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2006-2007 Policies for the Jurisdiction of the:
Communications, Technology and Interstate Commerce Committee

Communications, Technology and Interstate Commerce
Standing Committee Main Page
Staff Contact

Policies:

Cradle to Grave Electronics Management (Joint Policy with Environment and Natural Resources Committee)	The Internet and Electronic Commerce	Nexus in the New Economy: Ensuring a Level Playing Field for all Commerce (Joint policy with the Budget and Revenue Committee)	Network Neutrality (Action Resolution)
Spectrum Management	State Sovereignty To Use Tax Policy For Economic Growth (Action Resolution)	National Conference of State Legislatures Supports and Urges Enactment of S. 2152, The Sales Tax Simplification and Fairness Act.  (Action Resolution). (Joint with Budget and Revenue Committee)	NCSL Opposes Congressional Efforts To Preempt State Laws With Regard To Municipal BroadBand Networks (Action Resolution)
Twenty-First Century Telecommunications	Video Franchise Reform

Cradle to Grave Electronics Management

NCSL has long recognized that technology and technology equipment are important and essential to US participation in the global economy.  NCSL has long recognized the need to manage solid waste in an environmentally, economically, and politically acceptable manner.  As outlined in its Solid Waste Management policy, NCSL believes that source reduction and recycling offer the most economically and environmentally sound methods for dealing with a significant percentage of the solid waste stream.

July 2009

The Internet and Electronic Commerce

The Internet is fundamentally changing the way we communicate, research and learn, conduct business, transact financial services, obtain medical advice and care and are entertained.  Every day the nature of the Internet changes through more content, increased capacity, improved software, and faster access.  The explosive growth of the Internet, while dependent on investment affected by economic cycles, will continue to be a leading economic force projecting our states, indeed our country and the world into a new, borderless world.

As the Internet empowers citizens and democratizes societies, it also is challenging traditional business and economic rules.  The Internet provides consumers with access to products and services never before possible. In 2003, electronic commerce business to consumer sales was over $114 billion representing a 51 percent increase over 2002.  In 2004, online sales will grow to $144 billion, a growth of 27 percent over 2003. (Forrester Research)

Geographic borders cannot contain the Internet. Its ability to transcend state and national borders makes some existing laws and regulations of states and nations obsolete.  At the same time, the Internet defies detailed one-size-fits-all approach to public policy and regulation.  America's federal and state lawmakers, as well as policy makers from other countries should be guided by principles that foster the Internet's progress and ensure the realization of its potential while protecting the security and privacy of individual users.

The National Conference of State Legislatures supports the following principles in formulating laws and regulations that impact the Internet and electronic commerce:

Privacy and Security - Every American should be empowered to protect, assure and secure their privacy and digital property from intrusion or piracy.  Advanced technologies, including encryption, that empower people to protect themselves, should be available in the marketplace without onerous government controls, restrictions, technical mandates or threats.  As with every industry there are those who would seek to misuse for criminal or other purposes information obtained through fraud or hacking into computer systems of financial institutions, hospitals, educational institutions, and governmental agencies.  The National Conference of State Legislatures calls upon the Congress to enact federal Internet privacy legislation that ensures the security of Americans personal information with the least amount of government regulation as possible. However, NCSL will oppose federal legislation that seeks to preempt existing state statutes and regulations governing privacy protections and security for non-Internet based transactions.

Free Speech - The Internet allows persons to communicate and share ideas with others with an ease never before possible.  Federal government policy should rigorously protect freedom of speech and expression on the Internet but not restrict states or local governments from such oversight.  New electronic and/or digital technologies should adequately enable individuals, families and schools to protect themselves and students from communications and materials they deem offensive or inappropriate.

Self-governance - The Internet has flourished in large part due to the unregulated environment in which it has thus far developed.  Voluntary codes of conduct, industry-driven standards and individual empowerment, together with a market environment, generally hold greater future promise than does overly intrusive governmental regulation.

Consumer Protection - Industry self-regulation has made an important contribution to the development of electronic commerce.  The industry is working to address the eradication of deceptive and unwanted e-mail (spam) as well as new practices such as key logging; the surreptitious surveillance of consumers’ web surfing habits; web site hijacking; and software that inhibits termination. Industry technologies and best practices, combined with the enactment of strong state laws which outlaw deceptive practices and fraudulent online behavior, are essential elements in promoting electronic commerce and enhancing consumer protection.  Privacy and consumer protection continue to be priority issues in state legislatures.                                                                               

NCSL supports the efforts of state legislatures to develop new policy initiatives to protect consumers online but recognizes that because of the global nature of the Internet that states must seek cooperative federal action to further enhance consumer protection, privacy and information security.  However, NCSL will oppose any attempt by Congress to restrict the states’ ability to impose criminal and/or civil penalties for illegal activity that may occur over the Internet

Growth - The Internet's continued expansion depends on continuing growth in its capacity and the use of more traditional business models to manage resources.  Public policies must be designed to foster ongoing expansion of useful and affordable bandwidth, encourage development of innovative technologies and promote broad universal access.  Federal and state governments must work together to ensure that all Americans, regardless of where they live, have access to high-speed broadband technologies either through cable, digital subscriber lines (DSL), wireless, fixed wireless, satellite or other developing technologies. Government must work to guarantee open and competitive markets for broadband services.

Information Technology - Information technology (IT) is a global industry, valued at over $ 2.5 trillion, with American IT firms accounting for over $ 171 billion in foreign exports in 2003.  A strong American IT industry will enhance and strengthen the economic well being of our states and nation. 

States and the federal government must work together to ensure a climate that allows America’s IT companies to continue to perform research and technology development, to generate innovative new products and services and to solve customer problems.  Government at all levels has become one of the major consumers of information and communications technology.  Continually developing and innovating information and communications technology has allowed governments to provide more efficient, cost effective and enhanced services around the clock to all Americans.  Constituents no longer are bound by the 9:00 am to 5:00 PM, Monday through Friday workweek to obtain and benefit from government services.

As states have so often been the laboratories of democracy, so today states once again are at the forefront of using IT to provide more and efficient delivery of services at lower costs to state taxpayers.  States must have the unfettered ability to continue to seek ways to use IT to better the lives of its residents.  Therefore, NCSL will oppose any attempt by the federal government to restrict or penalize states efforts to utilize more innovative information technology services and products that allow states to provide more efficient government services to residents at lower costs to taxpayers.

Electronic Commerce and Taxation - Electronic commerce promises to become an increasingly vital component of our states' and national economies.  Government policies should create a workable infrastructure in which electronic commerce can flourish.  Policy makers must resist any temptation to apply tax policy to the Internet in a discriminatory or multiple manner that hinders growth.  Government tax systems should treat transactions involving goods and services, including telecommunications and electronic commerce, in a competitively neutral and non-discriminatory manner. The federal government and America’s industries should work with state legislatures in ensuring equal tax treatment of all forms of commerce and should encourage and not impede state efforts to achieve simplification and uniformity through the streamlining of state and local sales and telecommunications tax systems.

The National Conference of State Legislatures calls upon Congress and the Administration to support federal legislation granting to those states that fully comply with the Streamlined Sales and Use Tax Agreement mandatory collection authority for all out of state sellers that do not qualify for the small business exception.

Our nation's state legislatures are well aware of the impact that access to the Internet and electronic commerce will have on the economic vitality of our states and communities.  State legislatures also recognize that the marketplace for electronic commerce is not just in the United States, but the vast global market. State legislatures share the concern of many of our colleagues in Congress that ill-conceived or over regulation and taxation of the evolving Internet and electronic commerce services could cause much harm to our nation's own ability to compete globally.  However, state legislatures also recognize that they have an obligation to act, when and if necessary, to protect the general welfare of their constituents.

The National Conference of State Legislatures will oppose unnecessary or unwarranted federal legislation or regulation that would impede efforts by states to promote access to the Internet, enhance competition or increased consumer choice or ensure the security of personal information of consumers conducting electronic commerce transactions.

NEXUS IN THE NEW ECONOMY: ENSURING A LEVEL PLAYING FIELD FOR ALL COMMERCE

Budget & Revenue

The 1967 National Bellas Hess Supreme Court decision denied states the authority to require the collection of sales and use taxes by out-of-state mail-order firms that have no physical presence in the taxing state, even though these remote vendors solicit and obtain significant sales there using the mail or common carriers.

In a decision (8-1) rendered by the U.S. Supreme Court in Quill Corp. v. North Dakota, U.S.S.C.Doc.No. 91-194, the Court confirmed the Commerce Clause portion of its decision in National Bellas Hess, Inc. v. Dept. of Revenue, 386 U.S. 753 (1967). The Court held that a mail-order company must have nexus with a state before incurring sales and use tax collection responsibility. By clarifying that the issue is purely one of Commerce Clause implications, rather than Due Process, the Court removed the barrier that prevents Congress from intervening. The majority opinion concludes by determining that Congress is the appropriate body to resolve the issue.

In 1994, the now defunct federal Advisory Commission on Intergovernmental Relations estimated that states lost about $ 3.3 billion per year in uncollected use taxes on about $58 billion in remote sales.  In 1994, remote sellers primarily conducted businesses by mail and other traditional common carriers.   While states requested Congressional assistance to overturn the Bellas Hess and Quill decisions, Congress lacked the political will to close this loophole in the state sales and use tax systems.  Adding to the Congressional indecision was a burdensome and complex system of sales and use tax collection laws and regulations which differed from state to state. 

Cost of Collection

The sales tax is usually imposed on the customer, not the seller; states that impose the tax on the seller explicitly allow the tax to be passed through to the customer.  Currently, sellers determine the sales tax to be collected, collect the tax and remit it to the state (in four states, Alabama, Arizona, Colorado and Louisiana, sellers also must remit the local portion of the sales tax directly to the local government).  The seller also is liable for any mistakes that might occur due to misinformation from the buyer or even the state.  This means that the seller is liable for any uncollected sales tax plus interest and penalties.

A recent national survey commissioned by the Joint Cost of Collection Study, a public / private sector group, and conducted by PricewaterhouseCoopers LLP, has shown that in fiscal year 2003 the total cost to sellers to collect state and local sales taxes was $6.8 billion.  This amount was calculated after subtractions for state vendor discounts and retailer float on the sales tax revenues.   The sponsoring organizations are: National Conference of State Legislatures; National Governors Association;  Multistate Tax Commission;  Federation of Tax Administration; Government Finance Officers Association; National Retail Federation; and, Council on State Taxation.

The study showed that for fiscal year 2003,  for retailers selling between $150,000 and $1 million, the average cost was 13.47 percent of the sales taxes collected or approximately $2,386; for mid-size retailer with between $1 million and $10 million in sales, the average cost was 5.2 percent or approximately $5,279; and for the larger retailers, those with over $10 million in sales, the average cost of collection was 2.17 percent or approximately $18,233.  It is important to remember that these amounts, including the total cost for all retailers of $6.8 billion, are not reimbursed to the retailer by the state or local government; these costs come out of the retailer’s own pocket.

The burden on retailers to comply with forty-six different sales tax systems and the monetary cost to retailers for compliance  resulted in the two Supreme Court decisions, cited above, that prohibited a state from requiring an out-of-state seller from collecting sales tax on a purchase made by a resident of the state. 

Challenge from the New Economy

Today, states face a new threat to sales tax revenue -- electronic commerce-- with the potential to dramatically expand the volume of goods sold to customers without collection of state and local sales or use tax.  The combined weight of the inability to collect sales tax on remote sales through traditional carriers and the tax erosion due to electronic commerce threatens the future viability of the sales tax and essential governmental services such as education and public safety.

According to the report: “State and Local Sales Tax Revenue Losses from E-Commerce: Estimates as of July 2004”  the Center for Business and Economic Research at the University of Tennessee,  for 2006, the estimated combined state and local revenue loss due to remote sales will be between $19.2 billion and $26.5 billion.  (The study was conducted at the request of the National Conference of State Legislatures and the National Governors Association.)  For electronic commerce sales alone, the estimated revenue loss was between $10.4 billion and $14.0 billion.  The report from the University of Tennessee further estimates that the revenue loss will grow and that by 2008, the revenue loss for state and local governments could be as high as $33.6 billion, of which it is estimated that $17.8 billion would be from sales over the Internet. This amount will continue to grow proportionately each year as the amount of business to consumer transactions grows exponentially unless the states and Congress act to simplify and streamline sales tax collection.

Streamlined Sales and Use Tax Collection System

State legislatures have recognized that over the last seventy years, states have created a confusing, administratively burdensome tax system with very little regard for the compliance burden placed on multi-state businesses. In 1999, National Conference of State Legislatures, through the leadership of its Task Force on State and Local Taxation of Telecommunications and Electronic Commerce, acknowledged that states need to simplify their sales and use taxes and telecommunications taxes for the 21^st Century.

To respond to the issues raised by the Supreme Court decisions, NCSL endorsed a set of principles to guide the simplification of sales and use tax collections systems.  These principles are unique in that for only the second time in the history of the National Conference of State Legislatures, the Conference endorsed a set of actions for states to undertake.  Those principles dealing with the sales and use tax collections systems are:

First, that state and local tax systems should treat transactions involving goods and services, including telecommunications and electronic commerce, in a competitively neutral manner; and

Second, that a simplified sales and use tax system that treats all transactions in a competitively neutral manner will strengthen and preserve the sales and use tax as vital state and local revenue sources and preserve state fiscal sovereignty; and 

Third, that the Internet and Internet vendors should not receive preferential tax treatment at the expense of local “main street” merchants, nor should such vendors be burdened with special, discriminatory or multiple taxes; and

Fourth, that states recognize the need to undertake significant simplification of state and local sales and use taxes to reduce the administrative burden of collection; and

Fifth, that under such a simplified system remote sellers, without regard to physical presence in the purchaser’s state, should be required to collect sales and use taxes from the purchaser and remit such taxes to the purchaser’s state.

Since September of 1999, state legislators, governors, local elected officials, state tax administrators and representatives of the private sector have worked to develop the Streamlined Sales Tax Collection System for the 21^st Century.  In 2001-2002, 35 states enacted legislation expressing the intent of the state to simplify the state’s sales and use tax collection system and to participate in multistate discussions to finalize and ratify an interstate agreement to streamline collection of the states’ sales and use taxes.  On November 12, 2002, those states unanimously ratified the Streamlined Sales and Use Tax Agreement, which substantially simplifies state and local sales tax systems, removes the burdens to interstate commerce that were of concern to the Supreme Court, and protects state sovereignty. The Streamlined Sales and Use Tax Interstate Agreement provides the states with a blueprint to create a simplified sales and use tax collection system that when implemented, allows justification for Congress to overturn the Bellas Hess and Quill decisions.  Presently, all but one of the 45 states and the District of Columbia that levy a sales tax are involved in the process to streamline sales tax collection.

As of July 2006, 21 states representing over 30 percent of the total population of the United States enacted legislation to bring their state’s sales and use tax statutes into compliance with the Agreement.   On October 1, 2005, thirteen states with over 20 percent of the population were certified to be fully compliant with the Agreement and the system became operational.  The efforts of these states and the other states still considering compliance legislation to erase the complexity and burdens of a 70-year old tax system on transactions so quickly is unprecedented in this nation’s history.

Congressional Action

In less than six years, the states, working together with the support and assistance of the private sector, developed a new sales tax system that was fairer, simpler, more uniform and may be implemented technologically; 21 states, almost half of all the states with a sales tax, enacted legislation to comply with these changes; and, the system is working.  It is operational. However, the work to establish a truly seamless system is only half done.  It is now Congress’ turn to act. 

Therefore, the National Conference of State Legislature calls upon the Congress to grant to those states that comply with the Agreement the authority to require all sellers not meeting the small business exception, regardless of location, to collect those states’ sales and use taxes.  Some have argued that businesses that are located in a state that chooses not to comply with the Agreement, or that has no sales tax, should not be subject to collection requirements under the Agreement, even though that seller chooses to sell into a state in which the legislature has decided to comply with the Agreement.  However, no seller is forced to sell into states that comply with the Agreement.  Out-of-state sellers make that decision and in doing so, they already make themselves liable to the state’s other non-sales taxes statutes and regulations protecting consumers and conducting business. An out-of-state seller selling into a complying state will certainly make use of that state’s legal system to collect unpaid costs from the consumer.

NCSL believes that this grant of authority by Congress to the states to require sales and use tax collection by all sellers not meeting the small business exception is indeed “fiscal relief,” that ensures the viability of the sales tax as a state revenue source.  NCSL further believes that Congress, in granting this authority to the states, will level the playing field between sellers and allow all transactions to be treated in a competitively neutral manner.

NCSL will support federal legislation to grant states collection authority that:

• Allows for a national de minimis or small business exception so that sellers with less than $5 million in  taxable remote sales or other appropriate amount as determined by the federal legislation in consultation with the states, including the National Conference of State Legislatures, the Council of State Governments and the National Governors’ Association, and the retail community, including the National Retail Federation and the National Federation of Independent Business, would be exempt from collection requirements for those states in which they do not have nexus;
• Ensures reasonable  and adequate compensation for the cost of collection;
• Applies the simplifications and grant of authority to transaction taxes on all telecommunications services;
• Provides certainty to sellers by allowing an appeal process that includes review of the Agreement Governing Board’s actions  by the  United States Court of Federal Claims; and,
• Ensures that any filings by sellers in the course of registering, calculating, collecting and/or remitting sales and use taxes collected cannot be used as a criterion for determining nexus for any other tax responsibilities, including state business activity taxes.

While NCSL supports a small business exception in the federal legislation, NCSL also acknowledges that the simplifications in the Streamlined Sales and Use Tax Agreement as well as the Agreement’s commitment to assume the costs of collection for out of state sales tax collection, should eliminate any undue burden on remote sellers including sellers below a national exception.  For this reason, NCSL would support a provision in the federal legislation to reconsider the small business exception after a period of no less than 3 years and irrefutable evidence that the Agreement has met its objectives of removing any undue burden on out of state sellers. 

Business Activity Tax Reform

In this global economy, with more business being conducted by interstate companies, state legislators acknowledge the concerns raised by taxpayers frustrated with complying with different state business activity tax systems.  The complexities of the various state business activity tax regimes coupled with the actions of aggressive state tax departments in enforcing these provisions has led to numerous legal challenges, that have cost state governments and the business sector vital financial resources.

The National Conference of State Legislatures has acknowledged the need to ensure that the tax administration and collection systems for sales taxes and taxes on telecommunications services are more efficient and strives to remove the burden of tax compliance from the taxpayer.  NCSL believes that government must address the complexities of the current disparate business activity tax systems in order to reduce the complexities of tax compliance on the taxpayer and to maintain state sovereignty to levy business activity taxes.  The National Conference of State Legislatures calls upon state and federal policymakers and taxpayers to enter into discussions that would lead to a fair and equitable tax on the business activity of interstate businesses in the states in which they have a meaningful presence.

Adopted by the Executive Committee Task Force on State & Local Taxation of Telecommunications & Electronic Commerce on Monday, August 14, 2006
Adopted by the NCSL Standing Committees on Budgets & Revenue and Communications, Technology & Interstate Commerce on Tuesday, August 15, 2006
Adopted by the NCSL annual business meeting on Thursday, August 17, 2006

July 2009

Network Neutrality

WHEREAS, NCSL in its policy statement, “The Internet and Electronic Commerce” recognizes the unprecedented advances a free and open Internet has fostered across all aspects of end user customers’ lives, and

WHEREAS, the exponential growth of the Internet has flourished as a result of both the government’s ‘hand’s off’ approach, ever increasing competition, as well as fierce consumer interest, and

WHEREAS, regulation of the Internet may interfere with future investment and innovations benefiting the health and well-being of its end user customers, and

WHEREAS, Internet users should be given a choice when it comes to selecting a broadband connection that will meet their current and future needs for speed, reliability, quality of service, and capabilities not yet envisioned, and

WHEREAS, broadband connections, services, and applications should continue to become more affordable and accessible to all consumers, and

WHEREAS, companies that invest in broadband and broadband-related applications should be afforded the flexibility to explore fair and competitive business models and pricing plans for their products and services, and

WHEREAS, mandated net neutrality regulations that go beyond the FCC’s broadband policy statement would impede future capital investments in the U.S.’ broadband infrastructure, which already lags behind its European and Asian counterparts, and

WHEREAS, according to a 2006 International Telecommunications Union (ITU) study of 2004 data, the U.S. ranked 16^th in broadband penetration and could decline further as proposed net neutrality regulations places more of the cost burden onto the end user, exacerbating an already disturbing trend of a ‘digital divide’ within our country.

THEREFORE, LET IT BE RESOLVED, that the National Conference of State Legislatures calls upon the Congress of the United States of America to maintain today’s approach that allows the competitive marketplace to drive broadband and broadband-related applications development and deployment.

BE IT FURTHER RESOLVED that, in the event Congressional legislative action is deemed warranted, that the Congress avoid adopting new rules and limit such action to providing the FCC with clear authority to oversee, but not proactively intervene in, the broadband Internet marketplace by adopting principles that focus on assessing whether the market continues to ensure that consumers can:

            (1) receive meaningful information regarding their broadband service plans;

            (2) have access to their choice of legal Internet content within the bandwidth limits and quality of service of their service plan;

            (3) run applications of their choice, within the bandwidth limits and quality of service of their service plans, as long as they do not harm the provider’s network; and

            (4) be permitted to attach any devices they choose to their broadband connection at the consumer’s premise, so long as they operate within the bandwidth limits and quality of service of their service plans and do not harm the provider’s network or enable theft of services: and

BE IT FURTHER RESOLVED, that a copy of this resolution be sent to the President of the United States, members of Congress and the members of the Federal Communications Commission.

July 2007

Spectrum Management

The National Conference of State Legislatures recognizes the electromagnetic spectrum, as managed by the federal government, to be a vital national resource for public, as well as private sector radio frequency needs.

The National Conference of State Legislatures supports an examination of current and future radio frequency spectrum requirements and uses. In view of the limitations of the radio frequency spectrum, management reforms should be instituted to improve the current allocation and assignment process. Access needs to be provided to all users of the spectrum.

Spectrum resources as utilized at the state and local level provides a reliable means of communication in matters of public safety and interest. State law enforcement operations, emergency responders, and public utilities have made substantial investment in facilities and equipment necessary for accessing the allocated frequency assigned to them. These investments have been made in recognition of the limitations in alternative methods of transmission for public purposes.

Proposals allowing developing technologies to share the same bandwidth presently utilized by state and local governments and public utilities should not be adopted until such time as transmission can sufficiently be assured to avoid signal interference with public users.

The National Conference of State Legislatures opposes any effort to provide additional frequency by means of reallocating what is currently allocated for state, local, public utility uses and transportation direction and safety purposes until the aforementioned concerns are adequately addressed.

In the Omnibus Budget Reconciliation Act of 1997, the Congress provided that additional needed analog spectrum would be available to state and local governments for public safety purposes at such time that the broadcasting industry successfully completed the transformation to high definition television or digital television. Congress stipulated that the transfer from analog to digital should occur no later than 2006. However, at the request of the broadcasting industry Congress made the transfer of the industry's analog spectrum to state and local governments contingent on 85 percent of the viewing public having access to digital television. While broadcasters have made strides to provide high definition television, the American public has not been interested in buying the equipment to receive the digital television transmission. NCSL calls upon the Congress and the Administration to review the current status of digital television penetration. If it appears that the 85 percent threshold will not be met by 2006, the federal government must find another solution to the growing need of state and local public safety agencies for additional spectrum.

Any amount of spectrum which is reallocated from the federal government must be made available for not only new commercial technologies, but also state and local government and public safety services.

NCSL supports the exemption of state and local governments from any competitive bidding process.

State Sovereignty To Use Tax Policy For Economic Growth

WHEREAS, under the United States Constitution, states have enjoyed the ability to levy taxes for the support of state government as decided by the elected representatives of the people; and

WHEREAS, under this regime of fiscal federalism, state legislatures have enjoyed the ability to set tax policy to encourage economic growth while maintaining balanced budgets; and

WHEREAS, the United States Court of Appeals for the Sixth Circuit ruled in DaimlerChrysler Corp. et al. v. Cuno et al. that state tax policy to encourage economic growth as decided by elected state policymakers violates the Interstate Commerce Clause of the Constitution; and

WHEREAS, such federal court intrusion into state tax policy is a violation of the long standing constitutionally ensured fiscal federalism and threatens to tear at our nation’s long held belief that states are the laboratories of democracy; and

WHEREAS, the United States Supreme Court on May 15, 2006, vacated the lower court decision by ruling that the plaintiffs did not establish their standing to challenge the state franchise tax credit; and

WHEREAS, the decision by the United States Supreme Court did not rule on the merits of the issue of state sovereignty to determine its tax policy in this instance; and

WHEREAS, legislation has been introduced in Congress by two former Governors, Senators Voinovich of Ohio and Alexander of Tennessee to reaffirm the authority of elected state policymakers to determine tax policy that ensures a state’s economic viability;

NOW, THEREFORE BE IT RESOLVED, the National Conference of State Legislatures reaffirms its support for fiscal federalism and the ability of each state legislature to set its own tax policy to meet the needs of the state; and

BE IT FURTHER RESOLVED, that NCSL finds that the use of state tax policy by elected state policymakers to ensure and enhance the economic viability of the state is not a violation of the Constitution’s Interstate Commerce Clause, but rather a manifestation of what Supreme Court Justice Brandeis termed the “states as laboratories of democracy;” and

BE IT FURTHER RESOLVED, that NCSL will support congressional efforts as sponsored by Senators Voinovich and Alexander that seek to reaffirm the authority of elected state tax policymakers to determine tax policy and spending decisions.

July 2007

National Conference of State Legislatures Supports and Urges Enactment of S. 2152, The Sales Tax Simplification and Fairness Act.  (Action Resolution).

BE IT FURTHER RESOLVED THAT, a copy of this resolution be sent to the President of the United States and to all the members of Congress.

July 2007

NCSL Opposes Congressional Efforts To Preempt State Laws With Regard To Municipal BroadBand Networks (Action Resolution)

WHEREAS, the United States Supreme Court in its decision Hunter v. City of Pittsburgh,  recognized that municipalities do not have any rights under the federal Constitution to challenge a state legislature’s enactments; and

WHEREAS, the United States Supreme Court stated in that decision,

“Municipal corporations are political subdivisions of the State, created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them…In all these respects the State is supreme, and its legislative body, conforming its action to the state constitution, may do as it will, unrestrained by any provision of the Constitution of the United States;” and

WHEREAS, the Supreme Court further ruled in 1933 in the decision, Williams v. Baltimore, that “a municipal corporation, created by a state for the better ordering of government, has no privileges or immunities under the federal constitution which it may invoke in opposition to the will of its creator;” and

WHEREAS,  the United States Supreme Court in 2004 by a vote of 8-1 in Nixon v. Missouri Municipal League, upheld a Missouri statute forbidding the state’s political subdivisions from offering telecommunications or Internet services; and

WHEREAS, at least fourteen states, Arkansas, Florida, Minnesota, Missouri, Nebraska, Nevada, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin have enacted statutes to regulate, limit or prohibit the ability of municipalities with regard to funding or creating high speed Internet networks, broadband and wireless technology known as WiFi; and

WHEREAS, some in Congress seek to control the states’ sovereignty over its own political subdivisions by preempting state laws that either prohibit or regulate municipal broadband networks; and

WHEREAS, federal legislation, H.R. 5252 passed by the U.S. House of Representatives and similar legislation approved by the U.S. Senate Commerce Committee would preempt any state statute, regulation, or other state legal requirement with regard to “allowing cities and towns to develop their own broadband networks;” and

WHEREAS, this preemption contained in legislation primarily to establish a national video franchise would violate the 10^th Amendment to the Constitution of the United States, which reserve to the states powers not delegated to the federal government; and

WHEREAS, the sponsors and supporters of the federal legislation fail to make any case that state regulation and prohibition of municipal networks is a violation of the Constitutions’ Interstate Commerce Clause;

NOW, THEREFORE BE IT RESOLVED, that the National Conference of State Legislatures finds that certain provisions of H.R. 5252 and the Senate substitute to H.R. 5252 which seek to prohibit state sovereignty over its political subdivisions are a violation of the 10^th Amendment to the Constitution;

BE IT FURTHER RESOLVED, that NCSL will oppose such blatant disregard of state sovereignty as contained in the above referenced legislation; and

BE IT FURTHER RESOLVED, that should the Congress and the Administration enact such legislation that preempts state sovereignty and the ability of state legislatures to enact laws or regulations with regard to the state’s municipalities, NCSL would assist state legislatures seeking to challenge the constitutionality of such federal law; and

BE IT FURTHER RESOLVED, that a copy of this resolution be sent to all members of the 109^th Congress and the President of the United States.

 

July 2007

 

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Twenty-First Century Telecommunications

Neal Osten, Committee Director
Jo Anne Bourquard, Group Director

Last Updated September 5, 2006