[Congressional Record Volume 145, Number 165 (Friday, November 19, 1999)]
[Senate]
[Pages S15153-S15154]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    MILLENNIUM DIGITAL COMMERCE ACT

  S. 761, passed during today's session, follows:

                                 S. 761

       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 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 or 
     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.

     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 contract formation;
       (4) to facilitate the ability of private parties engaged in 
     interstate transactions to agree among themselves on the 
     appropriate electronic signature technologies for their 
     transactions; and
       (5) to promote the development of a consistent national 
     legal infrastructure necessary to support 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 relating to 
     technology having electrical, digital, magnetic, wireless, 
     optical, electromagnetic, or similar capabilities.
       (2) 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.
       (3) Electronic record.--The term ``electronic record'' 
     means a record created, generated, sent, communicated, 
     received, or stored by electronic means.
       (4) Electronic signature.--The term ``electronic 
     signature'' means an electronic sound, symbol, or process 
     attached to or logically associated with a record and 
     executed or adopted by a person with the intent to sign the 
     record.
       (5) Governmental agency.--The term ``governmental agency'' 
     means an executive, legislative, or judicial agency, 
     department, board, commission, authority, or institution of 
     the Federal Government or of a State or of any county, 
     municipality, or other political subdivision of a State.
       (6) 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.
       (7) Transaction.--The term ``transaction'' means an action 
     or set of actions relating to the conduct of commerce, 
     between 2 or more persons, neither of which is the United 
     States Government, a State, or an agency, department, board, 
     commission, authority, or institution of the United States 
     Government or of a State.
       (8) 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 in that form or any substantially similar variation 
     thereof.

     SEC. 5. INTERSTATE CONTRACT CERTAINTY.

       (a) In General.--In any commercial transaction affecting 
     interstate commerce, a contract may not be denied legal 
     effect or enforceability solely because an electronic 
     signature or electronic record was used in its formation.
       (b) Methods.--Parties to a transaction are permitted to 
     determine the appropriate electronic signature technologies 
     for their transaction, and the means of implementing such 
     technologies.
       (c) Presentation of Contracts.--Notwithstanding subsection 
     (a), if a law requires that a contract be in writing, the 
     legal effect or enforceability of an electronic record of 
     such contract shall be denied under such law, unless it is 
     delivered to all parties to such contract in a form that--
       (1) can be retained by the parties for later reference; and
       (2) can be used to prove the terms of the agreement.
       (d) 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.
       (2) Premarital agreements, marriage, adoption, divorce or 
     other matters of family law.
       (3) Documents of title which are filed of record with a 
     governmental unit until such

[[Page S15154]]

     time that a State or subdivision thereof chooses to accept 
     filings electronically.
       (4) Residential landlord-tenant relationships.
       (5) The Uniform Health-Care Decisions Act as in effect in a 
     State.
       (e) Electronic Agents.--A contract relating to a commercial 
     transaction affecting interstate commerce may not be denied 
     legal effect or enforceability 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 as 
     an agent for another person.
       (f) Insurance.--It is the specific intent of the Congress 
     that this section apply to the business of insurance.
       (g) Application in UETA States.--This section does not 
     apply in any State in which the Uniform Electronic 
     Transactions Act is in effect.

     SEC. 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 nondiscriminatory approach to electronic 
     signatures and authentication methods from other 
     jurisdictions.

     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 by electronic 
     means, including 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 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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