H. B. No. 188 As Introduced

Representatives Buehrer, Seaver, Brinkman, White, D. Evans

A BILL

To amend section 1306.20 and to enact sections 1
1306.25 to 1306.29 of the Revised Code to adopt 2
the Electronic Government Services Act to prohibit 3
a government agency from providing duplicative or 4
competing electronic commerce services with the 5
private sector unless the government agency 6
complies with specified procedures. 7

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That section 1306.20 be amended and sections 8
1306.25, 1306.26, 1306.27, 1306.28, and 1306.29 of the Revised 9
Code be enacted to read as follows: 10

       Sec. 1306.20. (A) Subject to section 1306.11 and to sections 11
1306.25 to 1306.29 of the Revised Code, each state agency shall 12
determine if, and the extent to which, it will send and receive 13
electronic records and electronic signatures to and from other 14
persons and otherwise create, generate, communicate, store, 15
process, use, and rely upon electronic records and electronic 16
signatures. 17

       (B)(1) Subject to division (B)(2) of this section, a state 18
agency may waive a requirement in the Revised Code, other than a 19
requirement in sections 1306.01 to 1306.15 of the Revised Code, 20
that relates to any of the following: 21

       (a) The method of posting or displaying records; 22

       (b) The manner of sending, communicating, or transmitting 23
records; 24

       (c) The manner of formatting records. 25

       (2) A state agency may exercise its authority to waive a 26
requirement under division (B)(1) of this section only if the 27
following apply: 28

       (a) The requirement relates to a matter over which the state 29
agency has jurisdiction;. 30

       (b) The waiver is consistent with criteria set forth in rules 31
adopted by the state agency. The criteria, to the extent 32
reasonable under the circumstances, shall contain standards to 33
facilitate the use of electronic commerce by persons under the 34
jurisdiction of the state agency consistent with rules adopted by 35
the department of administrative services pursuant to division (A) 36
of section 1306.21 of the Revised Code. 37

       (C) If a state agency creates, uses, receives, or retains 38
electronic records, both of the following apply: 39

       (1) Any rules adopted by a state agency relating to 40
electronic records shall be consistent with rules adopted by the 41
department of administrative services pursuant to division (A) of 42
section 1306.21 of the Revised Code. 43

       (2) Each state agency shall create, use, receive, and retain 44
electronic records in accordance with section 149.40 of the 45
Revised Code. 46

       (D) If a state agency creates, uses, or receives electronic 47
signatures, the state agency shall create, use, or receive the 48
signatures in accordance with rules adopted by the department of 49
administrative services pursuant to division (A) of section 50
1306.21 of the Revised Code. 51

       (E)(1) To the extent a state agency retains an electronic 52
record, the state agency may retain a record in a format that is 53
different from the format in which the record was originally 54
created, used, sent, or received only if it can be demonstrated 55
that the alternative format used accurately and completely 56
reflects the record as it was originally created, used, sent, or 57
received. 58

       (2) If a state agency in retaining any set of electronic 59
records pursuant to division (E)(1) of this section alters the 60
format of the records, the state agency shall create a certificate 61
of authenticity for each set of records that is altered. 62

       (3) The department of administrative services, in 63
consultation with the state archivist, shall adopt rules in 64
accordance with section 111.15 of the Revised Code that establish 65
the methods for creating certificates of authenticity pursuant to 66
division (E)(2) of this section. 67

       (F) Whenever any rule of law requires or authorizes the 68
filing of any information, notice, lien, or other document or 69
record with any state agency, a filing made by an electronic 70
record shall have the same force and effect as a filing made on 71
paper in all cases where the state agency has authorized or agreed 72
to ~~such~~that electronic filing and the filing is made in 73
accordance with applicable rules or an applicable agreement. 74

       (G) Nothing in sections 1306.01 to 1306.23 of the Revised 75
Code shall be construed to require any state agency to use or 76
permit the use of electronic records and electronic signatures. 77

       (H)~~(1) Notwithstanding division (C)(1) or (D) of this~~ 78
~~section, any state agency that, prior to the effective date of~~ 79
~~this section, used or permitted the use of electronic records or~~ 80
~~electronic signatures pursuant to laws enacted, rules adopted, or~~ 81
~~agency policies adopted before the effective date of this section,~~ 82
~~may use or permit the use of electronic records or electronic~~ 83
~~signatures pursuant to those previously enacted laws, adopted~~ 84
~~rules, or adopted policies for a period of two years after the~~ 85
~~effective date of this section.~~ 86

       ~~(2) Subject to division (H)(3) of this section, after the~~ 87
~~two-year period described in division (H)(1) of this section has~~ 88
~~concluded, all~~All state agencies that ~~use~~used or ~~permit~~ 89
permitted the use of electronic records or electronic signatures 90
before ~~the effective date of this section~~September 14, 2000, 91
shall only use or permit the use of electronic records or 92
electronic signatures consistent with rules adopted by the 93
department of administrative services pursuant to division (A) of 94
section 1306.21 of the Revised Code. The 95

       ~~(3) After the two-year period described in division (H)(1) of~~ 96
~~this section has concluded, the~~ department ~~of administrative~~ 97
~~services~~ may permit a state agency to use electronic records or 98
electronic signatures that do not comply with ~~division (H)(2) of~~ 99
this ~~section~~requirement, however, if the state agency files a 100
written request with the department. 101

       (I) For the purposes of this section, "state agency" means 102
every organized body, office, or agency established by the laws of 103
the state for the exercise of any function of state government, 104
but does not include the general assembly, any legislative agency, 105
the supreme court, ~~the~~ other courts of record in this state, or 106
any judicial agency. 107

       Sec. 1306.25. As used in sections 1306.25 to 1306.29 of the 108
Revised Code: 109

       (A) "Commercial activity" means performing services or 110
providing goods that normally can be obtained from a private 111
enterprise. 112

        (B) "Direct costs" mean all costs, whether capital costs, 113
operating costs, or otherwise, that would be eliminated if the 114
service or function to which the costs relate is discontinued. 115

        (C) "Electronic commerce services" mean services relating to 116
commercial activity that are the same as, similar to, or overlap 117
information technology-based services provided to the public by 118
two or more competing private enterprises. "Electronic commerce 119
services" includes services made in connection with a transaction 120
completed over a computer network, such as the buying of goods or 121
services over the internet. 122

        (D) "Full cost accounting" means, in accordance with 123
generally accepted accounting principles, accounting for all 124
direct costs and indirect costs that are incurred in the 125
ownership, management, or operation of electronic commerce 126
services. 127

        (E) "Government agency" means either of the following: 128

        (1) A state agency as defined in section 117.01 of the 129
Revised Code or a similar agency of a county, township, municipal 130
corporation, or other political subdivision of this state; 131

       (2) Any entity that is not majority-owned as private property 132
and is established by law or by order or action of a state agency 133
or similar agency of a county, township, municipal corporation, or 134
other political subdivision of this state, or an officer of such a 135
state or similar agency. 136

        (F) "Indirect costs" means all costs, whether capital costs, 137
operating costs, or otherwise, that are not direct costs. 138

        (G) "Private enterprise" means an individual, firm, 139
partnership, joint venture, corporation, association, limited 140
liability company, or other legal entity engaging, in the private 141
sector, in the manufacturing, processing, sale, offering for sale, 142
rental, leasing, delivery, dispensing, distributing, or 143
advertising of goods or services for profit. 144

       Sec. 1306.26. (A) The general assembly finds and declares 145
that the growth of private enterprises is essential to the health, 146
welfare, and prosperity of this state and that government competes 147
with the private sector when it provides goods and services to the 148
public. 149

       (B) It is the intent of the general assembly and the purpose 150
of sections 1306.25 to 1306.29 of the Revised Code to protect 151
economic opportunities for the private sector against unfair 152
competition by government agencies and to enhance the efficient 153
provision of goods and services to the public. 154

        (C) Sections 1306.25 to 1306.29 of the Revised Code may be 155
cited as the "electronic government services act." 156

       Sec. 1306.27. (A) Except as provided in section 1306.28 of 157
the Revised Code, if two or more competing private enterprises 158
provide electronic commerce services, a government agency shall 159
not engage, through the expenditure of public moneys, in any 160
activity to provide or offer those electronic commerce services to 161
the public or expand similar electronic commerce services to the 162
public. 163

       (B) Any provider of electronic commerce services that resides 164
or does business in this state has standing to commence a civil 165
action in a court of competent jurisdiction, and has a cause of 166
action for appropriate relief, to challenge the provision of 167
electronic commerce services by a government agency that is not in 168
accordance with sections 1306.25 to 1306.29 of the Revised Code. 169

        (C) Nothing in sections 1306.25 to 1306.29 of the Revised 170
Code prohibits a government agency from providing electronic 171
commerce services to the public in the absence of two or more 172
competing private enterprises providing those services. 173

       Sec. 1306.28. (A) A government agency may provide duplicative 174
or competing electronic commerce services to the public if the 175
agency complies with this section. 176

       (B) Before a government agency provides duplicative or 177
competing electronic commerce services to the public, it shall 178
hold a public hearing to allow public comment about the agency's 179
proposed electronic commerce services. The government agency shall 180
provide at least thirty days' public notice of the time and place 181
of the public hearing in one or more newspapers of general 182
circulation in the county or counties within its jurisdiction. 183
During the thirty-day period before the public hearing, the 184
government agency shall make its proposal for providing 185
duplicative or competing electronic commerce services to the 186
public available for public inspection in a prominent public 187
location within the county or counties where the public notice is 188
provided. 189

        (C) The public notice described in division (B) of this 190
section also shall set forth all of the following: 191

        (1) The government agency's proposed findings of fact and 192
conclusions of law describing the reasons why it believes it is 193
necessary and in the public interest to provide duplicative or 194
competing electronic commerce services to the public and citing 195
the legal authority that permits the government agency to do so; 196

        (2) The initial and total lifecycle costs of the proposed 197
duplicative or competing electronic commerce services, which 198
include, but are not limited to, all technology, infrastructure, 199
services, contracts, and direct or indirect personnel costs; 200

        (3) The individual per taxpayer cost of the proposed 201
duplicative or competing electronic commerce services on an 202
annualized basis and the cost of these services per user on an 203
annualized basis; 204

        (4) The government agency's reasons for believing that the 205
cost benefits of providing duplicative or competing electronic 206
commerce services require the expenditure of public moneys; 207

        (5) An identification of unmet needs in the consumer 208
marketplace that the proposed duplicative or competing electronic 209
commerce services would fulfill; 210

        (6) A description of how the proposed duplicative or 211
competing electronic commerce services would differ from those 212
provided by two or more competing private enterprises; 213

        (7) An economic impact analysis demonstrating that the 214
offering of the proposed duplicative or competing electronic 215
commerce services by the government agency will not be 216
anticompetitive in its effect on the existing industry and will 217
not adversely impact or distort the marketplace of two or more 218
competing private enterprises providing the same or similar 219
electronic commerce services. 220

       (D)(1) After reviewing comments from the public following the 221
public hearing described in this section, if the head of a 222
government agency decides to proceed with offering duplicative or 223
competing electronic commerce services to the public, the head of 224
the government agency shall sign factual and legal conclusions 225
addressing the comments and each of the factors set forth in the 226
public notice described in division (C) of this section and send a 227
written notice to the controlling board that sets forth these 228
conclusions and the government agency's decision to proceed. 229

        (2) A government agency shall not offer duplicative or 230
competing electronic commerce services to the public without the 231
approval of the controlling board. 232

       (3) The controlling board may continue to exercise oversight 233
with respect to any approval decision it makes under division 234
(D)(2) of this section. 235

        (E) Any government agency providing electronic commerce 236
services in a jurisdiction where a private enterprise provides the 237
same electronic commerce services shall prepare and publish an 238
annual report about its electronic commerce services. The annual 239
report substantially shall be in accordance with full cost 240
accounting and shall disclose the amount, source, and cost of 241
working capital utilized by the government agency for providing 242
electronic commerce services. 243

        (F) For purposes of providing the public notice and preparing 244
and publishing the annual report described in this section, a 245
government agency, by any reasonable method consistent with 246
applicable generally accepted accounting principles, shall 247
allocate indirect costs that support multiple electronic commerce 248
services or functions among those services and functions in 249
proportion to the relative burden each service or function places 250
on the cost category. 251

       Sec. 1306.29. Sections 1306.25 to 1306.28 of the Revised 252
Code do not affect the responsibilities of a government agency to 253
prepare and make public records available for inspection and 254
copying in accordance with section 149.43 of the Revised Code. 255

       Section 2. That existing section 1306.20 of the Revised Code 256
is hereby repealed. 257

Section 1. That section 1306.20 be amended and sections	8
1306.25, 1306.26, 1306.27, 1306.28, and 1306.29 of the Revised	9
Code be enacted to read as follows:	10

Sec. 1306.20. (A) Subject to section 1306.11 and to sections	11
1306.25 to 1306.29 of the Revised Code, each state agency shall	12
determine if, and the extent to which, it will send and receive	13
electronic records and electronic signatures to and from other	14
persons and otherwise create, generate, communicate, store,	15
process, use, and rely upon electronic records and electronic	16
signatures.	17

(B)(1) Subject to division (B)(2) of this section, a state	18
agency may waive a requirement in the Revised Code, other than a	19
requirement in sections 1306.01 to 1306.15 of the Revised Code,	20
that relates to any of the following:	21

(b) The manner of sending, communicating, or transmitting	23
records;	24

(2) A state agency may exercise its authority to waive a	26
requirement under division (B)(1) of this section only if the	27
following apply:	28

(a) The requirement relates to a matter over which the state	29
agency has jurisdiction;.	30

(b) The waiver is consistent with criteria set forth in rules	31
adopted by the state agency. The criteria, to the extent	32
reasonable under the circumstances, shall contain standards to	33
facilitate the use of electronic commerce by persons under the	34
jurisdiction of the state agency consistent with rules adopted by	35
the department of administrative services pursuant to division (A)	36
of section 1306.21 of the Revised Code.	37

(C) If a state agency creates, uses, receives, or retains	38
electronic records, both of the following apply:	39

(1) Any rules adopted by a state agency relating to	40
electronic records shall be consistent with rules adopted by the	41
department of administrative services pursuant to division (A) of	42
section 1306.21 of the Revised Code.	43

(2) Each state agency shall create, use, receive, and retain	44
electronic records in accordance with section 149.40 of the	45
Revised Code.	46

(D) If a state agency creates, uses, or receives electronic	47
signatures, the state agency shall create, use, or receive the	48
signatures in accordance with rules adopted by the department of	49
administrative services pursuant to division (A) of section	50
1306.21 of the Revised Code.	51

(E)(1) To the extent a state agency retains an electronic	52
record, the state agency may retain a record in a format that is	53
different from the format in which the record was originally	54
created, used, sent, or received only if it can be demonstrated	55
that the alternative format used accurately and completely	56
reflects the record as it was originally created, used, sent, or	57
received.	58

(2) If a state agency in retaining any set of electronic	59
records pursuant to division (E)(1) of this section alters the	60
format of the records, the state agency shall create a certificate	61
of authenticity for each set of records that is altered.	62

(3) The department of administrative services, in	63
consultation with the state archivist, shall adopt rules in	64
accordance with section 111.15 of the Revised Code that establish	65
the methods for creating certificates of authenticity pursuant to	66
division (E)(2) of this section.	67

(F) Whenever any rule of law requires or authorizes the	68
filing of any information, notice, lien, or other document or	69
record with any state agency, a filing made by an electronic	70
record shall have the same force and effect as a filing made on	71
paper in all cases where the state agency has authorized or agreed	72
to ~~such~~that electronic filing and the filing is made in	73
accordance with applicable rules or an applicable agreement.	74

(G) Nothing in sections 1306.01 to 1306.23 of the Revised	75
Code shall be construed to require any state agency to use or	76
permit the use of electronic records and electronic signatures.	77

(H)~~(1) Notwithstanding division (C)(1) or (D) of this~~	78
~~section, any state agency that, prior to the effective date of~~	79
~~this section, used or permitted the use of electronic records or~~	80
~~electronic signatures pursuant to laws enacted, rules adopted, or~~	81
~~agency policies adopted before the effective date of this section,~~	82
~~may use or permit the use of electronic records or electronic~~	83
~~signatures pursuant to those previously enacted laws, adopted~~	84
~~rules, or adopted policies for a period of two years after the~~	85
~~effective date of this section.~~	86

~~(2) Subject to division (H)(3) of this section, after the~~	87
~~two-year period described in division (H)(1) of this section has~~	88
~~concluded, all~~All state agencies that ~~use~~used or ~~permit~~	89
permitted the use of electronic records or electronic signatures	90
before ~~the effective date of this section~~September 14, 2000,	91
shall only use or permit the use of electronic records or	92
electronic signatures consistent with rules adopted by the	93
department of administrative services pursuant to division (A) of	94
section 1306.21 of the Revised Code. The	95

~~(3) After the two-year period described in division (H)(1) of~~	96
~~this section has concluded, the~~ department ~~of administrative~~	97
~~services~~ may permit a state agency to use electronic records or	98
electronic signatures that do not comply with ~~division (H)(2) of~~	99
this ~~section~~requirement, however, if the state agency files a	100
written request with the department.	101

(I) For the purposes of this section, "state agency" means	102
every organized body, office, or agency established by the laws of	103
the state for the exercise of any function of state government,	104
but does not include the general assembly, any legislative agency,	105
the supreme court, ~~the~~ other courts of record in this state, or	106
any judicial agency.	107

Sec. 1306.25. As used in sections 1306.25 to 1306.29 of the	108
Revised Code:	109

(A) "Commercial activity" means performing services or	110
providing goods that normally can be obtained from a private	111
enterprise.	112

(B) "Direct costs" mean all costs, whether capital costs,	113
operating costs, or otherwise, that would be eliminated if the	114
service or function to which the costs relate is discontinued.	115

(C) "Electronic commerce services" mean services relating to	116
commercial activity that are the same as, similar to, or overlap	117
information technology-based services provided to the public by	118
two or more competing private enterprises. "Electronic commerce	119
services" includes services made in connection with a transaction	120
completed over a computer network, such as the buying of goods or	121
services over the internet.	122

(D) "Full cost accounting" means, in accordance with	123
generally accepted accounting principles, accounting for all	124
direct costs and indirect costs that are incurred in the	125
ownership, management, or operation of electronic commerce	126
services.	127

(1) A state agency as defined in section 117.01 of the	129
Revised Code or a similar agency of a county, township, municipal	130
corporation, or other political subdivision of this state;	131

(2) Any entity that is not majority-owned as private property	132
and is established by law or by order or action of a state agency	133
or similar agency of a county, township, municipal corporation, or	134
other political subdivision of this state, or an officer of such a	135
state or similar agency.	136

(F) "Indirect costs" means all costs, whether capital costs,	137
operating costs, or otherwise, that are not direct costs.	138

(G) "Private enterprise" means an individual, firm,	139
partnership, joint venture, corporation, association, limited	140
liability company, or other legal entity engaging, in the private	141
sector, in the manufacturing, processing, sale, offering for sale,	142
rental, leasing, delivery, dispensing, distributing, or	143
advertising of goods or services for profit.	144

Sec. 1306.26. (A) The general assembly finds and declares	145
that the growth of private enterprises is essential to the health,	146
welfare, and prosperity of this state and that government competes	147
with the private sector when it provides goods and services to the	148
public.	149