Ron Wyden

Mr. WYDEN

Mr. WYDEN. I am sorry. The fact is the grandfathering provision and the moratorium really are linked, and I think that the Senator has been very fair to both sides with respect to this discussion, and to the extent that there are greater protections for grandfathering and more jurisdiction protected that obviously affects the discussion about the length of the moratorium. I think the Senator struck a fair balance, and I think it would be helpful if the Senator could take the Senate through those discussions a bit. I thank the Senator for yielding me some time.

Mr. WYDEN. I thank the chairman for all of his patience. I think it would be helpful, and perhaps the chairman would lay it out, to know that through this discussion there has been an effort to link the grandfather provision effort to make sure that States and localities that already have laws on the books are protected and to link that to the moratorium so that there would be an effort to be fair to both sides. I think the Senator has been very fair, and perhaps the Senator could elaborate a little bit on some of the challenges with respect to that grandfather debate.

Mr. WYDEN. Will the chairman yield?

Mr. WYDEN. Madam President, let me try to describe briefly for the Senate where we are with respect to the important issue coming up now on the length of the moratorium. As Chairman McCain and my colleague, Senator Dorgan, noted, the two issues we have been trying to deal with, the question of grandfathering in existing States and localities and the length of the moratorium are linked, and we think we have a fair process in place now for resolving the two important issues. I would like to tell my colleagues why I think it is important that we go with the McCain amendment on the length of the moratorium. The legislation, when I introduced it in March of 1997, did not specify how long the moratorium should last. When we considered it in the Senate Commerce Committee, after a very lengthy debate and, in effect, taking a break for 5 or 6 months after the hearings were held to try to work with Senators on both sides of the aisle, the Senate Commerce Committee voted out legislation that set in place a 6-year moratorium. As Senators know, the Finance Committee then went forward with its legislation and imposed a 2-year moratorium. In a sense, this moratorium isn't even the most accurate way to describe it because even during this period Internet transactions were treated exactly like any other transaction. We have heard discussion of how, in some way, the legislation would create some sort of special tax haven for the Internet, and that is simply not the case. Internet transactions would be treated just like any other. The reason the McCain amendment with respect to the length of the moratorium is important is not just because it is a compromise--4 years--between the Commerce Committee bill and the Finance Committee bill, but I think it is going to take that long in order to deal with these issues in a thoughtful way. They are complicated questions. It is very clear that if, for example, someone orders fruit from Harry and David's in Medford, OR, uses America Online in Virginia to make the order, pays for it with a bank card in California, and ships it to a cousin in Boston, this transaction could affect scores and scores of local jurisdictions, as well as a number of States. So we do want sufficient time to sort out these issues. Under the amendment that will be first offered by Senator McCain and myself, there would be a two-step process. First, the commission studies the issues and makes its recommendations to the Congress. Second, the recommendation must be implemented. Our concern is that a number of State legislatures do not meet every year; mine is one. You are going to need the McCain-Wyden amendment with respect to the moratorium in order to make sure that you have sufficient time for both the study of these issues and recommendations to the Congress, as well as an adequate amount of time for legislative bodies to consider them. So we felt that the amendment we were offering not only was a fair compromise between what was passed in the Senate Commerce Committee overwhelmingly and what was passed in the Senate Finance Committee, but in terms of the actual logistics of State legislative sessions, we believe the amendment that we will be offering with respect to the length of the moratorium is a critical one. The fact of the matter is, when you have in the vicinity of 30,000 taxing jurisdictions--and that is the number in our country--you have the prospect of different taxing jurisdictions in States and localities that all see the Internet as the golden goose; you have the real prospect that policies could be adopted that would cause great damage to the Internet's development and cause that golden goose to lay far fewer eggs. What we are trying to do in this legislation is to restore a balance with respect to the moratorium. We think it is a fair compromise between what the two committees dealt with here in the U.S. Senate, and at the same time we think it is an approach that will give adequate time for the States and localities to deal with the recommendations that are made while making sure that businesses aren't confused and, in a number of instances, paralyzed by discriminatory and multiple taxation about which they are already expressing concerns. I think we have made a considerable amount of headway. As I have said in a couple of instances when I came to the floor, if you look at the legislation that the Presiding Officer heard discussed in the Commerce Committee early in 1997 and the legislation that is before the Senate now, it is clear that there have been many, many changes, over 30. Those are changes that were made specifically to try to deal with the legitimate concerns of States and localities that are concerned about their revenue prospects with respect to the digital economy. We have tried to be fair. We had a number of votes on the floor of the Senate. There were several which I thought would have done great damage to the philosophy of what we are trying to do in this legislation. There were others raised with respect to ensuring the fair analysis of a variety of issues and participation on the commission where, clearly, Senators have tried very hard to work together. The issue that is coming up now with respect to the length of the moratorium is critical. When I introduced this legislation last year, there was no end date on the moratorium. The reason there was not is that it was our view that if ever there was something that ought to be treated as interstate commerce, it was the Internet. The Internet is global; it knows no boundaries. It is not something that ought to be balkanized in the 21st century into kind of a toll-riddled freeway where it will be very hard to tap the potential of the Internet. We should make no mistake about it. The great potential for the Internet is for those individuals, such as those in rural America and inner cities, senior citizens, handicapped individuals, many of them operating home-based businesses, who with sensible governmental policies will be able to, in my view, make a very decent living in the global economy. But the prerequisite of having those kinds of opportunities will be policies that allow the Internet to flourish. Those policies should neither be discriminatory against the Internet nor should they be preferential. I have heard various Senators say over the last few days that in some way this legislation would ensure preferential treatment for the Internet. It would do nothing of the sort. It would say very specifically that Internet sales ought to be treated just like everything else. If you pay a specific tax by buying the goods in a jurisdiction in the traditional way, by walking into a retail store, under this legislation, even with the moratorium, you pay exactly the same tax if you order those goods over the Internet--exactly the same tax. There is nothing preferential, nothing discriminatory. In a little bit we will have that first vote on the amendment that Chairman McCain and I offered together with respect to the length of the moratorium. It will ensure that we have enough time to study the various issues with respect to electronic commerce and make recommendations, and it will give adequate time to have those recommendations implemented by the localities and the States. There are a number of States that do not meet every year, for example, with their legislatures. They would not have adequate time under the shorter version of the moratorium. Madam President, and colleagues, we will have those votes before too long. I thank the various Senators who have weighed in with myself and Chairman McCain, both today and over the last few days. This has been a good debate. And it is only the beginning of our discussions on the ground rules for the digital economy. This presents a whole new set of questions for the U.S. Senate. When we look at traditional commerce, even with the Senate Commerce Committee of 40 or 50 years ago, we were talking about moving goods from point A to point B. There was a role for traditional business. There was a role for labor unions and various other key economic sectors such as the transportation sector. That has changed now in many respects, because information--in effect, goods and services--can move on the Internet in a flash of light. So we need sensible policies. I urge my colleagues to support that first amendment that Chairman McCain and I are offering with respect to the length of the moratorium. It will ensure that States and localities have an adequate amount of time to act after the recommendations of the commission to go forward. It is a true compromise. The Senate Commerce Committee passed legislation that called for a moratorium of 6 years after my original bill with Chairman McCain, which had no end date at all. The Senate Finance Committee bill was 2 years. We are going forward with 4. That would give the States an opportunity to act in a thoughtful way. I hope on that first vote the Senate will support the McCain-Wyden amendment with respect to the length of the moratorium. Madam President, I yield the floor. Mr. McCAIN addressed the Chair.

Mr. WYDEN. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. WYDEN

Mr. WYDEN. Will the Senator yield?

Mr. WYDEN. I want to say that I think the Senator has made an especially effective approach and tell him that hardware account he gave is essentially what this legislation is all about. There has been discussion about who benefits here, huge corporations and the like. The people who benefit here are the 100,000 home-based businesses in my State, the hardware store that the Senator from Connecticut is talking about. The reason why that is the case is that the Internet is a great equalizer for those small businesses. The small businesses now that we are seeing in the State of the Senator from Connecticut and rural Oregon are having great difficulty today competing against the Wal- Marts of the world. They do not have huge advertising budgets like Wal- Mart. They don't have batteries of lawyers and accountants. These are small, entrepreneurial operations that now look at the Internet as a tool that can trampoline them into extraordinary economic opportunities they have never had. Without this legislation and the good work that has been done by the Senator from Connecticut and the Senator from New Hampshire, if you are a small, home-based business in Oregon or Connecticut, you may well face a good chunk of the thousands of taxing jurisdictions in our country looking at your business as a cash cow. One of our colleagues said the threat here is the World Wide Web would become the ``World Wide Wallet'' if that kind of approach went forward. So what the Senator was talking about with respect to that hardware store account is why I introduced this legislation early in 1997. That is the very kind of operation that I think we ought to be looking to grow in the 21st century. I thank the Senator for yielding me this time. I heard his account of the hardware store from the Cloakroom, and I think some have said--in fact, I heard it again today--that this was about Amazon.com or someone like that. Those people are not going to be in need of this kind of approach. This is going to benefit the small entrepreneurs, the home- based business, the kind of person the Senator from Connecticut is talking about. I thank him for yielding me this time.

Mr. WYDEN. Will the Senator yield?

Mr. WYDEN. Reclaiming my time, as I said, the debate here is over, Do you want to focus on the subject of this bill, which is electronic commerce--that is what the legislation does; that is what the Gregg amendment seeks to do--or are we going to go back and study in this legislation essentially yesterday's economy? We believe that if you put the focus on electronic commerce--that is what the Gregg amendment does--we are going to be able to deal with the digital economic issues; and we may well, in fact, come up with some ideas and some innovative approaches that may well resolve the mail- order and catalog question as well. My concern, and the concern of the Senator from New Hampshire, is that essentially this is going to change the focus of this legislation to put it on the mail-order and catalog issues. There are Members of the U.S. Senate who feel that mail-order and catalog sales are insufficiently taxed. I am not one of them. I am one who believes that we all ought to work together, on a bipartisan basis, to deal with tomorrow's set of economic concerns, which involves the digital economy. I tell the Senator from Arkansas that as the original sponsor of this legislation, I have made more than 30 separate changes to this legislation in an effort to accommodate what I think are valid concerns which come from States and municipalities and others who are advocating the viewpoint of the Senator from Arkansas. But what I am not willing to support is essentially changing the focus of this legislation. If we do that, I believe that the 100,000 home-based businesses in my State, and the hundreds of thousands across this country, are not going to see their concerns addressed; I think we will not be taking advantage of the opportunity to look at the Internet issues objectively, and we will lose that focus and take it off into another area which is, in my view, likely to not produce consensus with respect to the mail-order or catalog issue, nor make the progress we need to with respect to the Internet. Mr. President, I yield back the time. Several Senators addressed the Chair.

Mr. WYDEN. In just 1 minute I will be happy to yield. It is quite clear, at page 21 and page 22, that there will be ``a thorough study'' of the issues and that the commission will look at ``comparable interstate or international sales activities.'' The question, Mr. President, and colleagues, is whether or not we are going to focus on yesterday's concerns, which are the mail-order or catalog issues--and they are important ones--or are we going to look at trying to come up with some sensible policies with respect to tomorrow's issues which essentially involve the ground rules for the digital economy. Somehow, those that want to look at mail-order and catalog sales feel that they can resolve all of their concerns on this legislation. We feel otherwise. The reason that it is so important to have the Gregg language is that it does put the focus on electronic commerce. I and others believe that if we do look at electronic commerce, and look at it thoughtfully, that it may, in fact, come up with some answers to these other issues--mail-order and catalog questions, which are important--but if we change the focus of this bill, which is essentially what the Senator from Arkansas wants to do, I believe what is going to happen is, A, we will not get any sensible ground rules for electronic commerce, nor will we deal with the issues with respect to mail orders. The fact of the matter is that Main Street America overwhelmingly has endorsed this bill. We have entered into the Record the list of the groups that are for it. And the reason that Main Street has endorsed this legislation is that if you are a small business on a main street in rural Arkansas or rural Oregon, or any other part of the country that is essentially rural, right now you are having a lot of difficulty competing against the Wal-Marts and the economic giants in our country. The Internet is a great equalizer. By having a web page, by having the ability to do business on line, that Main Street business in rural Oregon or rural America, for the first time, has the ability, in an inexpensive way, to market and look at lucrative markets around the world. Picture, if we will, what will happen to a home-based business in Wyoming or Arkansas or Oregon if we do nothing. There are 100,000 of these home-based businesses in my State alone. They are the fastest growing part of our economy, and if we do not come up with some uniform tax treatment for these home-based businesses, what is going to happen is they will be subject to scores of different taxes all over America. How is a home-based business in the State of Oregon or the State of Arkansas going to go out and hire a battery of accountants and lawyers and experts to help them sort this out? They are not going to be able to do it. And that is why, when we had the hearings on this legislation in the Senate Commerce Committee, we heard from a small Tennessee business that tried to operate through this thicket of different kinds of State and local rules and ended up going out of business. These home-based businesses are simply not going to be able to hire the battery of experts and accountants and lawyers that some of those who have opposed this legislation are going to mandate on these small businesses. So I hope that we can stick to the issue in front of us. That would mean going forward with the Gregg amendment and rejecting the amendment of the Senator from Arkansas. The Senator from Arkansas did ask me to yield, and I am happy to do so.

Mr. WYDEN. Thank you, Mr. President. Mr. President, I urge adoption of the Gregg amendment and the rejection of the Hutchinson amendment. First, it is quite clear that this legislation is going to, in fact, study all of the questions related to the subject this bill deals with thoroughly. Let me just read into the Record exactly what it says with respect to what will be studied. It says: The Commission shall conduct a thorough study of Federal, State and local, and international taxation and tariff treatment of transactions using the Internet and Internet access and other comparable interstate or international sales activities. So it is right there at pages 21 and 22.

Mr. WYDEN

Mr. WYDEN. Mr. President, I strongly urge my colleagues to oppose this amendment. I think we are making substantial progress on this legislation. I believe that in a few minutes Senator McCain and I are going to accept something like seven or eight amendments that have been offered in an effort to try to bring the parties together, and I would like to see us continue to work in this spirit. Mr. President, and colleagues, I introduced the Internet Tax Freedom Act in March of 1997. Since then, this measure has been one of the most hotly debated measures in this Congress--debated in both the Senate and the House of Representatives. Through the course of this year and a half discussion, never once has this idea been suggested--not in the House nor in the Senate. And the fact of the matter is we are still having important negotiations in order to get at the issue of how long the moratorium ought to be. We are anxious to involve the Senator from Florida in that effort. It would seem to me that our job--just as we have tried to do with the seven or eight amendments which Chairman McCain and I are going to accept in a few minutes--is to continue to do our work in good faith. The Senator from Florida knows that I have gone to considerable lengths to be supportive of his position with respect to what would be studied by the commission in an effort to be responsive to his concerns. I would like to see us continue those discussions, both with respect to what the commission will study and how long the moratorium ought to be. When we arrive at that point, I and others believe that the commission will do a thoughtful and responsible job. We think they are going to work in good faith. If at any point they indicate that they are unwilling to pursue their duties in that kind of fashion, the U.S. Senate can get back at it. I think it is important that the Senate reject this amendment and let us continue in the kind of spirit that Chairman McCain and I have shown with respect to the seven or eight amendments that are going to come up very shortly that we have agreed to accept, and let us get this bill on the President's desk. The President of the United States is for this legislation, the majority leader of this body, Trent Lott, is for this legislation, and the minority leader, Tom Daschle, has said that he wants to see this bill enacted. I think it is important that we reject this amendment and move forward in good faith to work out the remaining issues. Mr. President, I yield the floor.

Mr. WYDEN. Thank you, Mr. President. I strongly oppose this amendment. This amendment specifically singles out those who sell goods over the Internet for discrimination. It applies to one class of people and that is those who sell goods on the Internet. The amendment would impose on those sellers of goods on the Internet a new requirement that would not be imposed on someone who sells goods over the phone or someone who mails the goods when they get a check. Now, let's picture the kind of person who is going to be hurt by this amendment. My State, the State of the Presiding Officer of the Senate, has 100,000 home-based businesses. These are some of the most exciting businesses in the country coming up with new products. They are small. They are entrepreneurial. If this amendment passes, those 100,000 home- based businesses in Oregon--and there are thousands and thousands of other home-based businesses across the country in States that we all represent--they, and only they, will be subject to this new requirement. This amendment seeks to do what the Internet tax freedom bill seeks to prevent. Our legislation is about technological neutrality. We should treat the Internet like we treat everything else. It shouldn't get a preference. It shouldn't be discriminated against. But if you read section (a) of this amendment, you will see that it applies requirements to one class of people, and one class of people only. Those are individuals who sell goods over the Internet. This is discriminatory. This does what our legislation seeks to prevent. Those who vote for the amendment, in my view, in this Senator's view, are fostering the kind of policy that is going to lead to selective and discriminatory activity against those who sell goods through the World Wide Web. I yield back my time, Mr. President.

Mr. WYDEN

Mr. WYDEN. Mr. President, thank you very much. Mr. President, let me take just a few minutes to talk about where we are with respect to the Internet tax bill and also to express my thanks to--who may have left the floor--but to express my thanks to Senator Bumpers. Senator Bumpers could have filibustered this legislation. He could have insisted on his rights as a Senator to speak at length on this past amendment that he feels very strongly about, as do a number of Senators, and I want to thank him for not doing that. He has been exceptionally kind to me. He knows that I feel strongly about this legislation. And he has been very constructive in working with the bipartisan group pursuing the legislation. Let me also just state, as I did, it is our intent--it is clearly spelled out in the legislation--that if a firm or a home-based business--I have thousands of them in Oregon; I know our colleagues do as well--if they are liable for a tax today, they are going to be liable under this legislation if that sale is conducted on the Internet. It is just that simple. So what it comes down to, is if you have a question from a mayor or a Governor who asks you about this subject at home--any Senator who is asked about this issue should simply say that this legislation does no harm to the States or to the localities, and it simply treats Internet commerce like any other kind of commerce. That was something that I, as the bill's sponsor, felt very strongly about. With respect to the legislation, I know other Senators wish to speak as well, and Senator Dorgan wants to address the Internet issue this afternoon as well. I am very hopeful we will be able to resolve the one remaining issue, and that is the question of the commission and what they are going to be looking at. The Senator from North Dakota, Senator Dorgan, has been very helpful on this matter in an effort to try to get an agreement--Senator Graham has as well. I am very hopeful that we will be able to, now that we have addressed the major amendment, the Bumpers amendment, I hope that we will be able to get an agreement on exactly the duties of the commission and be able to go forward with the managers' amendment. Senator McCain and myself and others have been anxious to try to address concerns that Senators have had with respect to the length of the moratorium, other issues surrounding the managers' amendment. I think we can do that. So, again, let me say that I very much appreciate, especially on a Friday with Senators having a busy schedule, the opportunity to discuss this issue. We made considerable progress. I especially thank Senator Bumpers who could have spoken at length, filibustered this legislation, and he has been especially kind to me. I express my appreciation to him. I see the Senator from North Dakota who has worked many, many hours in an effort to try to get this issue to the floor, along with me and others, and I express my appreciation to him and say that I especially appreciate his effort to bring the parties together with respect to the commission and the issues that they will be pursuing there in an effort to make sure that as we look to the digital economy in the 21st century that we have a chance to examine those questions. Does the Senator from North Dakota wish to pursue a question at this time?

Mr. WYDEN. Would that be possible--I would like to accommodate the Senator from North Dakota--if I were to yield the floor at this point, given the fact that he had asked earlier for time to give his opening statement, that he be recognized if I yielded the floor?

Mr. WYDEN. I thought the Senator from North Dakota had a question he wanted to postulate. I do want to address the concern that he has on the Internet tax bill. He has been very fair in working with the sponsors on this matter.

Mr. WYDEN. I will say, having made 30 changes since we left the Commerce Committee, that this Senator, who is a good friend of the Senator from North Dakota, has a very high batting average--since we have been talking about baseball--in terms of agreeing with the Senator from North Dakota. We are going to continue to work with him, as he knows.

Mr. WYDEN. I thank the Senator. He has correctly laid out the various time periods. Let me say again, the Senator from North Dakota knows both the chairman of the Commerce Committee and I are still wanting to work with those who feel that 5 years is too long a period. We are anxious to try to get an agreement and, hopefully, this can all be resolved as part of a managers' amendment. I think the concern of certainly myself and others is that 2 years is too short because it is going to take some time to work through a subject as complicated as this, and then there is going to need to be a period where the States have the chance to address it. I think we can come up with a period that is acceptable. Of course, the moratorium, such as it is, applies only to Internet access taxes. It does not apply to other spheres of economic activity. And with respect to other spheres of economic activity, again, Internet will be treated just like anything else. If a State and a locality has other means of raising revenue, we want to make it clear that, with respect to the Internet, the business conducted there will be treated like everything else. So let me yield back to the Senator from North Dakota at this time, with an assurance that we are going to continue to try to negotiate on this point an acceptable time period for all parties. We have discussed 4 years, and we have discussed a variety of options. We are going to continue to do that. I want it understood that both Senator McCain and I feel that the Senator from North Dakota is trying very hard to be helpful here, and we are going to continue to move forward in working with him to get this resolved.

Mr. WYDEN. I thank the Senator from North Dakota for his thoughtful comments, as well. I think there has been a considerable effort in the last few months to address this in a bipartisan way. I think the Senator from North Dakota is exactly right; what we want is technological neutrality. We don't want the Internet to get a preference. We don't want the Internet to be discriminated against. We want to be able to say, as we look to the brand new economy, the digital economy, that we don't make some of the mistakes that we made as we tried to sort out some of the issues, for example, with respect to mail order. I think the Senator from North Dakota has been very persistent in terms of trying to work with all the parties in making sure that the commission studies these issues fairly. That is certainly what I want. I was very interested in my friend's comments with respect to his town in North Dakota and how the Internet would allow, for example, somebody to log on in North Dakota and get goods from a sporting goods store far away and have them shipped to a small town in North Dakota. That is clearly one of the benefits. But what we also hope to do with the Internet Tax Freedom Act is make it possible to grow small businesses in North Dakota that will be able to furnish some of those goods and services. My friend from North Dakota has many small communities in North Dakota, as I do in Oregon. I want to make sure that Burns and Wagontire and other small towns in Oregon can compete. My view is that sensible Internet policies will make those small businesses more competitive than they are today. The reason that Main Street businesses support the Internet Tax Freedom Act, the bill that is before the Senate today, is that Main Street businesses, those small stores, recognize right now they are having a lot of difficulty competing with the Wal-Mart giants and certainly major corporations that are located overseas. And once you make geography irrelevant, which the Internet does, once you get a fair tax policy for a home-based business in Oregon or North Dakota, rather than those businesses facing discriminatory taxes, as we have been addressing today, I think we will grow more small businesses in North Dakota and Oregon on Main Street, and that is the hope of the sponsors of this legislation. So let me yield back to the Senator from North Dakota, as this Senator has to head off for a 7 or 8-hour flight home. I want to again express my thanks to the Senator from North Dakota. He and his staff have spent many, many hours toiling over what is arcane language, at best, with respect to the digital economy and these new issues. I think the Senator from North Dakota is right in saying that this is just the beginning of this whole discussion. We had another initiative yesterday that was very sensible--Senator Bryan's initiative dealing with on-line privacy as it relates to children. So we are just at the beginning of these issues. I hope to be sitting next to the Senator from North Dakota on the Communications Subcommittee as we tackle these questions. I think we have made considerable progress. I specifically thank Senator Graham, Senator Bumpers, as well as the Senator from North Dakota. They have had strong views on this matter, and they know this bill has been important to me. They have all been very gracious in helping to move it along. Also, Senator McCain will be back on the floor in a few moments. We simply could not have been here without the support of Senator McCain and his staff. I am looking forward to seeing this legislation go to the President before we wrap up. I thank the Senator from North Dakota.

Mr. WYDEN. Mr. President, I yield the floor. Several Senators addressed the Chair.

Mr. WYDEN. Parliamentary inquiry, Mr. President.

Mr. WYDEN

Mr. WYDEN. Thank you, Mr. President. Amendment No. 3677 Mr. President, Senator McCain and I have 5 minutes to briefly respond to Senator Bumpers' proposal. I will use a couple of those minutes of time. First, let me say that Senator Bumpers is such an extraordinary person and such a wonderful orator that anyone who comes to the floor to speak after him is sort of in the position of being Tugboat Annie after the Queen Mary has sailed off. I would like to try to briefly respond to Senator Bumpers' proposal, and to urge my colleagues to strongly oppose it. First, let us be clear about what this legislation says with respect to those mayors and Governors about whom Senator Bumpers is concerned. This legislation says that if you are liable for a tax today, you are going to be liable if electronic commerce goes forward. You are going to be liable for a tax on an Internet sale just as if it was a traditional sale taking place today. What the debate is all about is that some States believe that because they cannot collect on mail order today, they want to go out and collect taxes with respect to the Internet because they see the Internet as the cash cow. Senator McCain and I and others don't feel that the problem in our country is that mail-order sales aren't taxed enough. We think that what we ought to do as we look to the next century and the new economy--the digital economy--is to make sure that we have technological neutrality. This vote that we will be having in just a few moments on the Bumpers amendment is essentially the first substantive recorded vote that we will have had with respect to the Internet. I urge my colleagues to oppose this. I will oppose it strongly, because I don't think the problem in our country is that mail-order sales aren't taxed enough. I think what we ought to do is go forward with this legislation as it stands now to ensure technological neutrality. I and others would be happy to work with Senator Dorgan and others to address this mail-order problem. But at the end of the day, let's not make the mistake with the Internet that was made with mail order years ago and create the same kind of fight and brawl. Mr. President, I yield the floor.

Mr. WYDEN

Mr. WYDEN. Mr. President, first let me thank the chairman of the full committee, Senator McCain. I introduced S. 442 in March of 1997. Chairman McCain and his staff have worked almost nonstop with me since that time to try to put together a bipartisan bill. I thank Chairman McCain for all of these efforts. I share his views. We are anxious to get to the Bumpers amendment this morning. I have a few brief comments and, hopefully, we will be able to move to that expeditiously. If ever there was an issue that called out for treatment as interstate commerce, it is the Internet. The Internet, as we all know, knows no boundaries--not Federal boundaries, not State boundaries, in effect not even global boundaries. But what we have tried to do in our efforts over the last few months, and we have done it through more than 30 separate changes, is try to be fair to all parties--the States that are trying to look thoughtfully at the ground rules for the new economy and small businesses who overwhelmingly have endorsed this legislation. For the small businesses, the Internet is a chance to compete with the Wal-Marts and other big guys because geography becomes irrelevant. So, small businesses have supported it. I think that is why we have fashioned a bill with so much bipartisan support. The essence of this bill is that in the 21st century the new digital economy should be built on the principle of technological neutrality. The Internet should get no preference, nor should the Internet be the target of selective discrimination. Unfortunately, around the country we have seen instances, for example, where if you purchase a newspaper the traditional way, what is called snail mail, it is sent to you in your home and you pay no tax. But if you subscribe to the same newspaper via the Internet, you pay a hefty tax as a result. Depending on what State you are in, electronic commerce may be taxed as a telecommunications service, computer service, information service, or some combination, and there are different rates around the country. My concern has long been that if a significant number of the 30,000 taxing jurisdictions in America all decide to take a bite out of the Internet, or if we have 50 States going at it individually, the Internet is going to look like Dodge City before the marshals showed up. Chairman McCain was very right, that Internet growth is going to be enormous. There is a fair amount of Internet commerce going on today, but it is going to grow dramatically in the years ahead. That is why in our legislation we seek to come up with some ground rules for the new economy, and to do it before we have to react to critical problems. I submit the greatest beneficiaries of this legislation are not the affluent and the powerful. The affluent and the powerful have lots of tax lawyers and specialists who, if they run up against a crazy quilt of taxes on the Internet, they are not going to have any problem using all of their legions of tax specialists to deal with that kind of situation. The people who are really going to benefit from this legislation are folks like home-based businesses, one of the fastest growing sectors of our economy. My home State of Oregon has more than 100,000 home-based businesses, and in meeting with them, many of them have said that electronic commerce is the key to their survival. For rural communities and at-home parents and disabled individuals, the online world is a gateway to economic opportunity. If somebody in a rural community has a home-based business, for example, selling fruit or jam or something of this nature, I cannot believe that there is a single Member of the U.S. Senate who would want to subject that kind of person to a score of different taxes. I don't think there is a Senator who would want to do that. That is why we have this legislation before the Senate today, to come up with a set of ground rules. Mr. President, here is the kind of example we are going to be talking about: If the present Senator in the chair wants to send a gift basket from Harry and David's in Medford, OR, to his cousin, say, in Florida, paying for it with a bank card in New York, using America Online in Virginia, how many jurisdictions would have the opportunity to impose a tax on that kind of transaction? There really are no ground rules for that sort of thing today, and if there were to be a hodgepodge of large, new taxes on electronic commerce, it would be especially punitive on those folks in rural States, like Colorado and Oregon. That is one of the reasons that I and Senator McCain and others who have worked on this legislation have sought to bring this to the floor expeditiously. I would like to take a minute to explain exactly what is in the bill and what is before the Senate. First, the legislation is not going to preempt existing State and local taxes as long as they are technologically neutral. What that means is, if the authority is there for someone to pay a 5-percent sales tax when they buy a sweater in a particular jurisdiction, under the Internet tax freedom proposal, they will pay exactly the same kind of tax if they order it on the Internet. States that impose and enforce taxes on Internet access in place today are going to be able to keep them. None of the States that tax Internet access today actually has a law on the books that expressly authorizes the taxation of Internet access, but as we heard in the hearings before the Commerce Committee, there are a variety of problems already cropping up as a result of administrative rulings and reinterpretations of existing law. In fact, there is one major firm, Vertex, which has tried to sort through the status at the State level of how the Internet is being taxed. In a number of States, they basically said that they couldn't give a clear answer, but if anybody was interested in doing a business deal, a deal involving electronic commerce that touched on that particular State, they would be wise to get a consultation. The legislation will not allow any State to attempt to impose or assess or attempt to collect a tax on Internet access after October 1, 1998, unless it already had done that with a tax in effect. It is very clear that we are trying to be sensitive to the laws in place and the concerns of the States, but at the same time making sure that there is not going to be an opportunity for discriminatory taxes on electronic commerce. In effect, what this legislation does is it ensures a timeout so that the commission of experts called for in the legislation can study these complicated questions and make sound policy recommendations to the Congress. But during that time, we take steps that we believe will be critically important to the development of electronic commerce as it relates to the smallest concerns in America. For example, the legislation assures that a web site is treated exactly like a mail- order catalog for purposes of interstate sales, so the taxing jurisdiction cannot attempt to impose a tax on a web site with respect to an out-of-State computer server. The fact is, the online world is racing past outdated policies. The ground rules that we seek to establish here are just the beginning of what I think is going to be needed for the digital economy. We have begun to debate in the Commerce Committee a variety of other issues. Yesterday, an important bill of Senator Bryan's was passed dealing with online privacy concerns as they relate to children. We may hear more about that before the end of the session, but I think that with this legislation we will begin to get the common definitions, the more clearly defined principles and standards, that are going to be essential for Internet commerce to go forward. Recently, I was home and met with some small businesses, and one of them said that he was very excited about the work that we were doing on this legislation. He said: ``Just understand that I am not going to be able to grow my Internet business if there are 30,000 taxing jurisdictions all with their hands in our pocket.'' The American taxpayers made it clear of late how they regard the IRS. If we were to have thousands of small jurisdictions collecting Internet taxes, I think that the concern we would have with respect to the IRS would be multiplied many times over at the thought of thousands of mini-IRS-taxing authorities collecting Internet taxes. I see that Senator Bumpers has arrived. I want to say, as Senator Bumpers comes to the floor and prepares his amendment, that I have agreed with him on a great many concerns over the years. I have agreed with Senator Bumpers about Social Security and the many times that he has led this body to take on spending boondoggles, environmental concerns, and the like. We don't happen to agree on this issue. I think it would be a mistake to let each State have its own sales tax arrangement for the Internet. It would certainly jack up taxes dramatically on the 100,000 home-based businesses in my State and the thousands of others across the country. I do think that if we have the States going off in their own directions, we do run the real risk of having the Internet look like Dodge City before the marshals showed up. I will conclude by way of saying that Senator Bumpers has worked very closely with this Senator, knowing that it is particularly important to me. We have gotten agreement on a number of key questions, and that was critical to getting the legislation to the floor. I want the Senator to know that he is going to be somebody whom this Senator will miss very, very much next year when I cannot look over and see Senator Bumpers and get his counsel on everything from Social Security to spending boondoggles. I thank him, because he has been aware that this legislation has been a priority of mine. I know he has strong feelings about it, and he was gracious enough to let it come forward and let us get these matters resolved. I express my appreciation to Senator Bumpers. Mr. President, I yield the floor. Mr. DORGAN addressed the Chair.

Mr. WYDEN

Mr. WYDEN. Mr. President, in November 1996, there was a tragic accident off the coast of California that claimed the lives of 10 out of 11 airmen, the crew of an Air Force Reserve C-130 aircraft out of Portland. All of these crewmen were from my home state of Oregon. This was a devastating loss for all of us, but most of all for the families of those airmen who lost their lives. After any tragedy like this, the first question on everyone's minds is ``why?'' Why were my loved ones taken from me? This is what the families of these airmen wanted to know, but no one would give them a straight answer. After many, many months of frustration, these families came to me and my colleague from Oregon, Senator Smith, to get the Air Force to tell us exactly what happened. As a result of working with these families, with the Air Force, and with the committee staff, and with Senator Levin in particular, we were able to craft some language that is now included in the Defense Authorization Conference Report that we are considering today. This language takes a two pronged approach to dealing with the pressing issues the families have raised: improving crash investigations, and eliminating the secrecy in which these investigations are shrouded. Specifically, the language directs the Defense Department to review the way it conducts aviation accident investigations so that they are conducted in as thorough and objective a manner as possible, including making sure crash investigators receive the best training, and ensuring that the military department coordinate and share information on fleet safety. The bill also urges the Pentagon to seek the advice of the National Transportation Safety Board in improving investigation procedures, and I intend to make sure their valuable input is part of their review. Secrecy has long been the hallmark of these investigations and has kept loved ones in the dark about what happened and why. We have worked to reduce the secrecy involved in the investigations of tragedies, and this legislation takes a solid step forward in providing families and the public with better information. That's why this language also requires the Department of Defense to issue regulations to provide to family members periodic reports on the progress of investigations. I also spoke with Secretary Cohen about this recently, and he has pledged to make a solid effort to make sure families are kept informed of the progress of investigations. It's important that we eliminate secrecy from these proceedings. The last thing we should do is add to these terrible tragedies by keeping the families in the dark about the status of these investigations. From day to day, from week to week, from month to month, these families had to cope with not only the incredible pain of losing a loved one, but with the incredible frustration of not knowing the status of the investigation into their deaths. This new language seeks to put an end to this type of treatment. We owe it to the men and women who give their lives for their country. tritium provision

Mr. WYDEN

Mr. WYDEN. I would like to engage in a colloquy with the gentleman from Arizona, the distinguished Chairman of the Commerce Committee, concerning provisions included in the FAA reauthorization bill to reform the Death on the High Seas Act.