I
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 estab-
lish jurisdictional boundaries over the commercial trans-
actions 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 Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Jurisdictional Cer-
tainty 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 cata-
lyst 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 trans-
actions in digital goods and digital services will seri-
ously impede the growth of such transactions, de-
creasing the viability of electronic commerce as an
alternative instrument or channel of commerce; and
(6) while other types of transactions may de-
serve similar treatment, digital commercial trans-
actions in digital goods and digital services are the
type of transactions that most clearly deserve protec-
tion from disparate, uncoordinated, and inconsistent
cial transaction that is not a digital commercial
transaction; or
(2) to establish any authority for a State or po-
litical subdivision of a State to regulate any commer-
cial 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, su-
persede, 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 de-
livered by means of the Internet.
(2) DIGITAL COMMERCIAL TRANSACTION.—The
term ‘‘digital commercial transaction’’ means a com-
mercial transaction for a digital good or digital serv-
ice that is carried out in its entirety by means of the
Internet.
(3) DIGITAL SERVICE.—The term ‘‘digital serv-
ice’’ means any service that is conducted or provided
by means of the Internet. Such term does not in-
clude 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 tele-
communications facilities, including equipment and
operating software, which comprise the inter-
connected world-wide network of networks that em-
ploy 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 sub-
paragraph (A), such term does not include tak-
ing any government action, pursuant only to
specific statutory authority for such action
under the laws of such State and only on an in-
dividual 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 com-
mercial transaction.
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