a sales or use tax imposed by a State and 1 or more political sub-divisions thereof on the same electronic commerce or a tax 1800 on persons engaged in electronic commerce which also may have been subject to a sales or use tax thereon. (C) SALES OR USE TAX.-For purposes of subpara-graph (B), 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 tangible 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.- (7) STATE.-The term "State" means any of the sev-eral States, the District of Columbia, or any common-wealth, territory, or possession of the United States. (8) TAX.- (A) IN GENERAL.-The term "tax" means- (i)-any charge imposed by any govern-mental entity for the purpose of generating revenues for governmental purposes, and is not a fee imposed for a specific privilege, service, or benefit conferred; or -s_ (ii) the imposition on a seller of an ob-ligation to collect and to remit to agovern-mental entity any sales or use tax imposed on a buyer by a governmental entity. (B) EXCEPTION.-Such term does not in-elude any franchise fee or similar fee imposed by1801 a State or local franchising authority, pursuant to section 622 or 653 of the Communications Act of 1934 (47 U.S.C. 542, 573), or any other fee related to obligations or telecommunications car-riers under the Communications Act of 1934 (47 U.S.C. 151 et seq.). (9) TELECOMMUNICATIONS SERVICE.-The term "telecommunications service" has the 8 of l l tor_sr_ooi ioaa f .lntemet Tax Freedom Law ~ - - _ . httpJ/www.freedom.gov/libraty/itfa/fi r meaning given such term in section 3(46) of the Communications Act of 1934 (47 U.S.C.. 153(46)) and includes commu-nications services (as defined in section 4251 of the Internal Revenue Code of 1986). (10) TAX ON INTERNET ACCESS.-The term "tax on Internet .access" means a tax on .Internet access, including the enforcement or application of any new or preexisting tax on the sale or use of Internet serv-ices unless such tax was generally imposed and actu-ally enforced prior to October I, 1998. TITLE XII-OTHER PROVISIONS SEC. 1201. DECLARATIO_ N THAT INTERNET SHOULD BE FREE OF NEW FEDERAL TA7iES. • It is the sense of Congress that no new Federal taxes similar. to the taxes described in section 1101(a) should be enacted with respect to the Internet and Internet access during the moratorium provided in such section.1802 SEC. 1202. NATIONAL TRADE ESTIMATE. Section 181 of the Trade Act of 1974 (19 U.S.C. 2241) is amended- (1) in subsection (a)(1 }- (A) in subparagraph (A)- (i) by striking- "and" at the end of clause (i); (ii) by inserting "and" at the end of clause (ii); and (iii) by inserting after clause (ii) the following new clause: "(iii) United States electronic com-merce, "; and {B) in subparagraph (C}- (i) by striking "and" at the end of clause (i); (ii) by inserting "and" at the end of clause (ii); .(iii) by insertingafter clause (ii) the following new clause: "(iii) the value of additional United States electronic commerce, "; and (iv) by inserting "or transacted with," after "or invested in"; (2) in subsection (a)(2)(E)-1803 (A) by striking "and" at-tfl~ end of clause (i); (B) by inserting "and" at the end of clause (ii); and (C) by inserting after clause (ii) the follow-ing new clause: "(iii) the value of electronic commerce transacted with,"; and (3) by adding at the end the following new sub-section: "(d) ELECTRONIC COMMERCE.-For purposes of this section, the term `electronic commerce' has the meaning given that term in section 1104(3) of the Internet Tax Freedom Act.". 9 of 1 1 10/ZS/?001 IU:54 A •' Internet Tax Freedorti Law -~ . httpJ/www.freedom.gov/librarylitfa/fin, . SEC. 1203. DECLARATION THAT.THE INTERNET SHOULD BE FREE OF FOREIGN TARIFFS, TRADE BARRIERS, AND OTHER RESTRICTIONS. (a) IN GENERAL.-It is the sense of Congress that the President should seek bilateral, regional, and multilateral agreements to remove barriers to global electronic com-merce through the World Trade Organization, the Organi-nation for Economic Cooperation and Development, the Trans-Atlantic Economic Partnership, the Asia Pacific Economic Cooperation forum, the Free Trade Area of the 1804 America, the North American Free Trade .Agreement, and other appropriate venues. (b) NEGOTIATING OBJECTIVES.-The negotiating ob jectives of the United States shall be=- (1) to assure that electronic commerce is free from- (A) tariff and nontariff barriers; (B) burdensome and discriminatory regula-tion and. standards; and (C) discriminatory taxation; and (2) to accelerate the growth of electronic com-merce by expanding market access. opportunities for- (A) the development of telecommunications infrastructure; (B) the procurement of telecommunications equipment; (C) :the provision of Internet access and tele-communications services; and (D) the exchange of goods, services, and digitalized information. (c) ELECTRONIC COMMERCE.-For purposes of this section, the term "electronic commerce" has the meaning given that term in section 1104(3). ..SEC. 1204. NO EXPANSION OF TAX AUTHORITY. Nothing in this title 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 enactment of this Act. SEC: 1205. PRESIERVATION OF AUTHORITY. Nothing in this title shall limit or otherwise affect the impleu~ptation of the Telecommunications Act of 1996 (Public Law 104-104) or the amendments made by such Act. SEC..1206. SEVERABILITY. If any provisions of this title, or any amendment made by this title, or the application of that provision to any person or circumstance, is held by a court of com-petent jurisdiction to violate any provision of the Constitu-tion of the United States, then the other provisions of that title, and the application of that provision to other persons and circumstances, shall not be affected. 10of11 10/25/2001 10:54 AM Internet Tax Freedom Law'--__.__..._ _ . _ _.____ _ ..~ , Front Pa~c g ~ Get Updates ~ F a r ~ N w Inf ( ar Freedom Works: Home Page of the Office of the House Majority Leader lofll http://w'~+'w.freedom.gov/library/itfa/final freedom works IO/25/2001 10:54 AM