Magazine article Government Finance Review

Congress Adjourns Second Session

Magazine article Government Finance Review

Congress Adjourns Second Session

Article excerpt

In order to complete work on several FY 2001 appropriations bills, the 106th Congress met for a rare lame-duck session after the November 2000 elections. During this brief session, compromises were negotiated on various key bills. However, in the end, many of these bills fell victim to both the rush to adjourn and partisan differences. Many of the issues on GFOA's legislative agenda were not addressed, but there were a few successes.

Revenue Issues

Taxation of Remote Sales. Numerous bills were introduced in the 106th Congress, the most draconian of which imposed a permanent moratorium on the collection of state and local taxes on Internet transactions (S.328--Bob Smith, S.1611--John McCain, H.R. 3252--John Kasich). S. 2028--Ron Wyden (author of the existing law) extends the current moratorium permanently. Several bills extend the moratorium five years (until 2006)--H.R. 4267 (Hyde), S. 2255 (McCain), and H.R. 3709. The minority views of the Advisory Commission on Electronic Commerce were introduced by John Conyers, H.R. 4660; this bill extends the current moratorium for two years, and grants states the authority to simplify their sales taxes and require remote sellers to collect and remit taxes.

H.R. 3709, which as introduced was a companion to Senator Wyden's bill, passed the House by a vote of 352-75 on May 10, 2000. It had been approved by the Judiciary Committee without any formal hearings and moved quickly to the floor. This legislation provided for a five-year extension of the moratorium and elimination of the grandfather clause. During floor debate there was a close vote on an amendment extending the moratorium only two years and preserving the grandfather clause, but it was defeated. The House did approve by a wide margin a nonbinding resolution (known as a Sense of the Congress resolution) encouraging states to work together to simplify sales and use tax systems and ease collections by remote sellers.

In the Senate, a markup of Senator McCain's legislation by the Commerce Committee was cancelled numerous times because there were not enough votes for committee approval. Senator Dorgan and a group of bipartisan senators, working with state and local groups and representatives of the retail industry, crafted a compromise bill, introduced in June 2000. This bill, S. 2775, blended an extension of the existing Internet tax moratorium with state sales tax simplification and collection authority for online transactions. In the end, despite negotiations between Senators McCain and Dorgan to find common ground, no-consensus was reached and the issue was deferred to the next Congress.

Digital Signatures. Congress enacted the Electronic Signatures in Global and National Commerce Act, Public Law 106-229. This law extends the same legal weight now granted contracts signed with pen and ink to most transactions sealed with an "electronic signature"--a secure code transmitted electronically. It enables consumers to sign legally enforceable contracts for health insurance, bank loans, mortgages, and brokerage accounts over the Internet, provided consent is granted for all electronic transactions. Certain vital notices and contracts will still require a signature on paper, including wills and adoptions, utility cancellations, mortgage foreclosures, termination of health insurance, and court orders. …

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