Gale Encyclopedia Of American Law 3Rd Edition Volume 3 P3 ppt

broadcasting involving intrastate activity may be subject to local taxation. A state may impose a nondiscriminatory tax for the use of its highways by motor vehicles in interstate commerce if the charge bears a fair relation to the cost of the construction, maintenance, and regulation of its highways. The commerce clause does not prohibit a state from imposing a tax on a natural resource that is produced within its borders and that is sold primarily to residents of other states. In Commonwealth Edison Co. v. Montana, 453 U.S. 609, 101 S. Ct. 2946, 69 L. Ed. 2d 884 (1981), the U.S. Supreme Court upheld a 30 percent SEVERANCE tax levied by Montana on the production of coal, the bulk of which was exported for sale to other states. The amount of the tax was challenged as an unconstitutional burden on interstate commerce. The Court reasoned that the commerce clause does not give the residents of one state the right to obtain resources from another state at what they consider a reasonable price, for that right would enable one state to control the development and depletion of natural resources in another state. If that right were recognized, state and federal courts would be forced to formulate and to apply a test for determining what is a reasonable rate of taxation on legitimate subjects of taxation, tasks that rightfully belong to the legislature. In 2005 the Supreme Court reviewed the imposition of a motor vehicle fee by the State of Michigan. Under the Michigan law, motor carriers were required to pay a flat fee of $100 for a permit to transport property withi n the state. This fee applied both to motor carriers that limit their operations in the state and to those that engaged in both interstate and intrastate operations. The fee did not depend upon the number of miles traveled within the state, the number of trips taken within the state, or the portion of the time that a carrier spent traveling between states or within states other than Michigan. The MCA requires payment of other fees as well. The statute requires all carriers that are registered in Michigan and that operate exclusively in interstate commerce to pay a $100 fee. Additionally, all motor carriers that are registered outside the state must pay a registration fee of $10. In an opinion by Justice STEPHEN G. BREYER, the majority concluded that nothing in the Michigan statute offended the commerce clause because the fee only affected activities taking place within the borders of the state of Michigan. Moreover, the Court rejected arguments that the state imposed the fee in a manner that burdened interstate commerce (American Truck- ing Ass’ns v. Michigan Public Serv. Commission, 545 U.S. 429, 125 S. Ct. 2419, 162 L. Ed. 2d 407 [2005]). In a 2008 decision the Court ruled that the commonwealth of Kentucky could exempt its residents from payin g tax on the interest of municipal BONDS issued by the common- wealth and its cities, counties, and other political subdivisions, while taxing them for interest on municipal b onds issu ed by oth er states (Department of Revenue of K entucky v. Davis, ___ U.S. ___, 128 S. Ct. 1801, 1 70 L. Ed. 2d 6 85 [2008]). The Court determined that this long-standing practice was justified in ways that did not implicate the commerce clause. Crimes Involving Commerce Congress may punish any conduct that inter- feres with, obstructs, or prevents interstate and foreign commerce, whether it occurs within one state or involves a number of states. The MANN ACT , which outlaws the transportation of any woman or girl in interstate or foreign commerce for the purpose of PROSTITUTION, debauchery, or other immoral acts, is a constitutional exercise of the power of Congress to regulate commerce (18 U.S.C.A. §§ 2421-2424 [1910]). The COUN- TERFEITING of notes of foreign corporations and bills of lading is a crime against interstate commerce. Under federal statutes, the knowing use of a COMMON CARRIER for the transportation of OBSCENE matter in interstate or foreign commerce for the purpose of its sale or distribution is illegal. This prohibition applies to the importation of obscene matter even though it is for the importer’s private, personal use and possession and not for commercial purposes. The Anti-Racketeering Act (18 U.S.C.A. § 1951 [2000]) makes RACKETEERING by ROBBERY or per sonal violence that interferes with inter- state commerce a federal offense. The provi- sions of the CONSUMER CREDIT PROTECTION ACT (15 U.S.C.A. § 1601 et seq. [2000]) prohibiting EXTORTION have been upheld, as extortion is deemed to impose an undue burden on GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 8 COMMERCE CLAUSE interstate commerce. Anyone who transports stolen goods of the value of $5,000 or more in interstate or foreign commerce is subject to criminal prosecution pursuant to the National Stolen Property Act (18 U.S.C.A. § 2311 et seq. [2000]). FURTHER READINGS Cauthorn, Kim. 1995. “Supreme Court Interprets Scope of Congressional Authority under Interstate Commerce Clause.” Houston Lawyer 33-AUG (July-August). Conant, Michael. 2008. The Constitution and Economic Regulation: Objective Theory and Critical Commentary. New Brunswick, N.J.: Transaction. McJohn, Stephen M. 1995. “The Impact of United States v. Lopez: The New Hybrid Commerce Clause.” Duquesne Law Review 34. Prentice, E. Parmalee, and John G. Egan. The Commerce Clause of the Federal Constitution. Littleton, Colo.: F. B. Rothman. Ramaswamy, M. 1948. The Commerce Clause in the Con- stitution of the United States. New York: Longmans, Green. Weaver, Russell L. 2009. Inside Constitutional Law: What Matters and Why. New York: Aspen. CROSS REFERENCES Civil Rights; Federalism; Interstate Commerce Commission; Preemption; States’ Rights; Telecommunications. COMMERCE DEPARTMENT The DEPARTMENT OF COMMERCE (DOC) is an agency of the EXECUTIVE BRANCH of the federal government that promotes international trade, economic growth, and technological advance- ment. It performs many activities related to business, trade, and technology. Its numerous divisions work to foster business growth and to create jobs; to prevent UNFAIR COMPETITION in foreign trade; to distribute economic statistics and studies for use by businesses, the govern- ment, and the general public; to support and conduct scientific, engineering, and technologi- cal research and development; and to promote foreign trade and U.S. exports. As part of its broad mission, the DOC administers the Bureau of the CENSUS, the Bureau of Economic Analysis, the National Oceanic and Atmospher- ic Administration, the National Weather Service, the U.S. PATENT AND TRADEMARK OFFICE, the National Institute of Standards and Technology, and several other major govern- ment agencies or bureaus. (As of 2009, twelve were under the purview of the Commerce Department.) Originally part of the Department of Com- merce and Labor, which was created in 1903, the Department of Commerce was established as a separate entity by law on March 4, 1913 (U.S.C.A. § 1501). The secretary of commerce sits on the president’s cabinet along with the secretaries of the 13 other executive agencies of the federal government and other selected executive officials. Although the activities of the Department of Commerce are not always prominent in the American consciousness, the department’s efforts in administering economic programs have a major effect on the average citizen. Under the administration of President GEORGE H .W. BUSH, the Department of Commerce admi- nistered a number of programs designed to enhance economic growth and to stimulate economic progress in the wake of a recession. Economics and Statistics Administration The Econo mics and Statistics Administration (ESA), supervised by the undersecretary for economic affairs, advises the presi dent on economic developments and macroeconomic and microeconomic policy. It also makes economic forecasts and presents curre nt eco- nomic data to the public through the National Trade Data Bank and the Economic Bulletin Board. The office oversees the Bureau of the Census and the Bureau of Economic Analysis. The Bureau of the Census was officially established as a permanent office on March 6, 1902 (32 Stat. 51), although the ESA remains its parent agency. Its major duties are authorized by the Constitution (which requires that a census of the U.S. population be conducted every ten years) and by laws codified in Title 13 of the U.S. CODE. By law, the census data collected from individuals must be kept confi- dential. However, statistics collected from the data are published for use by Cong ress, the executive branch, and the general public. The Bureau of the Census collects data on housing, agriculture, state and local govern- ments, business, industry, and international trade. The bureau also publishes projections of future population trends. For a fee, the bureau will search records and furnish certifi- cates to individuals who require evidence of age, relationship, or place of birth. The headquarters of the bureau is located in GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION COMMERCE DEPARTMENT 9 Suitland, Maryland, and the bureau operates 12 regional offices. The Bureau of Economic Analysis, form erly the Office of Business Economics, was estab- lished on December 1, 1953, and also falls under the ESA. The bureau prepares and interprets statistics on the gross domestic product (G DP), personal income, foreign trade, and many other national accounts relating to commerce. It makes statistics available through numerous media and pub- lications, including the monthly Survey of Current Business. Bureau of Industry and Security The Bureau of Industry and Security, with its offices of Export Administration and of Export Enforcement, directs the nation’s export control Department of Commerce Secretary Deputy Secretary Chief of Staff Chief Economist Under Secretary and Administrator Under Secretary for International Trade International Trade Administration Under Secretary for Industry and Security Bureau of Industry and Security Under Secretary for Economic Affairs Economics and Statistics Administration Director National Institute of Standards and Technology Under Secretary for Intellectual Property and Director Assistant Secretary for Oceans and Atmosphere and Deputy Administrator Assistant Secretary for Trade Promotion and DG of the U.S. Foreign & Commercial Services Assistant Secretary for Market Access and Compliance Assistant Secretary for Import Administration Assistant Secretary for Export Administration Assistant Secretary for Export Enforcement National Director Minority Business Development Agency Assistant Secretary for Manufacturing and Services Assistant Secretary for Economic Development Economic Development Administration Assistant Secretary for Communications and Information National Telecommunications and Information Administration Director National Technical Information Service Director Bureau of the Census Director Bureau of Economic Analysis General Counsel Inspector General Chief Financial Officer and Assistant Secretary for Administration Assistant Secretary for Legislative and Intergovernmental Affairs Chief Information Officer Office of Public Affairs Office of Business Liaison Executive Secretariat Office of Policy and Strategic Planning Office of White House Liasion United States Patent and Trademark Office National Oceanic and Atmospheric Administration ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION 10 COMMERCE DEPARTMENT policy, including the processing of export license and applications as well as treaty compliance. It assesses whether export controls should be imposed upon specific products, with particular regard for the potential danger to U.S. national security that may result if the products are exported. This office works with U.S. allies to advocate for better ways of controlling strategic exports. Export Enforc e- ment investigates violatio ns of export-control laws, including possible diversions of exports to countries that are forbidden to receive particu- lar products. Economic Development Administration The Economic Development Adm inistration, established in 1965, works to generate economic and job growth in the United States, including developing the economies of distressed areas and/or local communities experiencing high unemployment; low income levels; or sudden, severe economic hardship. It funds public- works projects for public, private nonprofit, and American Indian groups, including indus- trial parks, roads, water and sewer lines, and airports. It also provides technical assistance and grants in order to promote business development. International Trade Administration Created in 1980, the International Trade Admi- nistration (ITA) works to improve the interna- tional trade position of the United States by striving to strengthen the competitiveness of American industries and workers. The ITA oversees no nagricultural trade operations of the U.S. government and supports the efforts of the OFFICE OF THE U.S. TRADE REPRESENTATIVE.It includes the offices of International Economic Policy, Import Administration, and Trade Development, and the U.S. and Foreign Com- mercial Service. The last agency produces and markets services and products to promote U.S. exports, including seminars and conferences on international trade. Minority Business Development Agency Formerly the Office of Minority Business Enterprise, the Minority Business Development Agency was established in 1979. It helps to develop minority-owned businesses. The agency operates a network of six regional offices and four district offices that provide technical and managerial assistance to business owners and entrepreneurs. National Oceanic and Atmospheric Administration The National Oceanic and Atmospheric Ad- ministration (NOAA) was formed in 1970. It is authorized to explore and to map the global ocean and its living resources; to analyze and predict conditions of the atmosphere, ocean, sun, and space; to monitor and issue warnings regarding destructive natural events such as hurricanes, tsunamis, and tornadoes; and to assess the changing condition of the environ- ment. Included in this wide mandate are such activities as protection of marine species; preparation of nautical and aeronautical charts and geodetic surveys; prediction of ocean tides and currents; satellite observation of the atmo- sphere and oceans; and management of ocean coastal zones. Offices of the NOAA include the National Weather Service; the National Marine Fisheries Service; the National Environmental Satellite, Data, and Information Service; the National Ocean Service; and the Office of Oceanic and Atmospheric Research. National Telecommunications and Information Administration The National Telecommunications and Infor- mation Administration (NTIA) was formed in 1978. It is responsible for advising the president on telecommunications policy; developing and presenting national plans at international com- munications conferences; managing federal use of the radio frequency spectrum; and adminis- tering the National Endowment for Children’s Educational Television. Offices of the NTIA include the Public Telecommunication Facilities Program, which provides grants to extend delivery of public telecommunications services to as many citizens as possible , and the Institute for Telecommunication Sciences, which oper- ates a research and engineering laboratory in Boulder, Colorado. Patent and Trademark Office The U.S. PATENT and Trademark Office (PTO) awards patents, which give inventors exclusive rights to their inventions, and registers TRADE- MARKS , which provide businesses and organiza- tions with rights to symbols and other features that distinguish their products or services. The PTO issues three types of patents: design GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION COMMERCE DEPARTMENT 11 patents, plant patents, and utility patents. A patent is valid for 20 years from the date when the application was filed. The PTO also participates in LEGAL PROCEEDINGS involving patents or trademarks; advocates for strength- ening INTELLECTUAL PROPERTY protection world- wide; and maintains a roster of qualified patent agents and attorneys. National Technical Information Service The National Technical Information Service helps businesses to develop tech nology that will increase their competitiveness in the marketplace. It identifies and attempts to remove governmental barriers to the commer- cialization of U.S. science and technology; helps to identify priority technologies; monitors foreign competitors’ progress in technology; advises the president on issue s concerning commercial technology and related policy; and promotes joint efforts among business, govern- ment, educational institutions, and nonprofit organizations. It also collects and distributes scientific and technical information generated by the U.S. government and foreign sources. Its collection comprises over two million works. The NTIS Bibliographic Database is available on CD-ROM or online through commercial vendors. The Technology Administration produces the Federal Research in Progress Database, a summary listing of 140,000 federally funded research projects in progress. The NTIS also licenses government-owned inventions, operates the FedWorld computer system, and makes available a major Japanese online infor- mation system. The NTIS is a self-supporting agency, collecting its revenues through sales of its research products. The office also manages the National Medal of Technology Program, the president’s highest technology award. National Institute of Standards and Technology The National Institute of Standards and Tech- nology (NIST) was founded in 1901 as the National Bureau of Standards and was renamed in 1988. In addition to its traditional role as developer and protector of national standards of measurement, the institute has increasingly been called upon to help industry to use technology to improve product quality and reliability, improve manufacturing processes, and more rapidly bring to market products that use new scientific discoveries. The NIST administers the Malcolm Baldrige National Quality Award, first established in 1987, which recognizes outstanding quality achievement in business. The institute operates a world-class center in Boulder, Colorado, for science and engineering research, including research in the fields of chemistry, physics, electronics, materials science, computing, and mathematics. Its headquarters is located in Gaithersburg, Maryland. U.S. Travel and Tourism Administration Established in 1981, the U.S. Travel and Tourism Administration formulates and imple- ments national policy relating to travel and tourism. It develops trade and statistical re- search programs to assist the tourism industry, and aids small- and medium-sized travel and tourist businesses. It operates regional offices in Amsterdam, Frankfurt, London, Mexico City, Milan, Paris, Sydney, Tokyo, and Toronto, as well as a Miami office that services South American markets. Web site: http://www.commerce.gov/ FURTHER READINGS Commerce Department. 2008. “Commerce Department FY 2009 Budget Highlights the President’s Priorities and Commitments.” White House. Office of Public Affairs. Available online at http://www.commerce.gov/ssLINK/ PROD01_005145; website home page: http://www. commerce.gov/ (accessed August 5, 2009) U.S. Government Manual Website. Available online at www. gpoaccess.gov/gmanual (accessed March 5, 2010). United States Department of Commerce. 2008. Department of Commerce: Condensed History, Duties, and Practical Operation. Charleston, SC: BiblioBazaar. COMMERCE, ELECTRONIC Electronic commerce includes any sales trans- action that takes place via computer or over the Internet. In 1990 nobody would have predicted that by the end of the twentieth century people could conduct nearly all of their commercial transactions electronically. In the early twenty- first century, a person with an INTERNET connec- tion can purchase anything from clothing to books to jewelry to stereo equipment online. It is possible to purchase insurance, pay one’s telephone bill, and buy groceries over the Internet. Banking transactions such as transfers GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 12 COMMERCE, ELECTRONIC from one account to another can be accom- plished online quickly and efficiently. Although most commerce is still conducted in person, more than one-third of adults in the United States made at least one purchase online in 2002. ELECTRONIC COMMERCE (or e-commerce) has its origins in the 1960s, with the introduction of a computerized check-processing system called the Electronic Recording Machine—Accounting (ERMA). Banks used ERMA to process billions of checks each year, making it possible for nine employees to do the work of 50. During the 1970s, companies began using Electronic Data Interchange (EDI) to process purchase orders, invoices, and shipping notifications. Although EDI could save time and money, it was an expensive and somewhat cumbersome system, and small to mid-size businesses could not afford it. The introduction of the Internet in the mid 1990s opened electronic processing to compa- nies of all sizes; anyone with a computer could connect to a global system that reached into countless businesses and homes. The first major so-called virtual company to appear on the Internet was Amazon.com, founded by Jeff Bezos in Seattle . Amazon.com began DOING BUSINESS in July 1995. Its premise was simple: People could purchase books online through Amazon.com for less money than the same books would cost at a local bookstore. Because Amazon.com had no actual retail stores (the books were stored in a warehouse), it could afford to keep prices lower than the competi- tion. If Amazon.com had a buyer’s order in stock in its warehouse, it could be delivered within two to three days. In some bookstores, a special order for an out-of-stock book could take weeks. Amaz on.com has since expanded and currently offers a wide variety of products in addition to books.) Not long afterward, in September 1995, Pierre Omid yar and Jeff Skoll founded eBay, an online auction service. Basically, eBay allows sellers and potential buyers to deal online; as with a live auction, various buyers bid for an item, and the seller accepts the highest bid. In the ensuing years, Amazon.com, eBay, and similar virtual companies cropped up on the Internet. Established brick-and-mortar companies also established an Internet pres- ence. In the early 2000s, the average person can find the local lawyer, doctor, dry cleaner, and baker on the Internet along with co mpanies such as Amazon.com and eBay. Not every company offers online retail services; in truth, many smaller companies merely have one or two web pages on their site with a telephone number and a link to an E-MAIL address. For some companies, the Internet has proven to be a double-edged sword. On the one hand, a growing number of consumers expect that the businesses they deal with will have a web site. Even many self-employed individuals have web sites for precisely this reason. On the other hand, a web site that has nothing of substance to offer will simply drive potential customers away. Why do people shop online? One compel- ling advantage is conv enience. The idea of being able to sit in front of one’s computer, look at different objects, compare prices, enter some data, press a button, and wait for a package to arrive two or three days later is attractive to a Amounts are from 2006 due to a lack of sufficient data in 2007. E-Commerce Revenue, by Select Service Industries, 2007 Revenue estimates (in millions of dollars) Industry Publishing Telecommunications a Online information services a Travel arrangement and reservation services Motor vehicles and parts dealers Electronics and appliance stores Clothing and clothing accessory stores Sporting goods, hobby, book, and music stores Electronic shopping and mail order houses $18,581 $4,435 $4,637 $7,308 $23,600 $1,301 $2,115 $1,686 $88,915 SOURCE: U.S. Census Bureau, E-Stats, “Measuring the Electric Economy,” available online at http://www.census.gov/econ/estats/index.html (accessed Au g ust 14, 2009). 0 20,000 40,000 60,000 80,000 100,000 ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION COMMERCE, ELECTRONIC 13 many people, especially if they do not live close to major retail stores. (A person on the East Coast can make an online purchase from a West Coast store.) Speed is another factor. Most e-commerce retailers offer two- or three-day delivery (or next-day service for an additional fee). An online bookstore might be able to ship a hard-to-find book to the buyer in less time— and possibly for less money—than a small neighborhood bookstore that tries to track the book down. In 2008, according to the eighth annual UCLA Internet Report (released February 2009), 65 percent of Internet users buy online; 69 percent of Internet users who buy online said that online purchasin g has reduced their buying in traditional retail stores somewhat or a lot. Thanks to improved technology that allows information to be encrypted when it is sent from one computer to another, it is extremely difficult for an unauthorized person to obtain a consumer’s credit card number or SOCIAL SECURITY number. (Proponents of e-commerce argue that it is no more dangerous to send one’s credit card number over the Internet than it is to have it on a receipt that can be read by countless people.) As for missing out on the experience of actually seeing and touching an object before purchasing it, many web sites now have detailed information as well as photographs of the merchandise being offered for sale. Even retailers that do not offer electronic purchases can do this. Lenscrafters, the large optical chain that is famous for its one-hour glasses service, clearly cannot sell its wares over the Internet. The Lenscrafters web site has pictures of many of its frames, as well as a guide to help visitors determine their facial shape and which frame would look best on them. (According to the 2003 UCLA study, many Internet shoppers browse through their local retail stores to examine a product, and after that they look on the computer to see whether they can order it for less online.) A major breakthrough in safe electronic transactions came with the passage of the Electronic Signatures in Global and National Commerce Act. The statute, which was sign ed into law by President BILL CLINTON on June 30, 2000, is better known as the E-Sign Act. It removes one of the most stubborn barriers to e-commerce by making it safe for people to transmit personal information over their computer. The E-Sign Act authorizes legal recognition of electronic (digital) signatures, contracts, and records. It also provides a uniform framework for all of the states to follow. A number of states had enacted their own laws, which made interstate electronic commerce cumbersome at best. E-Sign can be quite useful for people who need to sign something by a deadline. A person who wishes to purchase HEALTH INSURANCE online, for example, can do so over the computer instead of having to fill out a form and mail it in and risk being presented with a rate increase that went into effect before the paperwork was received. With an electronic SIGNATURE,the transaction is completed on the spot. In June 1998 the U.S. DEPARTMENT OF COMMERCE issued a white paper that called for the creation of a not-for-profit corporation to help manage the Internet’s infrastr ucture. This corporation became known as the Internet Corporation for Assigned Names and Numbers (ICANN). The best known function of ICANN is its coor dination of the DOMAIN Name Service (DNS). In other words, ICANN is responsible for overseeing the technology that allows Internet users to type in domain names (i.e., www.domainname.com) instead of long strings of numbers. This technology mak es it easier for users to type in names of retail stores or online commerce sites. ICANN also oversees the Uniform Domain-Name Dispute Resolution Policy (URDP). This policy governs the meth- ods by which corporate entities can choose and protect their domain names. All URDP cases are arbitrated through the World INTELLECTUAL PROPERTY Organization (WIPO), a group created in 1970 to safeguard intellectual property rights. Companies whose names are trademarked or who are well-known organizations are some- times forced to contend with individuals who try to use a similar domain name. This practice is known as cybersquatting. One example of a company that was the victim of cybersquatting is ABC Carpet Company, an established New York City-based retailer of rugs and other home accessories. In 1998, ABC registered the name “ABC Carpet & Home” (which it had begun using in 1995) with the U.S. PATENT AND TRADEMARK OFFICE . Two separate individuals tried to use domain names with “ABC Carpet & Home” in them, and in both cases, WIPO GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 14 COMMERCE, ELECTRONIC ordered that ownership of the domain names in question be transferred to the New York company (ABC Carpet Co. v. Helen Gladstone (WIPO Case No. D2001-0521); ABC Carpet Co. v. Tom Boltz and abccarpetandhome.com (WIPO Case No. D2001-0531). One e-commerce question that has gene- rated interest is whether states should be able to tax sales conducted over the Internet. Techni- cally, Internet transactions are taxable, but a 1992 ruling by the U.S. Supreme Court held that states could only require sellers to collect taxes if they have a physical presence in the same state as the consumer. In 1998 Congress imposed a three-year moratorium against any Internet taxes, which was renewed for two years in 2001. Despite efforts by the National Governors Association (NGA) to have Congress repeal the physical presence requirement, by 2009 no legislation had passed Congress. The NGA first introduced the Streamlined SALES TAX Project (SSTP) in 2000 to adopt uniform tax rates among the 50 states. By 2009, 23 states had signed on, awaiting congress ional approval. FURTHER READINGS Kharif, Olga. 2009. “The State of the Internet Sales Tax.” Business Week, April 20. Secretariat on Electronic Commerce. 1997. The Emerging Digital Economy. Washington, D.C.: U.S. Department of Commerce. UCLA Center for Communication Policy. 2009. The 2009 UCLA Internet Report: Surveying the Digital Future. Los Angeles: UCLA. CROSS REFERENCES Justice Department; Internet; Taxation; Telecommuni- cations COMMERCIAL CODE A colloquial designation for the body of law known as the Uniform Commercial Code (UCC), which governs the various business transactions that are integral parts of the U.S. system of commerce. The UCC has been adopt ed in virtually all of the states. COMMERCIAL LAW A broad concept that describes the substantive law that governs transactions between business entities, with the exception of maritime transpor- tation of goods (regulated by admiralty and maritime law). Commercial law includes all aspects of business, including advertising and marketing, collections and bankruptcy, banking, contracts, negotiable instruments, secured transac- tions, and trade in general. It covers both domestic and foreign trade; it also regulates trade between states. The term commercial law describes a wide body of laws that govern business transactions. The UNIFORM COMMERCIAL CODE (UCC), which has been adopted in part by every state in the United States, is the PRIMARY AUTHORITY that governs commercial transactions. The UCC is divided into nine articles, covering a broad spectrum of issues that arise in commercial transactions. These articles govern the follow- ing: sales of goods, leases of goods, negotiable instruments, bank deposit, fund transfers, letters of credit, bulk sales, warehouse receipts, bills of lading, investment SECURITIES,andSECURED TRANSACTIONS . A number of other laws also govern business transactions. For instance, although Article 4 of the UCC governs bank deposits, federal law in the form of statutes and regulations prescribe requirements for BANKS AND BANKING in general. Likewise, federal law governs such issues related to commercial law as BANKRUPTCY and debt collection. Many of the federal laws related to commercial transactions are codified in title 15 of the U.S. CODE. Although the UCC controls most aspects of domestic commercial law, the COMMON LAW of contracts, as well as other state laws, still applies to some types of transactions that arise in business, such as contracts for services. INTERNA- TIONAL LAW is likewise an important component of this area. For instance, the UNITED NATIONS Convention on Contracts for the International Sale of Goods has been ratified by approxi- mately 62 nations, representing two-thirds of the world’s trade. Though the business world undergoes constant change, commercial laws generally have remained static. The COMMISSIONERS ON UNIFORM LAWS , in conjunction with the Ameri- can Law Institute and other organizations, periodically revises the articles of the UCC. However, the revision process of the UCC is typically slow and deliberate. R ecent revi- sions to Article 2 (governing the sale of goods) and Article 9 (governing secured transactions) took several years to complete. Thus, not only is commercial law substantially uniform GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION COMMERCIAL LAW 15 throughout the United States, but also those who conduct business can proc eed with com- mercial transactions with some degree of certainty as to the law that governs those transactions. CROSS REFERENCES Banks and Banking; Check; Contracts; Mercantile; Mer- chantable; North American Free Trade Agreement; Prom- issory Note; Sales Law; Uniform Commercial Code; Warranty. COMMERCIAL LAW LEAGUE OF AMERICA The COMMERCIAL LAW LEAGUE OF AMERICA (CLLA) was founded in 1895 to elevate standards and improve the practice of COMMERCIAL LAW,to encourage an honorable COURSE OF DEALING among its members and among the profession at large, to promote uniformity of legislation in matters affecting commercial law, and to foster among its members a feeling of fraternity and mutual confidence. Its members are lawyers, commercial agencies, and law list publishers. The Commercial Law League of America is the national association supporting and advo- cating for the interests of professionals practic- ing commercial law. It is an organization of attorneys and other professionals actively en- gaged in the fields of commercial law, BANKRUPTCY, collections, finance, and INSOLVENCY. The League has been a pioneer in standardizing commercial practice. It continues to maintain and expand its program of activities in such areas as creditors’ rights, commercial laws and legisla- tion, and bankruptcy and reorganization. In March 2003, the CLLA presented testimony and a formal position paper before a U.S. Congress subcommittee for meaningful bankruptcy re- form, relative to the pending Bankruptcy Abuse Prevention and CONSUMER PROTECTION Act of 2003, H.R. 975, 108th Cong., 1st Sess. The CLLA maintains more than 40 com- mittees covering various areas of commercial law and other topics, such as world peace through law and world trade. Its activ ities include educational programs on legal issues of PUBLIC INTEREST and importance. Along with the American Bankruptcy Institute, it also sponsors the American Board of Certification (ABC), a non–profit organization that serves to improve and certify attorneys belonging to bankruptcy and creditors’ rights bars. The CLLA has sections on commercial collection agencies and young members, as well as committees on bankruptcy and the UNIFORM COMMERCIAL CODE . It publishes the Commercial Law Journal ten times a year and holds annual meetings, often combining national conferences with those of other prominent organizations, such as the National Association of Credit Management and the Finance, Credit and International Business Association (FCIB). In 1998, the CLLA began holding international credit conferences as well. This internat ional exposure helped increase CLLA membership to more than 3,000 people worldwide as of 2009. Web site: www.ccla.org. FURTHER READINGS Commercial Law League of America. Available online at www.clla.org (accessed November 20, 2009). Miller, Judith Greenstone. 2003. “Bankruptcy Abuse Prevention and Consumer Protection Act of 2003.” FDCH Congressional Testimony. (March 4). CROSS REFERENCES Bankruptcy; Uniform Commercial Code. COMMERCIAL PAPER Commercial paper is a written instrument or document such as a check, draft, promissory note, or a certificate of deposit, that manifest s the pledge or duty of one individual to pay money to another. COMMERCIAL PAPER is ordinarily used in business transactions, since it is a reliable and expedient means of dealing with large sums of money and minimizes the risks inherent in using cash, such as the increased possibility of theft. One of the most significant aspects of commercial paper is that it is negotiable, which means that it can be freely transferred from one party to another, either through endorse- ment or delivery. The terms commerc ial paper and NEGOTIABLE INSTRUMENT can be used inter- changeably. Since commercial paper constitutes PERSONAL PROPERTY , it is transferable by sale or gift and can be loaned, lost, stolen, and taxed. Commercial paper is a specific type of property primarily governed by article 3 of the UNIFORM COMMERCIAL CODE (UCC), which is in effect in all 50 states , the District of Columbia, and the Virgin Islands. Although Louisiana has not enacted all the articles of the UCC, it has adopted article 3. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 16 COMMERCIAL LAW LEAGUE OF AMERICA Types of Commercial Paper The UCC identifies four basic kinds of com- mercial paper: promissory notes, drafts, checks, and certificates of deposit. The most fundamen- tal type of commercial paper is a PROMISSORY NOTE , a written pledge to pay money. A pro- missory note is a two-party paper. The maker is the individual who promises to pay whereas the payee or holder is the person to whom payment is promised. The payee can be either a specifically named individual or merely the bearer of the instrument who has it in his or her physical posse ssion when he or she seeks to be paid according to its terms. A note payable to “bearer” can be paid to the person who presen ts it for remunerat ion. Such an instrument is said to be bearer paper. A promissory note that is payable on demand can be redeemed by the payee at any time, whereas a time note has a date for payment on its face that establishes the date when the holder will have an enforceable right to receive payment under it. There is no obligation to pay a time note until the date designat ed on its face. The ordinary purpose of a promissory note is to borrow money. Promissory notes should not be confused with credit or loan agreements, which are separate instruments that are usually signed at the same time as promissory notes, but which merely describe the terms of the transactions. A promissory note serves as DOCUMENTARY EVIDENCE of a debt. It can be endorsed and sold at a discount to other parties, and each subsequent endorser becomes secondarily liable for the amount specified on the face of the instrument. A number of CONSUMER CREDIT dealings are funded through the use of promis- sory notes. Certain types of promissory notes are sold at a discount, such as U.S. savings bonds and corporation bonds. Such an instrument is sold for an amount below its FACE VALUE and can subsequently be redeemed on the due date or date of maturity for the entire face amount. The interest obtained by the holder of the instru- ment is the difference between the purchase price and the redemption price. In certain instances, bonds that are not redeemed imme- diately upon maturity accumulate interest following the due date and are ultimately worth more than their face value when redeemed at a later time. If such bonds are cashed in before maturity, the holder receives less than the face value. A draft, also known as a BILL OF EXCHANGE,is a three-party paper ordering the payment of money. The drawer is the individual issuing the order to pay, while the drawee is the party to whom the order to pay is given. As in the case of a promissory note, the payee is either a specified individual or the bearer of the draft who is to receive payment according to its term s. The draft is made payable on demand or on a certain date. A common example of a draft is a cashier’s check. A draft is often used in business to obtain payment for items that must be shipped over long distances. Drafts are often the preferred method of payment for purchasers who want to examine goods prior to payment or who do not have the necessary funds available at the time of sale. The vendor might have reserva- tions concerning the buyer’s credit and desire payment as soon as possible. The procedure ordinarily followed in such instances is that upon shipment of the goods, the seller receives a BILL OF LADING from the carrier. The bill of lading Checks are considered a type of commercial paper, as well as a specific kind of bank draft. DENNIS DEGNAN/ CORBIS. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION COMMERCIAL PAPER 17 . the articles of the UCC, it has adopted article 3. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 16 COMMERCIAL LAW LEAGUE OF AMERICA Types of Commercial Paper The UCC identifies four basic kinds of com- mercial. Information Officer Office of Public Affairs Office of Business Liaison Executive Secretariat Office of Policy and Strategic Planning Office of White House Liasion United States Patent and Trademark Office National. RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION 10 COMMERCE DEPARTMENT policy, including the processing of export license and applications