[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1714 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1714

     To facilitate the use of electronic records and signatures in 
                    interstate or foreign commerce.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 6, 1999

Mr. Bliley (for himself, Mr. Davis of Virginia, Mr. Tauzin, Mr. Oxley, 
 Mr. Towns, and Mr. Fossella) introduced the following bill; which was 
                 referred to the Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
     To facilitate the use of electronic records and signatures in 
                    interstate or foreign commerce.

    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 ``Electronic Signatures in Global and 
National Commerce Act''.

  TITLE I--VALIDITY OF ELECTRONIC RECORDS AND SIGNATURES FOR COMMERCE

SEC. 101. GENERAL RULE OF VALIDITY.

    (a) General Rule.--With respect to any contract or agreement 
entered into in or affecting interstate or foreign commerce--
            (1) no statute, regulation, or other rule of law shall deny 
        the legal effect of such contract or agreement on the ground 
        that the instrument is not in writing if the instrument is an 
        electronic record; and
            (2) no statute, regulation, or other rule of law shall deny 
        the legal effect of such contract or agreement on the ground 
        that the contract or agreement is not signed or is not affirmed 
        by a signature if the contract or agreement is signed or 
        affirmed by an electronic signature.
    (b) Autonomy of Parties in Commerce.--With respect to any contract 
or agreement entered into in or affecting interstate or foreign 
commerce, the parties to such contract or agreement may establish 
reasonable requirements regarding the types of electronic records and 
electronic signatures acceptable to such parties.

SEC. 102. AUTHORITY TO ALTER OR SUPERSEDE GENERAL RULE.

    (a) In General.--Except as provided in subsection (b), a Federal or 
State statute, regulation, or other rule of law enacted or adopted 
after the date of enactment of this Act may modify, limit, or supersede 
the provisions of section 101 if--
            (1) such statute, regulation, or rule makes specific 
        reference to the provisions of section 101;
            (2) specifies the alternative procedures or requirements 
        for the use of electronic records or electronic signatures to 
        establish the legal validity of contracts or agreements; and
            (3) in the case of a State statute, regulation, or other 
        rule of law, is enacted or adopted within 2 years after the 
        date of enactment of this Act.
    (b) Effect on Other Laws.--A State statute, regulation, or other 
rule of law that modifies, limits, or supersedes section 101 shall not 
be effective to the extent that such statute, regulation, or rule--
            (1) discriminates in favor of or against a specific 
        technology, method, or technique of creating, storing, 
        generating, receiving, communicating, or authenticating 
        electronic records or electronic signatures;
            (2) discriminates in favor of or against a specific type or 
        size of entity engaged in the business of facilitating the use 
        of electronic records or electronic signatures;
            (3) is not based on specific and publicly available 
        criteria; or
            (4) is otherwise inconsistent with the provisions of 
        section 101.
    (c) Actions To Enjoin.--Whenever it shall appear to the Secretary 
of Commerce that a State has enacted or adopted a statute, regulation, 
or other law that is prohibited by subsection (b), the Secretary may 
bring an action to enjoin the enforcement of such statute, regulation, 
or rule, and upon a proper showing a permanent or temporary injunction 
or restraining order shall be granted without bond.

SEC. 103. SPECIFIC EXCLUSIONS.

    The provisions of section 101 shall not apply to--
            (1) a statute, regulation, or other rule of law governing 
        the creation and execution of wills, codicils, or testamentary 
        trusts; or
            (2) a statute, regulation, or other rule of law governing 
        adoption, divorce, or other matters of family law.

SEC. 104. DEFINITIONS.

    For purposes of this title:
            (1) Electronic record.--The term ``electronic record'' 
        means a writing, document, or other record created, stored, 
        generated, received, or communicated by electronic means.
            (2) Electronic signature.--The term ``electronic 
        signature'' means a signature in electronic form, attached to 
        or logically associated with an electronic record, that--
                    (A) is intended by the parties to signify agreement 
                to a contract or agreement;
                    (B) is capable of verifying the identity of the 
                person using the signature; and
                    (C) is linked to the electronic record in a manner 
                that prevents alteration of the record after signature.
            (3) Electronic.--The term ``electronic'' means of or 
        relating to technology having electrical, digital, magnetic, 
        optical, electromagnetic, or similar capabilities regardless of 
        medium.

TITLE II--DEVELOPMENT AND ADOPTION OF ELECTRONIC SIGNATURE PRODUCTS AND 
                                SERVICES

SEC. 201. TREATMENT OF ELECTRONIC SIGNATURES IN INTERSTATE AND FOREIGN 
              COMMERCE.

    (a) Inquiry Regarding Impediments to Commerce.--
            (1) Inquiries required.--Within 90 days after the date of 
        the enactment of this Act, and annually thereafter, the 
        Secretary of Commerce, acting through the Assistant Secretary 
        for Communications and Information, shall complete an inquiry 
        to--
                    (A) identify any domestic and foreign impediments 
                to commerce in electronic signature products and 
                services and the manners in which and extent to which 
                such impediments inhibit the development of interstate 
                and foreign commerce;
                    (B) identify constraints imposed by foreign nations 
                or international organizations that constitute barriers 
                to providers of electronic signature products or 
                services; and
                    (C) identify the degree to which other nations and 
                international organizations are complying with the 
                principles in subsection (b)(2).
            (2) Submission.--The Secretary shall submit a report to the 
        Congress regarding the results of each such inquiry within 90 
        days after the conclusion of such inquiry.
    (b) Promotion of Electronic Signatures.--
            (1) Required actions.--The Secretary of Commerce, acting 
        through the Assistant Secretary for Communications and 
        Information, shall promote the acceptance and use, on an 
        international basis, of electronic signatures in accordance 
        with the principles specified in paragraph (2) and in a manner 
        consistent with section 101 of this Act. The Secretary of 
        Commerce shall take all actions necessary in a manner 
        consistent with such principles to eliminate or reduce, to the 
        maximum extent possible, the impediments to commerce in 
        electronic signatures, including those identified in the 
        inquiries under subsection (a) for the purpose of facilitating 
        the development of interstate and foreign commerce.
            (2) Principles.--The principles specified in this paragraph 
        are the following:
                    (A) Free markets and self-regulation, rather than 
                government standard-setting or rules, should govern the 
                development and use of electronic records and 
                electronic signatures.
                    (B) Neutrality and nondiscrimination should be 
                observed among providers of and technologies for 
                electronic records and electronic signatures.
                    (C) Parties to a transaction should be permitted to 
                establish reasonable requirements regarding the types 
                of electronic records and electronic signatures 
                acceptable to such parties.
                    (D) Electronic records and electronic signatures in 
                a form acceptable to the parties should not be denied 
                legal validity on the ground that they are not in 
                writing.
                    (E) De jure or de facto imposition of standards on 
                private industry through foreign adoption of 
                regulations or policies with respect to electronic 
                records and electronic signatures should be avoided.
    (c) Followup Study.--Within 3 years after the date of enactment of 
this Act, the Secretary of Commerce, acting through the Assistant 
Secretary for Communications and Information, shall conduct an inquiry 
regarding any State statutes, regulations, or other rules of law 
enacted or adopted after such date of enactment pursuant to section 
102(a), and the extent to which such statutes, regulations, and rules 
comply with section 102(b). The Secretary shall submit a report to the 
Congress regarding the results of such inquiry by the conclusion of 
such 3-year period and such report shall identify any actions taken by 
the Secretary pursuant to section 102(c) and subsection (b) of this 
section.
    (d) Consultation.--In conducting the activities required by this 
section, the Secretary shall consult with users and providers of 
electronic signature products and services and other interested 
persons.

   TITLE III--USE OF ELECTRONIC RECORDS AND SIGNATURES UNDER FEDERAL 
                             SECURITIES LAW

    (a) Amendment.--Section 3 of the Securities Exchange Act of 1934 
(15 U.S.C. 78c) is amended by adding at the end the following:
    ``(h) Requirements Relating to Written Documents and Signatures.--
            ``(1) Use of electronic records and signatures.--
        Notwithstanding any State statute, regulation, or rule of law, 
        whenever in the securities laws, or in the rules or regulations 
        thereunder (including the rules of any self-regulatory 
        organization)--
                    ``(A) a contract, agreement, or record (as defined 
                in subsection (a)(37)) is required to be in writing, or 
                is required to be authenticated by means of an 
                instrument in writing, the legal effect of such 
                contract, agreement, or record shall not be denied on 
                the ground that the instrument is not in writing if the 
                instrument is an electronic record; and
                    ``(B) a contract, agreement, or record is required 
                to be signed, the legal effect of such contract, 
                agreement, or record shall not be denied on the ground 
                that contract, agreement, or record is not signed or is 
                not affirmed by a signature if the contract, agreement, 
                or record is signed or affirmed by an electronic 
                signature.
            ``(2) Authority of commission.--Notwithstanding any State 
        statute, regulation, or rule of law, the Commission may, 
        consistent with the public interest and the protection of 
        investors, prescribe regulations to carry out this subsection, 
        but such regulations shall not--
                    ``(A) discriminate in favor of or against a 
                specific technology, method, or technique of creating, 
                storing, generating, receiving, communicating, or 
                authenticating electronic records or electronic 
                signatures; or
                    ``(B) discriminate in favor of or against a 
                specific type or size of entity engaged in the business 
                of facilitating the use of electronic records or 
                electronic signatures.
            ``(3) Definitions.--The terms `electronic record' and 
        `electronic signature' have the meanings provided such terms by 
        section 104 of the Electronic Signatures In Global and National 
        Commerce Act.''.
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