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[DOCID: f:h2421ih.txt]






107th CONGRESS
  1st Session
                                H. R. 2421

   To exercise authority under article I, section 8, clause 3 of the 
 Constitution of the United States to clearly establish jurisdictional 
   boundaries over the commercial transactions of digital goods and 
 services conducted through the Internet, and to foster stability and 
           certainty over the treatment of such transactions.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 28, 2001

Mr. Stearns (for himself, Mr. Towns, Mr. Bass, Mr. Deal of Georgia, and 
 Mr. Walden) introduced the following bill; which was referred to the 
 Committee on Energy and Commerce, and in addition to the Committee on 
   the Judiciary, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To exercise authority under article I, section 8, clause 3 of the 
 Constitution of the United States to clearly establish jurisdictional 
   boundaries over the commercial transactions of digital goods and 
 services conducted through the Internet, and to foster stability and 
           certainty over the treatment of such transactions.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Jurisdictional Certainty Over 
Digital Commerce Act''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) the Internet is increasingly used to conduct commercial 
        transactions in digital goods and digital services wholly 
        deliverable by and on the Internet;
            (2) jurisdictional certainty is an important catalyst to 
        further advancement of electronic commerce;
            (3) digital commercial transactions in digital goods and 
        digital services are inherently interstate in nature;
            (4) State regulation of such digital commercial 
        transactions creates significant and harmful burdens on 
        interstate commerce;
            (5) State regulation of digital commercial transactions in 
        digital goods and digital services will seriously impede the 
        growth of such transactions, decreasing the viability of 
        electronic commerce as an alternative instrument or channel of 
        commerce; and
            (6) while other types of transactions may deserve similar 
        treatment, digital commercial transactions in digital goods and 
        digital services are the type of transactions that most clearly 
        deserve protection from disparate, uncoordinated, and 
        inconsistent efforts by the States to regulate Interstate 
        commerce.

SEC. 3. FEDERAL AUTHORITY TO REGULATE COMMERCE IN DIGITAL GOODS AND 
              SERVICES.

    (a) In General.--Responsibility and authority to regulate digital 
commercial transactions is reserved solely to the Federal Government.
    (b) Prohibition of State Regulation.--No State or political 
subdivision thereof may enact or enforce any law, rule, regulation, 
standard, or other provision having the force or effect of law that 
regulates, or has the effect of regulating, digital commercial 
transactions.
    (c) Prohibition of Delegation to States.--Any responsibility or 
authority to regulate digital commercial transactions that, pursuant to 
subsection (a), is retained by the Federal government may not be 
delegated, by any Federal agency or officer, to any State or political 
subdivision thereof.
    (d) Inapplicability to Non-Digital Commercial Transactions.--This 
Act may not be construed--
            (1) to modify, impair, or supersede, or to authorize the 
        modification, impairment, or superseding of, any authority that 
        any State or any political subdivision thereof may have to 
        regulate any commercial transaction that is not a digital 
        commercial transaction; or
            (2) to establish any authority for a State or political 
        subdivision of a State to regulate any commercial transaction 
        that is not a digital commercial transaction, in contravention 
        of any limitation on such authority established under law 
        (including any statute, regulation, rule, or judicial 
        decision).
    (e) Inapplicability to State Commercial Code.--This Act may not be 
construed to limit, alter, supersede, or otherwise affect any 
requirement under the Uniform Commercial Code, as in effect in any 
State.
    (f) Definitions.--For purposes of this section:
            (1) Digital good.--The term ``digital good'' means any good 
        or product that is transferred or delivered by means of the 
        Internet.
            (2) Digital commercial transaction.--The term ``digital 
        commercial transaction'' means a commercial transaction for a 
        digital good or digital service that is carried out in its 
        entirety by means of the Internet.
            (3) Digital service.--The term ``digital service'' means 
        any service that is conducted or provided by means of the 
        Internet. Such term does not include any telecommunications 
        service, as such term is defined in section 3 of the 
        Communications Act of 1934 (47 U.S.C. 153), or the business of 
        insurance.
            (4) Internet.--The term ``Internet'' means collectively the 
        myriad of computer and telecommunications facilities, including 
        equipment and operating software, which comprise the 
        interconnected world-wide network of networks that employ the 
        Transmission Control Protocol/Internet Protocol, or any 
        predecessor or successor protocols to such protocol, to 
        communicate information of all kinds by wire or radio.
            (5) Regulate.--
                    (A) In general.--The term ``regulate'' includes, 
                with respect to a digital commercial transaction, 
                taking any governmental action that restricts, 
                prohibits, limits, or burdens, or imposes any obstacle 
                or interference with, such a transaction.
                    (B) Exclusion.--Notwithstanding subparagraph (A), 
                such term does not include taking any government 
                action, pursuant only to specific statutory authority 
                for such action under the laws of such State and only 
                on an individual case-by-case basis, in order to 
                protect a party to a digital commercial transaction 
                from--
                            (i) a specific and identified threat to the 
                        health or physical safety of such party; or
                            (ii) fraudulent or criminal activity 
                        against such party.
                This subparagraph may not be used by a State or 
                political subdivision thereof to regulate, in a general 
                manner, the parties to a digital commercial 
                transaction.
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