75R11782 DWS-D By Elkins H.B. No. 306 Substitute the following for H.B. No. 306: By Elkins C.S.H.B. No. 306 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the law that applies to activities conducted over the 1-3 Internet. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 35, Business & Commerce Code, is amended 1-6 by adding Subchapter I to read as follows: 1-7 SUBCHAPTER I. INTERNET ACTIVITIES 1-8 Sec. 35.961. DEFINITION. In this subchapter, "Internet" 1-9 means the largest nonproprietary nonprofit cooperative public 1-10 computer network, popularly known as the Internet. 1-11 Sec. 35.962. LAW APPLICABLE TO CONTRACT MADE OVER INTERNET. 1-12 (a) Subject to Subsection (d), this section applies only to a 1-13 contract made solely over the Internet between a person located 1-14 in this state and a person located outside this state who does not 1-15 maintain an office or agent in this state for doing business in 1-16 this state. 1-17 (b) A contract to which this section applies is governed by 1-18 the law of this state unless each party to the contract who is 1-19 located in this state: 1-20 (1) is given notice that the law of the state in which 1-21 another party to the contract is located applies to the contract; 1-22 and 1-23 (2) agrees to the application of that state's law. 1-24 (c) A person asserting that the law of another state applies 2-1 to a contract has the burden of proving that notice was given and 2-2 agreement was obtained as provided by Subsection (b). 2-3 (d) Sections 1.105 and 35.53 do not apply to a contract to 2-4 which this section applies. This section does not apply to a 2-5 contract to which Section 35.51 applies. 2-6 Sec. 35.963. RECIPROCAL SUSPENSION OF STATE LAWS. Except as 2-7 provided by Section 35.962, if a person in another state transmits 2-8 information into this state over the Internet or conducts an 2-9 activity over the Internet in this state and the transmission or 2-10 activity would violate a law of this state, the activity does not 2-11 violate the law of this state if: 2-12 (1) the activity is legal in the state in which the 2-13 person is located; and 2-14 (2) that other state provides for a reciprocal 2-15 recognition of the laws of this state in relation to information 2-16 transmitted or activities conducted over the Internet by a person 2-17 located in this state. 2-18 SECTION 2. Subchapter I, Chapter 35, Business & Commerce 2-19 Code, as added by this Act, applies only to a contract made or 2-20 transmission or activity occurring on or after the effective date 2-21 of this Act. 2-22 SECTION 3. This Act takes effect September 1, 1997. 2-23 SECTION 4. The importance of this legislation and the 2-24 crowded condition of the calendars in both houses create an 2-25 emergency and an imperative public necessity that the 2-26 constitutional rule requiring bills to be read on three several 2-27 days in each house be suspended, and this rule is hereby suspended.