[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1320 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1320

 To regulate interstate commerce by electronic means by permitting and 
encouraging the continued expansion of electronic commerce through the 
          operation of free market forces, and other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 25, 1999

  Ms. Eshoo introduced the following bill; which was referred to the 
 Committee on Commerce, and in addition to the Committee on Government 
 Reform, 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 regulate interstate commerce by electronic means by permitting and 
encouraging the continued expansion of electronic commerce through the 
          operation of free market forces, and other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Millennium Digital Commerce Act''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) The growth of electronic commerce and electronic 
        government transactions represent a powerful force for economic 
        growth, consumer choice, improved civic participation and 
        wealth creation.
            (2) The promotion of growth in private sector electronic 
        commerce through Federal legislation is in the national 
        interest because that market is globally important to the 
        United States.
            (3) A consistent legal foundation, across multiple 
        jurisdictions, for electronic commerce will promote the growth 
        of such transactions, and that such a foundation should be 
        based upon a simple, technology neutral, nonregulatory, and 
        market-based approach.
            (4) The nation and the world stand at the beginning of a 
        large scale transition to an information society which will 
        require innovative legal and policy approaches, and therefore, 
        States can serve the national interest by continuing their 
        proven role as laboratories of innovation for quickly evolving 
        areas of public policy, provided that States also adopt a 
        consistent, reasonable national baseline to eliminate obsolete 
        barriers to electronic commerce such as undue paper and pen 
        requirements, and further, that any such innovation should not 
        unduly burden interjurisdictional commerce.
            (5) To the extent State laws or regulations do not 
        currently provide a consistent, reasonable national baseline or 
        in fact create an undue burden to interstate commerce in the 
        important burgeoning area of electronic commerce, the national 
        interest is best served by Federal preemption to the extent 
        necessary to provide such consistent national baseline and 
        eliminate said burden, but that absent such lack of a 
        consistent, reasonable national baseline or such undue burdens, 
        the best legal system for electronic commerce will result from 
        continuing experimentation by individual jurisdictions.
            (6) With due regard to the fundamental need for a 
        consistent national baseline, each jurisdiction that enacts 
        such laws should have the right to determine the need for any 
        exceptions to protect consumers and maintain consistency with 
        existing related bodies of law within a particular 
        jurisdiction.
            (7) Industry has developed several electronic signature 
        technologies for use in electronic transactions, and the public 
        policies of the United States should serve to promote a dynamic 
        marketplace within which these technologies can compete. 
        Consistent with this Act, States should permit the use and 
        development of any authentication technologies that are 
        appropriate as practicable as between private parties and in 
        use with State agencies.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to permit and encourage the continued expansion of 
        electronic commerce through the operation of free market forces 
        rather than proscriptive governmental mandates and regulations;
            (2) to promote public confidence in the validity, integrity 
        and reliability of electronic commerce and online government 
        under Federal law;
            (3) to facilitate and promote electronic commerce by 
        clarifying the legal status of electronic records and 
        electronic signatures in the context of writing and signing 
        requirements imposed by law;
            (4) to facilitate the ability of private parties engaged in 
        interstate transactions to agree among themselves on the terms 
        and conditions on which they use and accept electronic 
        signatures and electronic records; and
            (5) to promote the development of a consistent national 
        legal infrastructure necessary to support of electronic 
        commerce at the Federal and State levels within existing areas 
        of jurisdiction.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Electronic.--The term ``electronic'' means of or 
        relating to technology having electrical, digital, magnetic, 
        wireless, optical, electromagnetic, or similar capabilities.
            (2) Electronic record.--The term ``electronic record'' 
        means a record created, stored, generated, received, or 
        communicated by electronic means.
            (3) Electronic signature.--The term ``electronic 
        signature'' means a signature in electronic form, attached to 
        or logically associated with an electronic record.
            (4) Governmental agency.--The term ``governmental agency'' 
        means an executive, legislative, or judicial agency, 
        department, board, commission, authority, institution, or 
        instrumentality of the Federal government or of a State or of 
        any county, municipality, or other political subdivision of a 
        State.
            (5) Record.--The term ``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) Sign.--The term ``sign'' means to execute or adopt a 
        signature.
            (7) Signature.--The term ``signature'' means any symbol, 
        sound, or process executed or adopted by a person or entity, 
        with intent to authenticate or accept a record.
            (8) Transaction.--The term ``transaction'' means an action 
        or set of actions occurring between 2 or more persons relating 
        to the conduct of commerce.

SEC. 5. PRINCIPLES GOVERNING THE USE OF ELECTRONIC SIGNATURES IN 
              INTERNATIONAL TRANSACTIONS.

    (a) In General.--To the extent practicable, the Federal Government 
shall observe the following principles in an international context to 
enable commercial electronic transaction:
            (1) Remove paper-based obstacles to electronic transactions 
        by adopting relevant principles from the Model Law on 
        Electronic Commerce adopted in 1996 by the United Nations 
        Commission on International Trade Law (UNCITRAL).
            (2) Permit parties to a transaction to determine the 
        appropriate authentication technologies and implementation 
        models for their transactions, with assurance that those 
        technologies and implementation models will be recognized and 
        enforced.
            (3) Permit parties to a transaction to have the opportunity 
        to prove in court or other proceedings that their 
        authentication approaches and their transactions are valid.
            (4) Take a nondiscriminatory approach to electronic 
        signatures and authentication methods from other jurisdictions.

SEC. 6. INTERSTATE CONTRACT CERTAINTY.

    (a) Interstate Commercial Contracts.--A contract relating to an 
interstate transaction shall not be denied legal effect solely because 
an electronic signature or electronic record was used in its formation.
    (b) Methods.--Notwithstanding any rule of law that specifies one or 
more acceptable or required technologies or business models, including 
legal or other procedures, necessary to create, use, receive, validate, 
or invalidate electronic signatures or electronic records, the parties 
to an interstate transaction may establish by contract, electronically 
or otherwise, such technologies or business models, including legal or 
other procedures, to create, use, receive, validate, or invalidate 
electronic signatures and electronic records.
    (c) Not Preempt State Law.--Nothing in this section shall be 
construed to preempt the law of a State that enacts legislation 
governing electronic transactions that is consistent with subsections 
(a) and (b). A State that enacts, or has in effect, uniform electronic 
transactions legislation substantially as reported to State 
legislatures by the National Conference of Commissioners on Uniform 
State Law shall be deemed to have satisfied this criterion, provided 
such legislation as enacted is not inconsistent with subsections (a) 
and (b).
    (d) Intent.--The intent of a person to execute or adopt an 
electronic signature shall be determined from the context and 
surrounding circumstances, which may include accepted commercial 
practices.

SEC. 7. STUDY OF LEGAL AND REGULATORY BARRIERS TO ELECTRONIC COMMERCE.

    (a) Barriers.--Each Federal agency shall, not later than 6 months 
after the date of enactment of this Act, provide a report to the 
Director of the Office of Management and Budget and the Secretary of 
Commerce identifying any provision of law administered by such agency, 
or any regulations issued by such agency and in effect on the date of 
enactment of this Act, that may impose a barrier to electronic 
transactions, or otherwise to the conduct of commerce online or be 
electronic means. Such barriers include, but are not limited to, 
barriers imposed by a law or regulation directly or indirectly 
requiring that signatures, or records of transactions, be accomplished 
or retained in other than electronic form. In its report, each agency 
shall identify the barriers among those identified whose removal would 
require legislative action, and shall indicate agency plans to 
undertake regulatory action to remove such barriers among those 
identified as are caused by regulations issued by the agency.
    (b) Report to Congress.--The Secretary of Commerce, in consultation 
with the Director of the Office of Management and Budget, shall, within 
18 months after the date of enactment of this Act, and after the 
consultation required by subsection (c) of this section, report to the 
Congress concerning--
            (1) legislation needed to remove any existing barriers to 
        electronic transactions or otherwise to the conduct of commerce 
        online or by electronic means; and
            (2) actions being taken by the Executive Branch and 
        individual Federal agencies to remove such barriers as are 
        caused by agency regulations or policies.
    (c) Consultation.--In preparing the report required by this 
section, the Secretary of Commerce shall consult with the General 
Services Administration, the National Archives and Records 
Administration, and the Attorney General concerning matters involving 
the authenticity of records, their storage and retention, and their 
usability for law enforcement purposes.
    (d) Include Findings If No Recommendations.--If the report required 
by this section omits recommendations for actions needed to fully 
remove identified barriers to electronic transactions or to online or 
electronic commerce, it shall include a finding or findings, including 
substantial reasons therefor, that such removal is impracticable or 
would be inconsistent with the implementation or enforcement of 
applicable laws.
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