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House OKs Net booze limits

The House of Representatives passes a bill that aims to add teeth to state alcohol laws, but only after it was amended to clarify it was not an attack on e-commerce.

The U.S. House of Representatives today passed a bill that aims to add teeth to state alcohol laws, but only after it was amended to clarify it is not an attack on e-commerce.

Introduced by Rep. Joe Scarborough (R-Florida), the Twenty-First Amendment Enforcement Act closes a loophole in the Constitution that prevents authorities from using federal courts to prosecute violations of state alcohol laws. The measure passed by 310 to 112.

A last-minute amendment stipulated that Internet providers and regional Bells would not be held liable if violations of the law occurred over their lines, supporters of the bill said.

Congressional sources who opposed the bill said it was being backed by alcohol wholesalers whose business is threatened by e-commerce sites, which cut out middlemen in sales to consumers.

Thirty-nine states have placed outright bans or restrictions on direct shipment of alcohol, according to a committee report accompanying the bill. But enforcing those state laws frequently can be hampered when local authorities try to prosecute an out-of-state offender. Today's bill would allow prosecutors in all 50 states to try offenders in federal courts, which generally have wider jurisdiction. Previously, the 21st amendment of the Constitution, which overturned Prohibition, prevented those cases from being tried in federal courts.

The bill appears to be the first time Congress has passed legislation aimed at the online sale of alcohol. So far states, led by former New York Attorney General Dennis Vacco, have spearheaded the regulation of the industry, which has grown dramatically as companies such as Virtual Vineyards sell liquor on the Web.

Earlier today, Rep. Christopher Cox (R-California) co-authored an amendment aimed at protecting the budding e-commerce market. In addition to exempting service providers, the amendment also preserves a three-year moratorium on taxes on sales conducted online, which was established by the Cox-sponsored Internet Tax Freedom Act. The California representative nonetheless voted against today's measure.

The bill would apply to the e-commerce companies only when they directly ship alcohol in violation of state laws, said David Stafford, press secretary for Scarborough, the bill's sponsor.

David McClure, executive director of the Association of Online Professionals, said he is not against the bill, since "the amendment clarifies our people are not to be held liable.

"I don't mind if people in that state truly wish not to receive wines by mail," he added. "However, we feel they should stop short of punishing ISPs or even Web site providers who provide that service where it's legal."