[Congressional Record Volume 145, Number 146 (Monday, October 25, 1999)]
[Senate]
[Pages S13103-S13105]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE MILLENNIUM DIGITAL COMMERCE ACT

                                 ______
                                 

                 ABRAHAM AND OTHERS AMENDMENT NO. 2329

  (Ordered to lie on the table.)
  Mr. ABRAHAM (for himself, Mr. Wyden, and Mr. Lott) submitted an 
amendment intended to be proposed by them to the bill (S. 761) 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 for other purposes; as follows:

       Strike out all after the enacting clause and insert the 
     following:

     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, non-
     regulatory, 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 inter-jurisdictional 
     commerce.
       (5) To the extent State laws or regulations do not 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, reasonable national baseline 
     eliminate said burden, but that absent such lack of 
     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.

[[Page S13104]]

     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) Agreement.--The term `agreement' means the bargain of 
     the parties in fact as found in their language or inferred 
     from other circumstances and from rules, regulations, and 
     procedures given the effect of agreements under laws 
     otherwise applicable to a particular transaction.
       (2) Electronic.--The term ``electronic'' means relating to 
     technology having electrical, digital, magnetic, wireless, 
     optical, electromagnetic, or similar capabilities.
       (3) Electronic agent.--The term ``electronic agent'' means 
     a computer program or an electronic or other automated means 
     used to initiate an action or respond to electronic records 
     or performances in whole or in part without review by an 
     individual at the time of the action or response.
       (4) Electronic record.--The term ``electronic record'' 
     means a record created, generated, sent, communicated, 
     received, or stored by electronic means.
       (5) Electronic signature.--The term ``electronic 
     signature'' means an electronic sound, symbol, or process 
     attached to or logically associated with an electronic record 
     and executed or adopted by a person with the intent to sign 
     the electronic record.
       (6) 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 country, municipality, or other political subdivision of 
     a State.
       (7) 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.
       (8) Transaction.--The term ``transaction'' means an action 
     or set of actions relating to the conduct of commerce, 
     including the business of insurance, between 2 or more 
     persons, neither of which is the United States Government, a 
     State, or an agency, department, board, commission, 
     authority, institution, or instrumentality of the United 
     States Government or of a State.
       (9) Uniform electronic transactions act.--The term 
     ``Uniform Electronic Transactions Act'' means the Uniform 
     Electronic Transactions Act as provided to State legislatures 
     by the National Conference of Commissioners on Uniform State 
     Law.

     SEC. 5. INTERSTATE CONTRACT CERTAINTY.

       (a) Application of Section.--This section applies only to 
     transactions between parties each of which has agreed to 
     conduct such transaction by electronic means. By agreeing to 
     conduct a transaction by electronic means a party does not 
     necessarily agree to conduct other transactions by electronic 
     means.
       (b) In General.--In any commercial transaction affecting 
     interstate commerce:
       (1) A record or signature may not be denied legal effect or 
     enforceability solely because it is in electronic form.
       (2) A contract or agreement may not be denied legal effect 
     or enforceability solely because an electronic record was 
     used in its formation.
       (3) If a law requires a record to be in writing, an 
     electronic record satisfies the law.
       (4) If a law requires a signature, an electronic signature 
     satisfies the law.
       (c) Admissibility of Evidence.--In a legal proceeding, 
     evidence of an electronic record of signature may not be 
     excluded solely because it is in electronic form.
       (d) Terms and Condition of Agreements.--The parties to a 
     transaction may agree on the terms and conditions on which 
     they will use and accept electronic signatures and electronic 
     records, including the methods therefore, in commercial 
     transactions affecting interstate commerce. Nothing in this 
     subsection requires that any party enter into such a 
     transaction.
       (e) Retention.--
       (1) If a law requires that certain records be retained, 
     that requirement is met by retaining an electronic record of 
     the information in the record which--
       (A) accurately reflects the information set forth in the 
     record after it was first generated in its final form as an 
     electronic record or otherwise; and
       (B) remains accessible for later reference.
       (2) A requirement to retain records in accordance with 
     paragraph (1) does not apply to any information whose sole 
     purpose is to enable the record to be sent, communicated, or 
     received.
       (3) A person satisfies the requirements of paragraph (1) by 
     using the services of any other person if the requirements of 
     paragraph (1) are met.
       (4) If a law requires a record to be provided or retained 
     in its original form, or provides consequences if the record 
     is not provided or presented or retained in its original 
     form, that law is satisfied by an electronic record provided 
     or retained in accordance with paragraph (1).
       (5) If a law requires retention of a check, that 
     requirement is satisfied by retention of an electronic record 
     of the information on the front and back of the check in 
     accordance with paragraph (1).
       (6) A record retained as an electronic record in accordance 
     with paragraph (1) satisfies a law requiring a person to 
     retain records for evidentiary, audit, or like purposes, 
     unless a law enacted after the effective date of this 
     subsection specifically prohibits the use of an electronic 
     record for a specified purpose.
       (7) This subsection does not preclude a governmental agency 
     of the United States or any State from specifying additional 
     requirements for the retention of records, written or 
     electronic, subject to the agency's jurisdiction.
       (f) Transferable Records.--
       (1) In this section, ``transferable record'' means an 
     electronic record that--
       (A) would be a note under Article 3 of the Uniform 
     Commercial Code or a document under Article 7 of the Uniform 
     Commercial Code if the electronic record were in writing;
       (B) the issuer of the electronic record expressly has 
     agreed is a transferable record; and
       (C) relates to a transaction involving real or personal 
     property.
       (2) A person has control of a transferable record if a 
     system employed for evidencing the transfer of interests in 
     the transferable record reliably establishes that person as 
     the person to which the transferable record was issued or 
     transferred.
       (3) A system satisfies paragraph (2), and a person is 
     deemed to have control of a transferable record, if the 
     transferable record is created, stored, and assigned in such 
     a manner that--
       (A) a single authoritative copy of the transferable record 
     exists which is unique, identifiable, and, except as 
     otherwise provided in paragraphs (4), (5), and (6), 
     unalterable;
       (B) the authoritative copy identifies the person asserting 
     control as--
       (i) the person to which the transferable record was issued; 
     or
       (ii) if the authoritative copy indicates that the 
     transferable record has been transferred, the person to which 
     the transferable record was most recently transferred;
       (iii) the authoritative copy is communicated to and 
     maintained by the person asserting control or its designated 
     custodian;
       (iv) copies or revisions that add or change an identified 
     assignee of the authoritative copy can be made only with the 
     consent of the person asserting control;
       (v) each copy of the authoritative copy and any copy of a 
     copy is readily identifiable as a copy that is not the 
     authoritative copy; and
       (vi) any revision of the authoritative copy is readily 
     identifiable as authorized or unauthorized.
       (4) Except as otherwise agreed, a person having control of 
     a transferable record is the holder, as defined in section 1-
     201(20) of the Uniform Commercial Code, of the transferable 
     record and has the same rights and defenses as a holder of an 
     equivalent record or writing under the Uniform Commercial 
     Code, including, if the applicable statutory requirements 
     under section 3-302(a), 7-501, or 9-308 of the Uniform 
     Commercial Code are satisfied, the rights and defenses of a 
     holder in due course, a holder to which a negotiable document 
     of title has been duly negotiated, or a purchaser, 
     respectively. Delivery, possession, and endorsement are not 
     required to obtain or exercise any of the rights under this 
     subsection.
       (5) Except as otherwise agreed, an obligor under a 
     transferable record has the same rights and defenses as an 
     equivalent obligor under equivalent records or writings under 
     the Uniform Commercial Code.
       (6) If requested by a person against which enforcement is 
     sought, the person seeking to enforce the transferable record 
     shall provide reasonable proof that the person is in control 
     of the transferable record. Proof may include access to the 
     authoritative copy of the transferable record and related 
     business records sufficient to review the terms of the 
     transferable record and to establish the identity of the 
     person having control of the transferable record.
       (g) Electronic Agents.--A contract relating to a commercial 
     transaction affecting interstate commerce may not be denied 
     legal effect solely because its formation involved--
       (1) the interaction of electronic agents of the parties; or
       (2) the interaction of an electronic agent of a party and 
     an individual who acts on that individual's own behalf or for 
     another person.
       (h) Specific Exclusions.--The provisions of this section 
     shall not apply to a statute, regulation, or other rule of 
     law governing any of the following:
       (1) The Uniform Commercial Code, as in effect in a state, 
     other than sections 1-107 and 1-206, Article 2, and Article 
     2A.

[[Page S13105]]

       (2) The creation or execution of wills, codicils, or 
     testamentary trusts.
       (3) Premarital agreements, marriage, adoption, divorce or 
     other matters of family law.
       (4) Court orders or notices, or documents used in court 
     proceedings.
       (5) Documents of title which are filed of record with a 
     governmental unit until such time that a state or subdivision 
     thereof chooses to accept filings electronically.
       (6) Residential landlord-tenant relationships.
       (7) The Uniform Health-Care Decisions Act.
       (i) Insurance.--It is the specific intent of the Congress 
     that the benefits of this title apply to the business of 
     insurance. This section applies to any Federal and State law 
     and regulation governing the business of insurance that 
     requires manual signatures or communications to be printed or 
     in writing, document delivery, and retention.
       (j) Application in UETA States.--This section does not 
     preempt the Uniform Electronic Transactions Act as in effect 
     in a State, if that Act, as in effect in that State, is not 
     inconsistent, in any significant manner, with the provisions 
     of this Act.

     SECTION 6. PRINCIPLES GOVERNING THE USE OF ELECTRONIC 
                   SIGNATURES IN INTERNATIONAL TRANSACTIONS.

       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.
       (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 non-discriminatory approach to electronic 
     signatures and authentication methods from other 
     jurisdictions.

     SECTION 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 that 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 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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