SRC-HRD H.B. 306 75(R) BILL ANALYSIS Senate Research Center H.B. 306 By: Elkins (Ellis) Jurisprudence 5-18-97 Engrossed DIGEST Currently, Texas law provides no statutes regarding interstate contractual transactions made over the Internet. As proposed, H.B. 306 would provide that a contract made solely over the Internet between a person located in this state and a person located outside this state is governed by the law of this state unless otherwise agreed to by each party. PURPOSE As proposed, H.B. 306 provides that a contract made solely over the Internet between a person located in this state and a person located outside this state is governed by the law of this state unless otherwise agreed to by each party. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 35, Business & Commerce Code, by adding Subchapter I, as follows: SUBCHAPTER I. INTERNET ACTIVITIES Sec. 35.961. DEFINITION. Defines "Internet." Sec. 35.962. LAW APPLICABLE TO CONTRACT MADE OVER INTERNET. Provides that this section applies only to a contract, subject to Subsection (d), made solely over the Internet between a person located in this state and a person located outside this state who does not maintain an office or agent in this state for doing business in this state. Provides that a contract to which this section applies is governed by the law of this state except under certain conditions. Provides that a person asserting that the law of another state applies to a contract has the burden of proving that notice was given and agreement was obtained as provided by Subsection (b). Provides that Sections 1.105 and 35.53 do not apply to a contract to which this section applies. Provides that this section does not apply to a contract to which Section 35.51 applies. Sec. 35.963. RECIPROCAL SUSPENSION OF STATE LAWS. Provides that except as provided by Section 35.962, if a person in another state transmits information into this state over the Internet or conducts an activity over the Internet in this state and the transmission or activity would violate a law of this state, the activity does not violate the law of this state under certain conditions. SECTION 2. Makes application of this Act prospective. SECTION 3. Effective date: September 1, 1997. SECTION 4. Emergency clause.