H 5020 Session 112 (1997-1998)
H 5020 General Bill, By Harrison
Similar(S 1167)
A BILL TO AMEND TITLE 26, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING
CHAPTER 5 SO AS TO ENACT THE "SOUTH CAROLINA ELECTRONIC COMMERCE ACT" WHICH
PROVIDES FOR THE LEGAL STATUS OF ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES,
AND AUTHORIZES THE BUDGET AND CONTROL BOARD AND SECRETARY OF STATE TO
PROMULGATE REGULATIONS RELATED TO ELECTRONIC COMMERCE.
04/14/98 House Introduced and read first time HJ-21
04/14/98 House Referred to Committee on Labor, Commerce and
Industry HJ-21
05/13/98 House Committee report: Favorable Labor, Commerce and
Industry HJ-9
05/19/98 House Recommitted to Committee on Labor, Commerce and
Industry HJ-42
COMMITTEE REPORT
May 13, 1998
H. 5020
Introduced by Rep. Harrison
S. Printed 5/13/98--H.
Read the first time April 14, 1998.
THE COMMITTEE ON
LABOR, COMMERCE AND INDUSTRY
To whom was referred a Bill (H. 5020), to amend Title 26, Code of
Laws of South Carolina, 1976, by adding Chapter 5 so as to enact the
"South Carolina Electronic Commerce Act", etc.,
respectfully
REPORT:
That they have duly and carefully considered the same, and
recommend that the same do pass:
HARRY F. CATO, for Committee.
A BILL
TO AMEND TITLE 26, CODE OF LAWS OF SOUTH
CAROLINA, 1976, BY ADDING CHAPTER 5 SO AS TO ENACT
THE "SOUTH CAROLINA ELECTRONIC COMMERCE
ACT" WHICH PROVIDES FOR THE LEGAL STATUS OF
ELECTRONIC RECORDS AND ELECTRONIC SIGNATURES,
AND AUTHORIZES THE BUDGET AND CONTROL BOARD
AND SECRETARY OF STATE TO PROMULGATE
REGULATIONS RELATED TO ELECTRONIC COMMERCE.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Title 26 of the 1976 Code is amended by adding:
"CHAPTER 5
South Carolina Electronic Commerce Act
Article 1
Title, Interpretation, and Definitions
Section 26-5-10. This chapter is known as the 'South Carolina
Electronic Commerce Act'.
Section 26-5-20. The purpose of this chapter is to:
(1) facilitate and promote electronic commerce and online
government by clarifying the legal status of electronic records and
electronic signatures in the context of writing and signing
requirements imposed by law;
(2) permit and encourage the continued expansion of electronic
commerce and online government through the operation of free
market forces rather than proscriptive legislation;
(3) promote public confidence in the validity, integrity, and
reliability of electronic commerce and online government; and
(4) promote the development of the legal and business
infrastructure necessary to support and encourage electronic
commerce and online government.
Section 26-5-30. As used in this chapter:
(1) 'Contract' means a contract for the sale of goods or services, for
the sale or license of digital information, or for the lease of tangible
personal property.
(2) 'Electronic' means electrical, digital, magnetic, optical,
electromagnetic, biometric, or any other technology that is similar to
these technologies.
(3) 'Electronic record' means a record generated, communicated,
received, or stored by electronic means.
(4) 'Electronic signature' means any identifier or authentication
technique attached to or logically associated with an electronic record
that is intended by the party using it to have the same force and effect
as a manual signature.
(5) 'Record' means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(6) 'Rule of law' means a statute, regulation, ordinance,
common-law rule, court decision, or other law enacted, established,
or promulgated by the State or any agency, commission, department,
court, other authority, or political division or subdivision of the State
and relating to transactions by public or private entities.
(7) 'Security procedure' means a methodology or procedure for the
purpose of:
(a) preventing access by unauthorized parties;
(b) verifying that an electronic record or an electronic signature
is that of a specific party or created by a specific electronic point of
origin; or
(c) detecting error or alteration in the communication, content,
or storage of an electronic record since a specific point in time.
Section 26-5-40. (A) Notwithstanding any other provision of
law, the provisions of this chapter apply to records generated, stored,
processed, communicated, or used for any purpose by or with:
(1) Public entity activity Public entities of the State including
state agencies, boards, commissions, or institutions; or local political
subdivisions including cities, counties, school districts, or public
service districts. Nothing in this section requires any public entity to
use or permit the use of electronic records or electronic signatures.
(2) Private entity activity Private, commercial entities for
transactions including contracts and recordkeeping. Nothing in this
section requires any private entity to use or permit the use of
electronic records or electronic signatures.
(B) Contracts A contract between public and/or private entities is
not unenforceable, nor inadmissable in evidence, on the sole ground
that the contract is evidenced by an electronic record or that it has
been signed with an electronic signature.
Section 26-5-50. (A) The South Carolina Budget and Control
Board is authorized to promulgate regulations to coordinate, create,
implement, and facilitate the use of common approaches and
technical infrastructure, as appropriate, to enhance the utilization of
electronic records, electronic signatures, and security procedures by
and for local political subdivisions consenting to be governed by such
authority and public entities of the State.
(B) The Secretary of State is authorized to develop, implement,
and facilitate the use of model procedures for the use of electronic
records, electronic signatures, and security procedures for all other
purposes, including private commercial transactions and contracts.
The Secretary of State is also authorized to promulgate methods,
means, and standards for secure electronic transactions including
administration by the Secretary of State and/or the licensing of third
parties to serve in such capacity.
(C) No action in this section is required as a prerequisite to
conduct business pursuant to Sections 26-5-510 or 26-5-520.
Article 3
Electronic Signatures and Records Generally
Section 26-5-310. A record may not be denied legal effect,
validity, or enforceability solely because it is in the form of an
electronic record or signature.
Section 26-5-320. (A) An electronic record satisfies any rule of
law requiring a record to be in writing or providing consequences if
it is not in writing.
(B) This section does not apply:
(1) to the extent that its application would result in a
construction of law that is clearly inconsistent with the manifest
intent of the lawmaking body or repugnant to the context of the same
rule of law. However, the mere requirement that information be 'in
writing', 'written', 'printed', or 'signed' or any other word that purports
to specify or require a particular communication medium is not by
itself sufficient to establish such intent; or
(2) to any record that serves as a unique and transferable
physical token of rights and obligations, including negotiable
instruments and other instruments of title where possession of the
instrument is deemed to confer title.
Section 26-5-330. (A) An electronic signature satisfies any rule
of law requiring a signature or providing consequences if a document
is not signed.
(B) An electronic record is signed as a matter of law if it contains
a secure electronic signature. Otherwise, a signature may be proved
in any manner, including by showing that a procedure existed by
which a party must of necessity have executed a symbol in order to
proceed further in the use or processing of information.
(C) This section does not apply:
(1) to the extent that its application would involve a
construction of law that is clearly inconsistent with the manifest
intent of the lawmaking body or repugnant to the context of the same
rule of law. However, the mere requirement of a 'signature' or that a
record be 'signed' is not by itself sufficient to establish such intent; or
(2) to any record that serves as a unique and transferable
physical token of rights and obligations, including negotiable
instruments and other instruments of title where possession of the
instrument is deemed to confer title.
Section 26-5-340. If a rule of law requires a record to be presented
or retained in its original form, or provides consequences for the
record not being presented or retained in its original form, that
requirement is met by an electronic record if there exists a reliable
assurance that the information has remained complete and unaltered,
apart from additional endorsements or changes that arise in the
normal course of communication, storage, or display.
Section 26-5-350. In any legal proceeding, an electronic record or
electronic signature is not inadmissible in evidence under the Rules
of Evidence on the sole ground that it is:
(1) an electronic record or electronic signature;
(2) not in its original form or is not an original; or
(3) recognized and approved pursuant to Section 26-5-50.
Section 26-5-360. If a rule of law requires that a record be
retained, that requirement is met by retaining an electronic record if
it accurately reproduces the original record as it existed at the time in
question and for so long as may be required by law. Nothing in this
section precludes any federal or state agency from specifying
additional requirements for the retention of records, either written or
electronic, that are subject to that agency's jurisdiction.
Article 5
Secure Electronic Records and Signatures
Section 26-5-510. An electronic signature is deemed to be secure
if:
(1) it is created by application of a security procedure that is
commercially reasonable and agreed to by the parties;
(2) the electronic signature can be verified by use of a procedure
that is recognized and approved pursuant to Section 26-5-50; or
(3) when not previously agreed to by the parties, the electronic
signature is:
(a) unique to the party using it;
(b) capable of identifying such party;
(c) created in a manner or using a means under the sole control
of the party using it; and
(d) linked to the electronic record to which it relates in a manner
such that if the record is changed the electronic signature is
invalidated.
Section 26-5-520. An electronic record is deemed to be secure if:
(1) it is created by application of a security procedure that is
commercially reasonable and agreed to by the parties;
(2) the electronic record can be verified by use of a procedure that
is recognized and approved pursuant to Section 26-5-50; or
(3) the electronic record can be verified not to have been altered
since a specified point in time.
Section 26-5-530. (A) In resolving a civil dispute involving a
secure electronic record, it is rebuttably presumed that the electronic
record has not been altered since the specific point in time to which
the secure status relates.
(B) In resolving a dispute involving a secure electronic signature,
it is rebuttably presumed that the secure electronic signature:
(1) is the signature of the party to whom it correlates; and
(2) was affixed by that party with the intention of signing the
electronic record.
(C) The effect of presumptions provided in this section is to place
on the party challenging the integrity of a secure electronic record or
challenging the genuineness of a secure electronic signature both the
burden of going forward with evidence to rebut the presumption and
the burden of persuading the trier of fact that the nonexistence of the
presumed fact is more probable than its existence.
(D) In the absence of a secure electronic record or a secure
electronic signature, nothing in this chapter changes existing rules
regarding legal or evidentiary rules regarding the burden of proving
the authenticity and integrity of an electronic record or an electronic
signature.
Section 26-5-540. The status of an electronic record or an
electronic signature as secure may be challenged by evidence:
(1) indicating that the security procedure agreed to between the
parties is not commercially reasonable or was not implemented in a
trustworthy manner; or
(2) that a security procedure not agreed to by the parties was not
trustworthy because it was not:
(a) unique to the party using it;
(b) capable of identifying such party;
(c) created in a manner or using a means under the sole control
of the party using it; or
(d) linked to the electronic record to which it related in a
manner such that if the record was changed the electronic signature
would be invalidated."
SECTION 2. This act takes effect upon approval by the Governor.
-----XX----- |