[Congressional Record Volume 146, Number 70 (Thursday, June 8, 2000)]
[House]
[Pages H4115-H4118]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   CONFERENCE REPORT ON S. 761, ELECTRONIC SIGNATURES IN GLOBAL AND 
                         NATIONAL COMMERCE ACT

  Mr. BLILEY (during the Special Order of the gentleman from Colorado) 
submitted the following conference report and statement on 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.

                  Conference Report (H. Rept. 106-661)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendments of the House 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 other purposes, having met, after full and free 
     conference, have agreed to recommend and do recommend to 
     their respective Houses as follows:
       That the Senate recede from its disagreement to the 
     amendment of the House to the text of the bill and agree to 
     the same with an amendment as follows:
       In lieu of the matter proposed to be inserted by the House 
     amendment, insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Electronic Signatures in 
     Global and National Commerce Act''.
         TITLE I--ELECTRONIC RECORDS AND SIGNATURES IN COMMERCE

     SEC. 101. GENERAL RULE OF VALIDITY.

       (a) In General.--Notwithstanding any statute, regulation, 
     or other rule of law (other than this title and title II), 
     with respect to any transaction in or affecting interstate or 
     foreign commerce--
       (1) a signature, contract, or other record relating to such 
     transaction may not be denied legal effect, validity, or 
     enforceability solely because it is in electronic form; and
       (2) a contract relating to such transaction may not be 
     denied legal effect, validity, or enforceability solely 
     because an electronic signature or electronic record was used 
     in its formation.
       (b) Preservation of Rights and Obligations.--This title 
     does not--
       (1) limit, alter, or otherwise affect any requirement 
     imposed by a statute, regulation, or rule of law relating to 
     the rights and obligations of persons under such statute, 
     regulation, or rule of law other than a requirement that 
     contracts or other records be written, signed, or in 
     nonelectronic form; or
       (2) require any person to agree to use or accept electronic 
     records or electronic signatures, other than a governmental 
     agency with respect to a record other than a contract to 
     which it is a party.
       (c) Consumer Disclosures.--
       (1) Consent to electronic records.--Notwithstanding 
     subsection (a), if a statute, regulation, or other rule of 
     law requires that information relating to a transaction or 
     transactions in or affecting interstate or foreign commerce 
     be provided or made available to a consumer in writing, the 
     use of an electronic record to provide or make available 
     (whichever is required) such information satisfies the 
     requirement that such information be in writing if--
       (A) the consumer has affirmatively consented to such use 
     and has not withdrawn such consent;
       (B) the consumer, prior to consenting, is provided with a 
     clear and conspicuous statement--
       (i) informing the consumer of (I) any right or option of 
     the consumer to have the record provided or made available on 
     paper or in nonelectronic form, and (II) the right of the 
     consumer to withdraw the consent to have the record provided 
     or made available in an electronic form and of any 
     conditions, consequences (which may include termination of 
     the parties' relationship), or fees in the event of such 
     withdrawal;
       (ii) informing the consumer of whether the consent applies 
     (I) only to the particular transaction which gave rise to the 
     obligation to provide the record, or (II) to identified 
     categories of records that may be provided or made available 
     during the course of the parties' relationship;
       (iii) describing the procedures the consumer must use to 
     withdraw consent as provided in clause (i) and to update 
     information needed to contact the consumer electronically; 
     and
       (iv) informing the consumer (I) how, after the consent, the 
     consumer may, upon request, obtain a paper copy of an 
     electronic record, and (II) whether any fee will be charged 
     for such copy;
       (C) the consumer--
       (i) prior to consenting, is provided with a statement of 
     the hardware and software requirements for access to and 
     retention of the electronic records; and
       (ii) consents electronically, or confirms his or her 
     consent electronically, in a manner that reasonably 
     demonstrates that the consumer can access information in the 
     electronic form that will be used to provide the information 
     that is the subject of the consent; and
       (D) after the consent of a consumer in accordance with 
     subparagraph (A), if a change in the hardware or software 
     requirements needed to access or retain electronic records 
     creates a material risk that the consumer will not be able to 
     access or retain a subsequent electronic record that was the 
     subject of the consent, the person providing the electronic 
     record--
       (i) provides the consumer with a statement of (I) the 
     revised hardware and software requirements for access to and 
     retention of the electronic records, and (II) the right to 
     withdraw consent without the imposition of any fees for such 
     withdrawal and without the imposition of any condition or 
     consequence that was not disclosed under subparagraph (B)(i); 
     and
       (ii) again complies with subparagraph (C).
       (2) Other rights.--
       (A) Preservation of consumer protections.--Nothing in this 
     title affects the content or timing of any disclosure or 
     other record required to be provided or made available to any 
     consumer under any statute, regulation, or other rule of law.
       (B) Verification or acknowledgement.--If a law that was 
     enacted prior to this Act expressly requires a record to be 
     provided or made available by a specified method that 
     requires verification or acknowledgment of receipt, the 
     record may be provided or made available electronically only 
     if the method used provides verification or acknowledgment of 
     receipt (whichever is required).
       (3) Effect of failure to obtain electronic consent or 
     confirmation of consent.--The legal effectiveness, validity, 
     or enforceability of any contract executed by a consumer 
     shall not be denied solely because of the failure to obtain 
     electronic consent or confirmation of consent by that 
     consumer in accordance with paragraph (1)(C)(ii).
       (4) Prospective effect.--Withdrawal of consent by a 
     consumer shall not affect the legal effectiveness, validity, 
     or enforceability of electronic records provided or made 
     available to that consumer in accordance with paragraph (1) 
     prior to implementation of the consumer's withdrawal of 
     consent. A consumer's withdrawal of consent shall be 
     effective within a reasonable period of time after receipt of 
     the withdrawal by the provider of the record. Failure to 
     comply with paragraph (1)(D) may, at the election of the 
     consumer, be treated as a withdrawal of consent for purposes 
     of this paragraph.
       (5) Prior consent.--This subsection does not apply to any 
     records that are provided or made

[[Page H4116]]

     available to a consumer who has consented prior to the 
     effective date of this title to receive such records in 
     electronic form as permitted by any statute, regulation, 
     or other rule of law.
       (6) Oral communications.--An oral communication or a 
     recording of an oral communication shall not qualify as an 
     electronic record for purposes of this subsection except as 
     otherwise provided under applicable law.
       (d) Retention of Contracts and Records.--
       (1) Accuracy and accessibility.--If a statute, regulation, 
     or other rule of law requires that a contract or other record 
     relating to a transaction in or affecting interstate or 
     foreign commerce be retained, that requirement is met by 
     retaining an electronic record of the information in the 
     contract or other record that--
       (A) accurately reflects the information set forth in the 
     contract or other record; and
       (B) remains accessible to all persons who are entitled to 
     access by statute, regulation, or rule of law, for the period 
     required by such statute, regulation, or rule of law, in a 
     form that is capable of being accurately reproduced for later 
     reference, whether by transmission, printing, or otherwise.
       (2) Exception.--A requirement to retain a contract or other 
     record in accordance with paragraph (1) does not apply to any 
     information whose sole purpose is to enable the contract or 
     other record to be sent, communicated, or received.
       (3) Originals.--If a statute, regulation, or other rule of 
     law requires a contract or other record relating to a 
     transaction in or affecting interstate or foreign commerce to 
     be provided, available, or retained in its original form, or 
     provides consequences if the contract or other record is not 
     provided, available, or retained in its original form, that 
     statute, regulation, or rule of law is satisfied by an 
     electronic record that complies with paragraph (1).
       (4) Checks.--If a statute, regulation, or other rule of law 
     requires the 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).
       (e) Accuracy and Ability To Retain Contracts and Other 
     Records.--Notwithstanding subsection (a), if a statute, 
     regulation, or other rule of law requires that a contract or 
     other record relating to a transaction in or affecting 
     interstate or foreign commerce be in writing, the legal 
     effect, validity, or enforceability of an electronic record 
     of such contract or other record may be denied if such 
     electronic record is not in a form that is capable of being 
     retained and accurately reproduced for later reference by all 
     parties or persons who are entitled to retain the contract or 
     other record.
       (f) Proximity.--Nothing in this title affects the proximity 
     required by any statute, regulation, or other rule of law 
     with respect to any warning, notice, disclosure, or other 
     record required to be posted, displayed, or publicly affixed.
       (g) Notarization and Acknowledgment.--If a statute, 
     regulation, or other rule of law requires a signature or 
     record relating to a transaction in or affecting interstate 
     or foreign commerce to be notarized, acknowledged, verified, 
     or made under oath, that requirement is satisfied if the 
     electronic signature of the person authorized to perform 
     those acts, together with all other information required to 
     be included by other applicable statute, regulation, or rule 
     of law, is attached to or logically associated with the 
     signature or record.
       (h) Electronic Agents.--A contract or other record relating 
     to a transaction in or affecting interstate or foreign 
     commerce may not be denied legal effect, validity, or 
     enforceability solely because its formation, creation, or 
     delivery involved the action of one or more electronic agents 
     so long as the action of any such electronic agent is legally 
     attributable to the person to be bound.
       (i) Insurance.--It is the specific intent of the Congress 
     that this title and title II apply to the business of 
     insurance.
       (j) Insurance Agents and Brokers.--An insurance agent or 
     broker acting under the direction of a party that enters into 
     a contract by means of an electronic record or electronic 
     signature may not be held liable for any deficiency in the 
     electronic procedures agreed to by the parties under that 
     contract if--
       (1) the agent or broker has not engaged in negligent, 
     reckless, or intentional tortious conduct;
       (2) the agent or broker was not involved in the development 
     or establishment of such electronic procedures; and
       (3) the agent or broker did not deviate from such 
     procedures.

     SEC. 102. EXEMPTION TO PREEMPTION.

       (a) In General.--A State statute, regulation, or other rule 
     of law may modify, limit, or supersede the provisions of 
     section 101 with respect to State law only if such statute, 
     regulation, or rule of law--
       (1) constitutes an enactment or adoption of the Uniform 
     Electronic Transactions Act as approved and recommended for 
     enactment in all the States by the National Conference of 
     Commissioners on Uniform State Laws in 1999, except that any 
     exception to the scope of such Act enacted by a State under 
     section 3(b)(4) of such Act shall be preempted to the extent 
     such exception is inconsistent with this title or title II, 
     or would not be permitted under paragraph (2)(A)(ii) of this 
     subsection; or
       (2)(A) specifies the alternative procedures or requirements 
     for the use or acceptance (or both) of electronic records or 
     electronic signatures to establish the legal effect, 
     validity, or enforceability of contracts or other records, 
     if--
       (i) such alternative procedures or requirements are 
     consistent with this title and title II; and
       (ii) such alternative procedures or requirements do not 
     require, or accord greater legal status or effect to, the 
     implementation or application of a specific technology or 
     technical specification for performing the functions of 
     creating, storing, generating, receiving, communicating, or 
     authenticating electronic records or electronic signatures; 
     and
       (B) if enacted or adopted after the date of the enactment 
     of this Act, makes specific reference to this Act.
       (b) Exceptions for Actions by States as Market 
     Participants.--Subsection (a)(2)(A)(ii) shall not apply to 
     the statutes, regulations, or other rules of law governing 
     procurement by any State, or any agency or instrumentality 
     thereof.
       (c) Prevention of Circumvention.--Subsection (a) does not 
     permit a State to circumvent this title or title II through 
     the imposition of nonelectronic delivery methods under 
     section 8(b)(2) of the Uniform Electronic Transactions Act.

     SEC. 103. SPECIFIC EXCEPTIONS.  

       (a) Excepted Requirements.--The provisions of section 101 
     shall not apply to a contract or other record to the extent 
     it is governed by--
       (1) a statute, regulation, or other rule of law governing 
     the creation and execution of wills, codicils, or 
     testamentary trusts;
       (2) a State statute, regulation, or other rule of law 
     governing adoption, divorce, or other matters of family law; 
     or
       (3) the Uniform Commercial Code, as in effect in any State, 
     other than sections 1-107 and 1-206 and Articles 2 and 2A.
       (b) Additional Exceptions.--The provisions of section 101 
     shall not apply to--
       (1) court orders or notices, or official court documents 
     (including briefs, pleadings, and other writings) required to 
     be executed in connection with court proceedings;
       (2) any notice of--
       (A) the cancellation or termination of utility services 
     (including water, heat, and power);
       (B) default, acceleration, repossession, foreclosure, or 
     eviction, or the right to cure, under a credit agreement 
     secured by, or a rental agreement for, a primary residence of 
     an individual;
       (C) the cancellation or termination of health insurance or 
     benefits or life insurance benefits (excluding annuities); or
       (D) recall of a product, or material failure of a product, 
     that risks endangering health or safety; or
       (3) any document required to accompany any transportation 
     or handling of hazardous materials, pesticides, or other 
     toxic or dangerous materials.
       (c) Review of Exceptions.--
       (1) Evaluation required.--The Secretary of Commerce, acting 
     through the Assistant Secretary for Communications and 
     Information, shall review the operation of the exceptions in 
     subsections (a) and (b) to evaluate, over a period of 3 
     years, whether such exceptions continue to be necessary for 
     the protection of consumers. Within 3 years after the date of 
     enactment of this Act, the Assistant Secretary shall submit a 
     report to the Congress on the results of such evaluation.
       (2) Determinations.--If a Federal regulatory agency, with 
     respect to matter within its jurisdiction, determines after 
     notice and an opportunity for public comment, and publishes a 
     finding, that one or more such exceptions are no longer 
     necessary for the protection of consumers and eliminating 
     such exceptions will not increase the material risk of harm 
     to consumers, such agency may extend the application of 
     section 101 to the exceptions identified in such finding.

     SEC. 104. APPLICABILITY TO FEDERAL AND STATE GOVERNMENTS.

       (a) Filing and Access Requirements.--Subject to subsection 
     (c)(2), nothing in this title limits or supersedes any 
     requirement by a Federal regulatory agency, self-regulatory 
     organization, or State regulatory agency that records be 
     filed with such agency or organization in accordance with 
     specified standards or formats.
       (b) Preservation of Existing Rulemaking Authority.--
       (1) Use of authority to interpret.--Subject to paragraph 
     (2) and subsection (c), a Federal regulatory agency or State 
     regulatory agency that is responsible for rulemaking under 
     any other statute may interpret section 101 with respect to 
     such statute through--
       (A) the issuance of regulations pursuant to a statute; or
       (B) to the extent such agency is authorized by statute to 
     issue orders or guidance, the issuance of orders or guidance 
     of general applicability that are publicly available and 
     published (in the Federal Register in the case of an order or 
     guidance issued by a Federal regulatory agency).

     This paragraph does not grant any Federal regulatory agency 
     or State regulatory agency authority to issue regulations, 
     orders, or guidance pursuant to any statute that does not 
     authorize such issuance.
       (2) Limitations on interpretation authority.--
     Notwithstanding paragraph (1), a Federal regulatory agency 
     shall not adopt any regulation, order, or guidance described 
     in paragraph (1), and a State regulatory agency is preempted 
     by section 101 from adopting any regulation, order, or 
     guidance described in paragraph (1), unless--
       (A) such regulation, order, or guidance is consistent with 
     section 101;
       (B) such regulation, order, or guidance does not add to the 
     requirements of such section; and
       (C) such agency finds, in connection with the issuance of 
     such regulation, order, or guidance, that--
       (i) there is a substantial justification for the 
     regulation, order, or guidance;
       (ii) the methods selected to carry out that purpose--

       (I) are substantially equivalent to the requirements 
     imposed on records that are not electronic records; and

[[Page H4117]]

       (II) will not impose unreasonable costs on the acceptance 
     and use of electronic records; and

       (iii) the methods selected to carry out that purpose do not 
     require, or accord greater legal status or effect to, the 
     implementation or application of a specific technology or 
     technical specification for performing the functions of 
     creating, storing, generating, receiving, communicating, or 
     authenticating electronic records or electronic signatures.
       (3) Performance standards.--
       (A) Accuracy, record integrity, accessibility.--
     Notwithstanding paragraph (2)(C)(iii), a Federal regulatory 
     agency or State regulatory agency may interpret section 
     101(d) to specify performance standards to assure accuracy, 
     record integrity, and accessibility of records that are 
     required to be retained. Such performance standards may be 
     specified in a manner that imposes a requirement in violation 
     of paragraph (2)(C)(iii) if the requirement (i) serves an 
     important governmental objective; and (ii) is substantially 
     related to the achievement of that objective. Nothing in this 
     paragraph shall be construed to grant any Federal regulatory 
     agency or State regulatory agency authority to require use of 
     a particular type of software or hardware in order to comply 
     with section 101(d).
       (B) Paper or printed form.--Notwithstanding subsection 
     (c)(1), a Federal regulatory agency or State regulatory 
     agency may interpret section 101(d) to require retention of a 
     record in a tangible printed or paper form if--
       (i) there is a compelling governmental interest relating to 
     law enforcement or national security for imposing such 
     requirement; and
       (ii) imposing such requirement is essential to attaining 
     such interest.
       (4) Exceptions for actions by government as market 
     participant.--Paragraph (2)(C)(iii) shall not apply to the 
     statutes, regulations, or other rules of law governing 
     procurement by the Federal or any State government, or any 
     agency or instrumentality thereof.
       (c) Additional Limitations.--
       (1) Reimposing paper prohibited.--Nothing in subsection (b) 
     (other than paragraph (3)(B) thereof) shall be construed to 
     grant any Federal regulatory agency or State regulatory 
     agency authority to impose or reimpose any requirement that a 
     record be in a tangible printed or paper form.
       (2) Continuing obligation under government paperwork 
     elimination act.--Nothing in subsection (a) or (b) relieves 
     any Federal regulatory agency of its obligations under the 
     Government Paperwork Elimination Act (title XVII of Public 
     Law 105-277).
       (d) Authority To Exempt From Consent Provision.--
       (1) In general.--A Federal regulatory agency may, with 
     respect to matter within its jurisdiction, by regulation or 
     order issued after notice and an opportunity for public 
     comment, exempt without condition a specified category or 
     type of record from the requirements relating to consent in 
     section 101(c) if such exemption is necessary to eliminate a 
     substantial burden on electronic commerce and will not 
     increase the material risk of harm to consumers.
       (2) Prospectuses.--Within 30 days after the date of 
     enactment of this Act, the Securities and Exchange Commission 
     shall issue a regulation or order pursuant to paragraph (1) 
     exempting from section 101(c) any records that are required 
     to be provided in order to allow advertising, sales 
     literature, or other information concerning a security issued 
     by an investment company that is registered under the 
     Investment Company Act of 1940, or concerning the issuer 
     thereof, to be excluded from the definition of a prospectus 
     under section 2(a)(10)(A) of the Securities Act of 1933.
       (e) Electronic Letters of Agency.--The Federal 
     Communications Commission shall not hold any contract for 
     telecommunications service or letter of agency for a 
     preferred carrier change, that otherwise complies with the 
     Commission's rules, to be legally ineffective, invalid, or 
     unenforceable solely because an electronic record or 
     electronic signature was used in its formation or 
     authorization.

     SEC. 105. STUDIES.

       (a) Delivery.--Within 12 months after the date of the 
     enactment of this Act, the Secretary of Commerce shall 
     conduct an inquiry regarding the effectiveness of the 
     delivery of electronic records to consumers using electronic 
     mail as compared with delivery of written records via the 
     United States Postal Service and private express mail 
     services. The Secretary shall submit a report to the Congress 
     regarding the results of such inquiry by the conclusion of 
     such 12-month period.
       (b) Study of Electronic Consent.--Within 12 months after 
     the date of the enactment of this Act, the Secretary of 
     Commerce and the Federal Trade Commission shall submit a 
     report to the Congress evaluating any benefits provided to 
     consumers by the procedure required by section 
     101(c)(1)(C)(ii); any burdens imposed on electronic commerce 
     by that provision; whether the benefits outweigh the burdens; 
     whether the absence of the procedure required by section 
     101(c)(1)(C)(ii) would increase the incidence of fraud 
     directed against consumers; and suggesting any revisions to 
     the provision deemed appropriate by the Secretary and the 
     Commission. In conducting this evaluation, the Secretary and 
     the Commission shall solicit comment from the general public, 
     consumer representatives, and electronic commerce businesses.

     SEC. 106. DEFINITIONS.

       For purposes of this title:
       (1) Consumer.--The term ``consumer'' means an individual 
     who obtains, through a transaction, products or services 
     which are used primarily for personal, family, or household 
     purposes, and also means the legal representative of such an 
     individual.
       (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 independently to initiate an action or respond to 
     electronic records or performances in whole or in part 
     without review or action by an individual at the time of the 
     action or response.
       (4) Electronic record.--The term ``electronic record'' 
     means a contract or other 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 a contract or other 
     record and executed or adopted by a person with the intent to 
     sign the record.
       (6) Federal regulatory agency.--The term ``Federal 
     regulatory agency'' means an agency, as that term is defined 
     in section 552(f) of title 5, United States Code.
       (7) Information.--The term ``information'' means data, 
     text, images, sounds, codes, computer programs, software, 
     databases, or the like.
       (8) Person.--The term ``person'' means an individual, 
     corporation, business trust, estate, trust, partnership, 
     limited liability company, association, joint venture, 
     governmental agency, public corporation, or any other legal 
     or commercial entity.
       (9) 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.
       (10) Requirement.--The term ``requirement'' includes a 
     prohibition.
       (11) Self-regulatory organization.--The term ``self-
     regulatory organization'' means an organization or entity 
     that is not a Federal regulatory agency or a State, but that 
     is under the supervision of a Federal regulatory agency and 
     is authorized under Federal law to adopt and administer rules 
     applicable to its members that are enforced by such 
     organization or entity, by a Federal regulatory agency, or by 
     another self-regulatory organization.
       (12) State.--The term ``State'' includes the District of 
     Columbia and the territories and possessions of the United 
     States.
       (13) Transaction.--The term ``transaction'' means an action 
     or set of actions relating to the conduct of business, 
     consumer, or commercial affairs between two or more persons, 
     including any of the following types of conduct:
       (A) the sale, lease, exchange, licensing, or other 
     disposition of (i) personal property, including goods and 
     intangibles, (ii) services, and (iii) any combination 
     thereof; and
       (B) the sale, lease, exchange, or other disposition of any 
     interest in real property, or any combination thereof.

     SEC. 107. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     title shall be effective on October 1, 2000.
       (b) Exceptions.--
       (1) Record Retention.--
       (A) In general.--Subject to subparagraph (B), this title 
     shall be effective on March 1, 2001, with respect to a 
     requirement that a record be retained imposed by--
       (i) a Federal statute, regulation, or other rule of law, or
       (ii) a State statute, regulation, or other rule of law 
     administered or promulgated by a State regulatory agency.
       (B) Delayed effect for pending rulemakings.--If on March 1, 
     2001, a Federal regulatory agency or State regulatory agency 
     has announced, proposed, or initiated, but not completed, a 
     rulemaking proceeding to prescribe a regulation under section 
     104(b)(3) with respect to a requirement described in 
     subparagraph (A), this title shall be effective on June 1, 
     2001, with respect to such requirement.
       (2) Certain guaranteed and insured loans.--With regard to 
     any transaction involving a loan guarantee or loan guarantee 
     commitment (as those terms are defined in section 502 of the 
     Federal Credit Reform Act of 1990), or involving a program 
     listed in the Federal Credit Supplement, Budget of the United 
     States, FY 2001, this title applies only to such transactions 
     entered into, and to any loan or mortgage made, insured, or 
     guaranteed by the United States Government thereunder, on and 
     after one year after the date of enactment of this Act.
       (3) Student loans.--With respect to any records that are 
     provided or made available to a consumer pursuant to an 
     application for a loan, or a loan made, pursuant to title IV 
     of the Higher Education Act of 1965, section 101(c) of this 
     Act shall not apply until the earlier of--
       (A) such time as the Secretary of Education publishes 
     revised promissory notes under section 432(m) of the Higher 
     Education Act of 1965; or
       (B) one year after the date of enactment of this Act.
                     TITLE II--TRANSFERABLE RECORDS

     SEC. 201. TRANSFERABLE RECORDS.

       (a) Definitions.--For purposes of this section:
       (1) Transferable record.--The term ``transferable record'' 
     means an electronic record that--
       (A) would be a note under Article 3 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 loan secured by real property.
     A transferable record may be executed using an electronic 
     signature.
       (2) Other definitions.--The terms ``electronic record'', 
     ``electronic signature'', and ``person'' have the same 
     meanings provided in section 106 of this Act.

[[Page H4118]]

       (b) Control.--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.
       (c) Conditions.--A system satisfies subsection (b), 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--
       (1) 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;
       (2) the authoritative copy identifies the person asserting 
     control as--
       (A) the person to which the transferable record was issued; 
     or
       (B) if the authoritative copy indicates that the 
     transferable record has been transferred, the person to which 
     the transferable record was most recently transferred;
       (3) the authoritative copy is communicated to and 
     maintained by the person asserting control or its designated 
     custodian;
       (4) 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;
       (5) 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
       (6) any revision of the authoritative copy is readily 
     identifiable as authorized or unauthorized.
       (d) Status as Holder.--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), 9-308, or 
     revised section 9-330 of the Uniform Commercial Code are 
     satisfied, the rights and defenses of a holder in due course 
     or a purchaser, respectively. Delivery, possession, and 
     endorsement are not required to obtain or exercise any of the 
     rights under this subsection.
       (e) Obligor Rights.--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.
       (f) Proof of Control.--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) UCC References.--For purposes of this subsection, all 
     references to the Uniform Commercial Code are to the Uniform 
     Commercial Code as in effect in the jurisdiction the law of 
     which governs the transferable record.

     SEC. 202. EFFECTIVE DATE.

       This title shall be effective 90 days after the date of 
     enactment of this Act.
       TITLE III--PROMOTION OF INTERNATIONAL ELECTRONIC COMMERCE

     SEC. 301. PRINCIPLES GOVERNING THE USE OF ELECTRONIC 
                   SIGNATURES IN INTERNATIONAL TRANSACTIONS.

       (a) Promotion of Electronic Signatures.--
       (1) Required actions.--The Secretary of Commerce 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, for the purpose of facilitating the 
     development of interstate and foreign commerce.
       (2) Principles.--The principles specified in this paragraph 
     are the following:
       (A) 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.
       (B) 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.
       (C) 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.
       (D) Take a nondiscriminatory approach to electronic 
     signatures and authentication methods from other 
     jurisdictions.
       (b) 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.
       (c) Definitions.--As used in this section, the terms 
     ``electronic record'' and ``electronic signature'' have the 
     same meanings provided in section 106 of this Act.
            TITLE IV--COMMISSION ON ONLINE CHILD PROTECTION

     SECTION 401. AUTHORITY TO ACCEPT GIFTS.

       Section 1405 of the Child Online Protection Act (47 U.S.C. 
     231 note) is amended by inserting after subsection (g) the 
     following new subsection:
       ``(h) Gifts, Bequests, and Devises.--The Commission may 
     accept, use, and dispose of gifts, bequests, or devises of 
     services or property, both real (including the use of office 
     space) and personal, for the purpose of aiding or 
     facilitating the work of the Commission. Gifts or grants not 
     used at the termination of the Commission shall be returned 
     to the donor or grantee.''.
       And the House agree to the same.
       That the Senate recede from its disagreement to the 
     amendment of the House to the title of the bill and agree to 
     the same.

     Tom Bliley,
     Billy Tauzin,
     Michael G. Oxley,
     John D. Dingell,
     Edward J. Markey,
                                Managers on the Part of the House.

     From the Committee on Commerce, Science, and Transportation:
     John McCain,
     Conrad Burns,
     Ted Stevens,
     Slade Gorton,
     Spencer Abraham,
     Ernest F. Hollings,
     James M. Inouye,
     Jay Rockefeller,
     John F. Kerry,
     Ron Wyden,
     From the Committee on Banking, Housing, and Urban Affairs, 
     for items within their jurisdiction:
     Paul S. Sarbanes,
     From the Committee on the Judiciary, for items within their 
     jurisdiction:
     Orrin Hatch,
     Patrick Leahy,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendments of the House 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, submit the following joint statement to the House 
     and the Senate in explanation of the effect of the action 
     agreed upon by the managers and recommended in the 
     accompanying conference report:
       The House amendment to the text of the bill struck all of 
     the Senate bill after the enacting clause, and inserted a 
     substitute text.
       The Senate recedes from its disagreement to the amendment 
     of the House with an amendment that is a substitute for the 
     Senate bill and House amendment.
       The managers on the part of the House and Senate met on May 
     18, 2000, and reconciled the differences between the two 
     bills.
     Tom Bliley,
     Billy Tauzin,
     Michael G. Oxley,
     John D. Dingell,
     Edward J. Markey,
                                Managers on the Part of the House.

     From the Committee on Commerce, Science, and Transportation:
     John McCain,
     Conrad Burns,
     Ted Stevens,
     Slade Gorton,
     Spencer Abraham,
     Ernest F. Hollings,
     Daniel K. Inouye,
     Jay Rockefeller,
     John F. Kerry,
     Ron Wyden,
     From the Committee on Banking, Housing, and Urban Affairs, 
     for items within their jurisdiction:
     Paul S. Sarbanes,
     From the Committee on the Judiciary, for items within their 
     jurisdiction:
     Orrin Hatch,
     Patrick Leahy,
     Managers on the Part of the Senate.

                          ____________________