STAND. COM. REP. NO. 3265

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2585
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Commerce and Consumer Protection and
Education and Technology, to which was referred H.B. No. 2585,
H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE UNIFORM ELECTRONIC
     TRANSACTIONS ACT,"

beg leave to report as follows:

     The purpose of this measure is to facilitate electronic
commerce in the State.

     Testimony on the measure was received from the Office of the
Lieutenant Governor, Department of Commerce and Consumer Affairs,
Department of Accounting and General Services, Governor's Special
Advisor on Technology Development, Hawaii Commission on Uniform
State Laws, American Council of Life Insurers, State Farm
Insurance Companies, Hawaii Insurers Council, and Hawaii
Technology Trade Association.

     This measure adopts the Uniform Electronic Transactions Act
(UETA) which establishes the legal validity of electronic
records, signatures, and contracts.  The UETA was promulgated by
the National Conference of Commissioners on Uniform State Law in
1999 and represents the first national effort to provide uniform
rules governing transactions in electronic commerce.  

     The Act does not mandate the use of electronic signatures or
records, but establishes procedural guidelines for their use, and

 
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only applies when parties have agreed to an electronic
transaction.  Adoption of the UETA will help to move forward the
governor's high tech initiatives, including the Access Hawaii
Portal, and will make it easier for companies to do business in
Hawaii.

     Your Committees note that UETA authorizes the states to
prohibit the use of electronic transactions in certain types of
transactions.  This measure is modeled after the California
version of the UETA, which was the first UETA enacted in the
nation, and which differs from the final model approved by the
Uniform Law Commissioners that has been adopted in other states.
The California legislature, in response to the concerns of
consumer groups, adopted a more restrictive version of UETA than
the final version approved by the Uniform Law Commissioners.

     Your Committees find that exceptions to the UETA should be
narrowly defined so as to facilitate the free flow of commerce
and to allow parties who agree to use an electronic transaction
to avail themselves of a more convenient and expeditious method
of conducting business.  Therefore, your Committees have amended
this measure by:

     (1)  Deleting provisions establishing and referencing
          exceptions to the Act in section   -3 of the new
          chapter; and

     (2)  Making a technical, nonsubstantive amendment.

     Your Committees further find that continued discussion of
this measure is necessary in order to develop a law that does not
unnecessarily restrict the use of electronic transactions and
that is consistent with the final version of UETA.  Therefore,
while language in the measure relating to exclusions from the Act
has been deleted, it is your Committees' intent, once the scope
of the exclusions contemplated by the final version of the Act
has been clarified, to insert into the measure an appropriate
exclusions provision during conference committee.

     As affirmed by the records of votes of the members of your
Committees on Commerce and Consumer Protection and Education and
Technology that are attached to this report, your Committees are
in accord with the intent and purpose of H.B. No. 2585, H.D. 1,
as amended herein, and recommend that it pass Second Reading in
the form attached hereto as H.B. No. 2585, H.D. 1, S.D. 1, and be
placed on the calendar for Third Reading.


 
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Commerce and
                                   Consumer Protection and
                                   Education and Technology,



____________________________       ______________________________
DAVID Y. IGE, Chair                BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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