[Congressional Record Volume 146, Number 74 (Wednesday, June 14, 2000)]
[House]
[Pages H4346-H4366]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




PROVIDING FOR CONSIDERATION OF S. 761, ELECTRONIC SIGNATURES IN GLOBAL 
                       AND NATIONAL COMMERCE ACT

  Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 523 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

[[Page H4347]]

                              H. Res. 523

       Resolved, That upon adoption of this resolution it shall be 
     in order to consider the conference report to accompany 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. All points of order against the 
     conference report and against its consideration are waived. 
     The conference report shall be considered as read.

  The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is 
recognized for 1 hour.
  Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to my friend, the gentleman from Ohio (Mr. 
Hall), pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purpose 
of debate only.
  (Mr. SESSIONS asked and was given permission to revise and extend his 
remarks, and include extraneous material.)
  Mr. SESSIONS. Mr. Speaker, the legislation before us today on this 
beautiful Flag Day provides for the consideration of S. 761, the 
Electronic Signatures in Global and National Commerce Act. The rule 
waives all points of order against the conference report and against 
its consideration. The rule provides that the conference report shall 
be considered as read.
  Mr. Speaker, today the House takes a step forward towards promoting 
the new economy and facilitating the growth of electronic commerce. 
Important legislation to update the laws that govern how business is 
transacted will be considered by Congress with the passage of this law. 
Furthermore, the underlying legislation will allow all Americans to 
benefit from the efficiencies resulting from advances in technology.
  Under current law, contracts and agreements among businesses and 
individuals are considered binding when the second party indicates 
agreement to terms with that signature. This system has worked fine for 
many years. However, the widespread use of computers and electronic 
means of communication have made this system antiquated and 
inefficient. The Electronic Signatures in Global and National Commerce 
Act will ensure that the United States will remain the leader in the 
21st Century marketplace by giving legal and uniform status to 
electronic signatures. Electronic signatures would become binding, just 
like a handwritten signature.
  Under the legislation, Americans would still be covered by the 
existing consumer protection laws should they choose to use this type 
of signature. Additionally, the legislation requires consent of the 
consumer to use electronic signature. No consumer would be forced into 
using electronic signature if they would feel more comfortable using a 
handwritten or normal signature.
  Electronic signatures will change the way businesses interact with 
other businesses, how business works with their customers, and even how 
government serves its citizenry. Electronic signatures will make it 
easier for people to pay their bills, apply for a loan, trade 
securities, purchase goods, and contract services. Electronic 
signatures will also give greater protections to consumers through 
advanced encryption technologies. Not only is it far more difficult to 
fraudulently use an electronic signature than traditional signature, 
but electronic signatures leave a trail that would lead to the door of 
those who seek to defraud us.
  Much has been done by this Congress to encourage the development of 
so-called new economy industries. Last summer, this Congress passed 
legislation that helped all but eliminate the computer glitch known as 
the Y2K bug. A few months later, the Republican majority brought 
legislation to the House floor to protect patents for Americans 
inventors and innovators. Recently, the House passed a moratorium on 
taxation of the Internet.
  The legislation we are considering today is yet another effort by the 
Republican-led Congress to ensure that our Nation remains at the 
forefront of the emerging electronic global marketplace.
  I would urge my colleagues to support this rule.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HALL of Ohio. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I thank the gentleman from Texas (Mr. Sessions) for 
yielding me time.
  Mr. Speaker, as my colleague from Texas has explained, this rule 
waives all points of order against the conference report.
  Electronic commerce is growing at an explosive rate. In a recent 
survey of top business executives, it indicates that in the next 2 
years, many companies expect a seven-fold increase in their Internet 
sales. By the year 2002, on-line sales could make up 25 percent of 
total sales. That is a revolution in the way Americans do business.
  However, our laws are still written for the pen and paper days. We 
must adopt our legal system to keep pace with the digital age.
  The measure before us would give legal validity to electronic 
signatures on business transactions, and this will help e-commerce by 
providing a uniform standard among the states. I am pleased that this 
conference agreement includes protections aimed at reducing consumer 
fraud.
  This conference agreement represents a bipartisan consensus with 
broad support among high-tech companies, State Attorneys General and 
consumer groups. My understanding is that the President will sign it. 
It looks like a good bill and a good rule. I support the rule and the 
conference report.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, a lot of the work that has been done on this, not only 
the bill but also the conference report, is directly as a result of 
those Members who serve on the Committee on Commerce. Today I am 
pleased to be with the gentleman from Louisiana (Mr. Tauzin), who is a 
part of not only this negotiation, but also the ongoing effort to make 
this bill and further bills that may be in our future better for 
consumers of America.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Louisiana (Mr. Tauzin).
  (Mr. TAUZIN asked and was given permission to revise and extend his 
remarks.)
  Mr. TAUZIN. Mr. Speaker, I rise in support of this rule and encourage 
Members not only to support the rule, but to adopt this conference 
report. This is the culmination of several attempts in this Congress 
and other Congresses to find a compromise with the other body and with 
Members of this body that would properly and legally make valid 
signatures of Americans, and, in fact, signatures of citizens of the 
world, in the electronic commerce age, and also to make the records, 
electronic records behind the documents and agreements we reach 
electronically, legally binding records upon the parties who sign those 
agreements and enter into those contracts in the electronic age.
  Americans tell us that privacy and security are the two biggest 
concerns as we enter this new e-commerce age, making sure in effect 
that as we enter this age, that citizens who take advantage of 
electronic commerce, both to sell their products and services, or to 
purchase them, will have the knowledge that, number one, they are 
dealing in a secure system, so this bill is written in a way that is 
technologically neutral and calls upon the genius and creativity of 
this amazing new marketplace to develop the highly encrypted products 
that are going to make commerce in the electronic age even more secure 
than commerce in the paper age.
  Secondly, I want to commend this House and this Congress for the 
activities we have already undertaken to protect privacy in the key 
areas that are most of concern to Americans, the areas of medical 
information privacy, the area of children's information privacy, and, 
most recently, in the financial services bill, in protecting people's 
privacy as they deal with their financial records, with mortgages and 
bank accounts and security transactions in the Internet age.
  I also want to point out that there are some people that are afraid 
of this age. I suppose every time there were major changes in the way 
Americans did business, in the way we interacted with one another, 
there was fear.

[[Page H4348]]

  When the telegraph first came upon the scene, I can assure you there 
were the similar fears that the telegraph was somehow going to create a 
world that people would live in fear of. In fact, there is a wonderful 
book called ``The Victorian Internet'' which traces the history of the 
telegraph and speaks of the same concerns that people in the world had 
about the telegraph that we hear about the Internet today.
  But what was true with the telegraph is also true with the Internet 
and electronic commerce: It is upon us, it is an age which is arriving 
rapidly, and more and more Americans are finding that they can have 
more efficient businesses and more efficient transactions when they in 
fact become conversant with the Internet and conversant with the 
possibilities of the Internet in learning and trading and in long 
distance medicine, in amazing new opportunities it will make for the 
people of the world.
  This bill is a major step forward in making sure that that world is 
secure; that there are legally binding, responsible actions taken as a 
result of interacting on the Internet; that when I sell my products to 
you and you sign up, it is as valid a deal as if you came to my store 
and purchased my products.

                              {time}  1115

  I can count on them to honestly keep their contract, and they can 
honestly count on me to live up to my agreement to sell them those 
products and services according to the terms of our agreement.
  Like many bills, this is a compromise. This bill contains in my 
opinion a little overreach. It contains a little too much bureaucracy, 
a little too much in the way in which we insist that people consent 
first to join this Internet world. It may need some work in the future 
for us to improve it.
  I am the first to tell Members it is not perfect in that regard. It 
literally goes overboard to make sure that when people consent to be 
part of the electronic age, that they really consent. It even has 
language in it that says that we have to prove that we are capable of 
receiving all the documents and notices and information that we are 
consenting to be part of in the electronic age; not just giving our e-
mail address as we would give our phone number and address in the paper 
age, but actually proving that our computer is capable of handling all 
the information that is going to be faxed or e-mailed to us as part of 
the electronic transaction.
  Let me also say that nothing in this bill requires one to be part of 
this electronic commerce age if they do not want to be, no more than 
one is required to own a credit card if they do not want to. My father, 
whom I lost 9 years ago and miss dearly, and will this summer when we 
always celebrate his birthday, I do not think he ever owned a credit 
card. He never made a credit purchase. I have made up for it, believe 
me. I use a lot of credit.
  But the bottom line is that nothing requires an American to use the 
services of the Internet or to use this bill to sign electronically for 
purchases and sales. This is purely voluntary. It is an opt-in system. 
We have to consent to it. We have to know what we are consenting to. We 
have to prove we are capable of literally giving the consent, prove we 
have the equipment and means by which to engage in electronic business 
in this new age. It is a pretty extensive consent agreement provision.
  It also contains language making sure that the consumer protection 
laws of every State are incorporated, that they are maintained. Nothing 
takes away from the protections that consumers now enjoy from those who 
would like to defraud us.
  The beautiful thing about this new age is that electronic signatures 
can be more precise, much more precisely identified, than the signature 
we write on a paper that can be copied by some people. Electronic 
signatures with heavy encryption can be much more secure than the world 
of paper we now live in.
  Secondly, it can be much more efficient. I want to invite all 
Americans to think of this. When we used to have a business in the old 
brick and mortar age before the Internet that depended upon citizens 
being able to come into the store, get to the store in a car, by bike, 
by foot, we had a limited marketplace.
  Today with the Internet the marketplace is global. Today, with a 
little store in Chack Bay, Louisiana, selling tobasco or other great 
seasonings, we can enjoy now a worldwide market on the Internet and 
sell to a whole community of people that is global.
  Making that system work efficiently and creating legally binding 
agreements in that system is what this bill is all about, literally to 
facilitate global commerce. The bill contains features that insist that 
our government negotiate with other countries, to insist that they have 
similar legally binding provisions in their laws so when our citizens 
interact and sell products to their citizens or vice versa, when we buy 
products from them, we both have legally binding agreements, just as 
much as we do here in the good old U.S.A. on this great Flag Day.
  This is again not a perfect bill, it may need refinements in the 
future. I think it is a little too bureaucratic than I would like, but 
it is a great step forward. I endorse it fully. This rule ought to be 
adopted. We need to pass this bill.
  Mr. Speaker, I would urge my colleagues not only to pay this bill 
some attention, but also to do what they can to inform the citizens on 
their own websites about this new capability that Congress is enacting 
today to further advance the security of transaction in the e-commerce 
age and to further advance the ability of Americans to be part of this 
incredible new opportunity age that the Internet and e-commerce is 
going to make for all of our citizens.
  Mr. SESSIONS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Dreier), who has been an active 
participant in ensuring that not only e-commerce but the financial 
services of this country are not only market-based and leading edge, 
but also consumer-friendly.
  (Mr. DREIER asked and was given permission to revise and extend his 
remarks.)
  Mr. DREIER. Mr. Speaker, I thank my friend for yielding time to me. I 
congratulate him on the fine work that he has done on this extremely 
important issue.
  Mr. Speaker, I rise in strong support of this rule because it 
provides for the consideration of a conference report that is 
critically important to businesses and consumers in the 21st century 
information economy.
  Senate Bill 761 will empower consumers of financial products and 
other goods and services, and establish the framework for competition 
in the emerging electronic marketplace. For this, I want to applaud the 
gentleman from Virginia (Chairman Bliley) for his strong efforts and 
the great work he has done in moving this legislation forward.
  I know I saw my friend, the gentleman from Louisiana (Mr. Tauzin) 
someplace. There he is, and I want to congratulate him, too, for all 
the effort he has put into this.
  Enactment of this e-sign conference report will transform the way we 
work, the way we are educated, the way we contract for goods and 
services, and the way we are governed. The next great transition in the 
21st century economy is likely to result in many large corporations 
moving the bulk of their inventory, production, and supply operations 
to an online environment.
  Establishment of a clear, uniform national framework governing both 
digital signatures and records will allow American businesses to become 
significantly more efficient and productive through business-to-
business use of the Internet.
  Mr. Speaker, as important as this measure is to our high-tech 
economy, it is not just about the way business will do business. Our 
actions today will impact people. We all know how the quality of life 
of so many hard-working American families is tied directly to the 
amount of quality time away from the work and chores of daily life.
  This landmark legislation will make it easier for people using just a 
computer and a modem to pay their bills, apply for mortgages, trade 
securities, and purchase goods and services wherever and whenever they 
choose. That will be a win-win clearly for millions of American working 
families.
  As important as this bill is to today's global electronic 
marketplace, we need to be prepared to deal with the reality that the 
pace of innovation and change in the new Internet economy has a direct 
impact on the pace of legislative innovation required here in the 
Congress.

[[Page H4349]]

  It is not a criticism of this very strong legislation to recognize 
that when the U.S. computer industry operates with a 3-month innovation 
cycle, the new economy may render some of its provisions obsolete 
unless we move quickly on follow-up legislation.
  There is a need, for example, to clarify the legality and reliability 
of electronic authentication applications. There is also concern that 
S. 761 will impose unnecessary burdens on businesses and consumers, and 
the ambiguities in the conference report may actually create new 
avenues for class action litigation.
  For example, under the conference report, consumers who initially 
consent in paper and ink to receive electronic records will need to 
either reconsent or reconfirm or confirm their consent by electronic 
means. Then each time there are changes in any of the hardware or 
software requirements for accessing a record that consumers have 
consented to receive electronically, the provider must obtain new 
consents from all of the affected consumers.
  In addition, it must be possible to ``reasonably demonstrate'' that a 
consumer will be able to access the various forms of electronic records 
that the consumer has consented to receive. This is a requirement that 
has no parallel in the paper world. To ensure that consumers can get 
the full benefits of these electronic records provisions, consumers 
should only need to consent once either on paper or electronically, 
with the ability to withdraw their consent if changes create a problem 
for them.
  There is concern that S. 761 may actually create a new basis for 
denying legal effect to electronic records if they are not in a form 
that could be retained and accurately reproduced for later reference by 
any parties who are entitled to retain them. It is my hope, Mr. 
Speaker, that Congress will be able to respond effectively to these and 
other challenges that would be brought on by the rapidly changing 
nature of the Internet economy.
  In the meantime, as I have said, this is a bill that deserves 
overwhelmingly strong bipartisan support. I join again in 
congratulating my colleagues, who have worked long and hard on this. I 
am proud to have been a strong supporter of this effort for the past 
several years, and I urge adoption of the rule and the conference 
report.
  Mr. HALL of Ohio. Mr. Speaker, I yield 3 minutes to the gentleman 
from Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, I thank the gentleman from Ohio for yielding 
time to me.
  Mr. Speaker, I rise to support the conference report on the e-sign 
bill. I want to congratulate the gentleman from Virginia (Chairman 
Bliley) for his excellent leadership on this bill, along with the 
gentleman from Michigan (Mr. Dingell), the gentleman from Louisiana 
(Mr. Tauzin), the gentleman from Ohio (Mr. Oxley). This is an historic 
day on the floor of the House.
  The legislation will create a legal framework for electronic commerce 
in the new economy, but the new economy must have old values. That is 
the formula that we are constructing here on the floor today. It will 
grow, electronic commerce, as an increasingly important part of our 
economy, and increasingly it will be important for us to be able to 
authenticate and to validate electronic transaction.
  This is important for both ends of the transaction. For both the 
buyer and the seller there has to be a way in which there is 
authentication. There has to be a way in which there is validation.
  As we come here today, we begin the new era of a digital John Hancock 
which can ensure that an electronic signature is valid and that records 
are established that guarantee that both ends of the transaction are in 
fact valid.
  Today many secure electronic technologies such as cryptographic 
digital signatures allow consumers and businesses to send a file across 
the Internet embodying a contract, a signed contract, that can be 
authenticated on the other end of the transmission. The increased 
comfort people will have with the technology and their legal rights 
will serve to enhance electronic commerce and continue to drive 
electronic growth.
  Think of this: In 1999, there was $3.4 trillion worth of electronic 
commerce in the United States, $3.4 trillion. How much of that was 
online? Pick a number in your own minds of the $3.4 trillion; $20 
billion, that is all, about 7/10ths of 1 percent. As each year goes by 
there is going to be a dramatic increase.
  In order to make people feel comfortable to move their transactions 
from the real world to the virtual world, we must give them the same 
kinds of guarantees. This legislation strikes the right balance by 
clarifying that electronic contracts or agreements that are otherwise 
required to be in writing must accurately reflect the information set 
forth in the contract after it was first generated, and must remain 
accessible for later reference, transmission, and printing.
  So Mr. Speaker, this is a great day. I think a new era is dawning. I 
want to congratulate the gentleman from Virginia (Mr. Bliley) once 
again for his great leadership, and the gentleman from Michigan (Mr. 
Dingell), the gentleman from Louisiana (Mr. Tauzin), and the gentleman 
from Ohio (Mr. Oxley).
  Mr. Speaker, I rise to support the conference report on the ESIGN 
bill and I want to congratulate Chairman Bliley for his fine work in 
the conference and commend Mr. Dingell, Mr. Tauzin, and Mr. Oxley for 
their excellent work as well.
  We return to the House today with a conference report that advances 
the needs of the Digital Age without compromising fundamental consumer 
protections.
  This legislation provides a legal framework for electronic commerce 
in the new economy. It's clear that as electronic commerce grows it 
will become increasingly important to authenticate and validate 
electronic transactions. This is important for both ends of any 
transaction, for both the buyer and the seller. Effective 
authentication of electronic signatures will help to reduce fraud and 
financial losses.
  Technology exists today that permits an electronic signature--a 
`digital John Hancock'--to be affixed to computer files in a manner 
that is difficult to reproduce. Today, many secure electronic 
technologies such as cryptographic digital signatures, allow consumers 
and businesses to send a file across the Internet embodying a contract, 
a signed contract, that can be authenticated on the other end of the 
transmission. The increased comfort that people will have with the 
technology and their legal rights will serve to enhance electronic 
commerce and continue to drive economic growth.
  Many current laws, however, do not legally recognize the validity of 
electronic signatures, contracts, or records. Many laws, regulations 
and procedures require ``written,'' real world signatures on documents, 
or the provision of ``paper'' records, both for commercial 
transactions.
  Without question many existing requirements for written records are 
antiquated whose provision or availability in an electronic version of 
the same information can suffice to meet any legal requirements or 
policy goals.
  However, there are many other existing requirements for written 
records which are not antiquated and whose provision or availability in 
written form serves clear consumer protection goals. As we progress 
into the digital future, this conference report is careful not to 
jettison prematurely many important consumer protection provisions 
simply to demonstrate our enthusiasm for all things digital.
  The legislation strikes the right balance by clarifying that 
electronic contracts or agreements that are otherwise required to be in 
writing must accurately reflect the information set forth in the 
contract after it was first generated and must remain accessible for 
later reference, transmission, and printing. The conference report also 
preserves a consumers right to receive records in writing. If a 
consumer wants a record that is required to be in writing to be 
provided in writing, a consumer still has that right while allowing 
other consumers, who may prefer to receive records in electronic form, 
to elect to do so.
  This conference report also fixes and vastly improves the process by 
which consumers may ``opt-in'' to receiving electronic records. A 
consumer wishing to receive specific records in electronic form must 
separately and affirmatively consent to the provision of such records 
in electronic form in order for a vendor to provide electronic records.

  In addition this legislation also safeguards the consumer protection 
policies that have historically served to adequately inform consumers 
of potentially life-changing events or safety issues. The conference 
report wisely requires written notices for any notice dealing with 
court orders and official court documents--including legal briefs and 
court pleadings, any notice concerning the cancellation of utility 
services such as water, heat or power service, for foreclosure or 
eviction notices. It also would require the continuation of written

[[Page H4350]]

notices for the cancellation or termination of health insurance or 
benefits or life insurance benefits.
  We are still a long way from the day when computers will be as 
ubiquitous as the telephone, but this conference report helps set the 
legal framework for that day. The ``ESIGN'' bill takes that important 
step into the Digital Age.
  I again, want to commend Chairman Bliley on this landmark bill and 
commend Mr. Dingell, Chairman Tauzin, and Mr. Oxley for their fine 
bipartisan work.
  Mr. Speaker, I also want to mention of few items related to the 
financial implications of the conference report. As many members may 
recall, H.R. 1714, the House version of the Conference Report, 
initially contained a separate securities law title. Although the 
Conference Report does not include separate securities title, it 
contains language intended to resolve satisfactorily the various issues 
that were addressed by the House securities title and which were the 
subject of SEC Chairman Levitt's April 21, 2000 letter to the 
conferees.
  For example, Section 104(a) of the Conference Report protects 
standards and formats developed by the SEC for electronic filing 
systems such as EDGAR and the IARD, as well as for systems are 
developed by securities industry self-regulatory organization filing 
systems such as the CRD, which the NASD and the states use for 
registering securities firms and their personnel.
  Section 101(d) recognizes the importance of accuracy and 
accessibility in electronic records, which is of utmost importance for 
investor protection and prevention of fraud. Section 104(b)(3) 
recognizes the need for agencies, such as the SEC, to provide 
performance standards relating to accuracy, document integrity, and 
accessibility in their electronic recordkeeping and retention rules. 
This is intended to preserve requirements such as the SEC's existing 
electronic recordkeeping rule, Rule 17a-4(f), which specifies that 
electronic recordkeeping systems must preserve records in a non-
rewriteable and non-erasable manner. The Conferees also expect the SEC 
to work with the securities SROs to the extent necessary to ensure that 
accuracy, accessibility, and integrity standards also cover SRO 
recordkeeping requirements in an electronic environment.
  Section 104 of the Conference Report specifically permits federal 
regulatory agencies, such as the SEC, to interpret the law to require 
retention of written records in paper form if there is a compelling 
governmental interest in law enforcement for imposing such requirement, 
and if, imposing such requirement is essential to attaining such 
interest. For example, we specifically expect the SEC would be able to 
use this provision to require brokers to keep written records of all 
disclosures and agreements required to be obtained by the SEC's penny 
stock rules.
  Finally, the Conference Report's consent provisions similar to much 
of the SECs guidance in the electronic delivery area. Section 104(d)(1) 
permits agencies such as the SEC to continue to provide flexibility in 
interpreting consent provisions anticipated by the Conference Report. 
In addition, a specific provision contained in Section 104(d)(2) 
anticipates that the SEC will act to clarify that documents, such as 
sales literature, that appear on the same website as, or which are 
hyperlinked to, the final prospectus required to be delivered under the 
federal securities laws, can continue to be accessed on a website as 
they are today under SEC guidance for electronic delivery.
  Mr. HALL of Ohio. Mr. Speaker, I yield myself the balance of my time, 
although I really do not have much to add. The rule and resolution 
looks in very good shape. Many of us really support it.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, it would be wonderful if we all agreed on all points of 
legislation like we are agreeing today on this conference report. What 
we have heard today described is an agreement that we have made between 
the parties, the Democrats and the Republicans, about a new way of 
doing business.

                              {time}  1130

  In fact, the agreement that we believe that this conference report 
represents is not exactly leading edge but it is a beginning. It is a 
start of an opportunity for consumers, for retailers, for people who 
are engaged in financial transaction and financial services to 
encourage a new world that is there.
  We have heard the gentleman from Louisiana (Mr. Tauzin) describe his 
view and vision, along with the chairman of the Committee on Rules, 
that they felt like that there were too many roadblocks that are put in 
the way of consumers and too many things that were required, answers 
back and forth and limitations being placed upon consumers.
  This is a good start and it does not take a complete agreement to 
have a deal. What we have today is a deal. What we have today is a rule 
that has been agreed to, where both sides have come to the table, have 
openly agreed; and so we are going to support this conference report.
  I would submit an article of some writing that has been in the paper 
today about how we are going to have to continue in our endeavor to 
make sure that in the future that we come back and readdress this issue 
so that consumers and people engaged in financial services have fewer 
roadblocks in order to get their job done. I support this rule.

               [From the Financial Times, June 12, 2000]

              Caveat Surfer Should Be the E-Commerce Motto

                           (By Amity Shlaes)

       Perhaps the most exciting thing about the new internet 
     world is that it undermines the assumptions of the old one. 
     In the internet world, we get along without many things we 
     were long assured had to be: centralised authority, 
     standardised addresses and so on. Technologies that would 
     have been dismissed as chaotic a few years ago turn out to 
     function very well without extra regulation, thank you.
       The new world has already found its own muse--the writer 
     Virginia Postrel. She calls for the combating of what she 
     dubs an ideology of stasis--``the notion that the good 
     society is one of stability, predictability and control, and 
     government's responsibility is to curb, direct or end 
     unpredictable market evolution''.
       But chaos, even functioning chaos, is not to everyone's 
     liking. Governments these days are desperate to claim the new 
     e-territory, even to dominate it. On the level of instinct, 
     this strikes most people as laughable. Nothing, not even 
     fund-raising controversy, has subjected Al Gore to more 
     ridicule than his statement that he fathered the internet.
       This naturally does not stop governments from trying. Fear 
     is their main weapon. Without new protections, they suggest, 
     the internet will give rise to Hollywood-type nightmares--
     abuses of consumers, online perverts who prey on eight-year-
     olds, global financial crashes and so on. Some concerns are 
     legitimate--the most serious being Napster--style raids on 
     intellectual property. But governments also raise these 
     issues as a political device.
       In this context, the humdrum push-and-pull about bits of 
     technology legislation making their way through the various 
     Western legislatures takes on new meaning. Consider a 
     skirmish in Washington this week about legislation on 
     internet contracts. Like a new British law, it would allow 
     firms and customers to conclude paper-free transactions. The 
     fact that Congress has made the digital signatures bill the 
     centrepiece of new internet legislation should come as good 
     news to freedom-loving types. For contract law is by its 
     nature private: contracts require only two parties, and 
     diminish, even obviate, the need for nosy government.
       But the e-signature bill also caught the interest of the 
     centralisers. Lawmakers led by Tom Bliley, a Republican 
     Congressman from Virginia, insisted that the old culture of 
     contracts cannot protect consumers from the fresh dangers of 
     the internet. So they inserted requirements so onerous as to 
     deter online consumers, not a crowd noted for its patience in 
     the first place.
       Under the bill as it stood late last week, internet users 
     would have been required to send any number of repeated e-
     mails reconfirming their consent to the contract at every 
     stage of a transaction, as well as demonstrating that they 
     had absorbed every bit of legal boilerplate. Predictably, 
     this provoked the concern of the Charles Schwabs, Dreyfuses 
     and banks of this world. The financial community has the most 
     to lose if the new law deters customers.
       But the extra consumer measures also gave pause to Phil 
     Gramm, chairman of the Senate banking committee. Mr. Gramm is 
     less worried by brokerages than by principle--the principle 
     that the online frontier not be colonised by the old 
     regulatory culture. He points out that the new bill goes 
     beyond anything that already applies in contract law.
       ``What happened to `Let the buyer beware?' '' he asks. 
     ``Common law and a thousand years of paper contracts 
     established duties and responsibilities for people 
     participating in commerce. You don't want to change that 
     relationship so that e-commerce undermines contracts and 
     commerce.'' On Friday, enough of the obstacles were stripped 
     out to win Mr. Gramm's grudging support, but others remained.
       ``We have gone from having two different versions of a bill 
     that would have been an A or an A minus, to a low B at 
     best,'' says James Lucier of Prudential Securities. Henry 
     Judy, a lawyer with the Washington office of Kirkpatrick & 
     Lockhart, has compared US and UK legislation. He says the 
     latter ``is broader, but some of the precise consumer issues 
     dealt with by the US legislation are left in the UK bill to 
     later administrative decisions''. The British e-consumer is 
     not safe from government fiat--as another bill allowing e-
     mail surveillance shows.

[[Page H4351]]

       Nor are e-signatures the only area where the control 
     question is a matter of legislative controversy. During the 
     spring the US media have made internet privacy for shoppers a 
     huge issue. The finance editor of Consumer Reports has 
     demanded that websites create ``in your face'' privacy 
     warnings. The Federal Trade Commission is now pushing 
     Congress to regulate websites.
       On the tax front, the freedom types have been victorious--
     but only for now. Lawmakers led by Congressman Chris Cox of 
     California recently succeeded in extending a moratorium on 
     new taxes on the internet. But this expires in five years and 
     many states are lobbying hard for a nationally co-ordinated 
     sales tax regime.
       Across the Atlantic, the European Commission has been 
     lobbying so strongly for new taxing authority that it has 
     stirred the ire of the US Treasury. Of course, it is easier 
     to bash someone else's tax arrangements than to stand firm on 
     taxes at home. Globally, the tax issue remains in play; the 
     internet may end up bringing more taxation, rather than less.
       Particularly troubling here is the assumption that the 
     internet is inherently more treacherous than the telegraph, 
     the telephone or any other new medium that went before. That 
     is questionable. A few years into the internet era, we have 
     yet to see the electronic world wreak huge damage. Five 
     months and a few days later, concerns about the Year 2000 bug 
     already seem an irrelevance.
       Why not proceed with optimism? After all, we were wise 
     enough to let the internet happen. Now the challenge is to be 
     wise enough to let it grow.

  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  Mr. BLILEY. Mr. Speaker, pursuant to House Resolution 523, I call up 
the conference report on the Senate 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.
  The Clerk read the title of the Senate bill.
  The SPEAKER pro tempore (Mr. Gibbons). Pursuant to the rule, the 
conference report is considered as having been read.
  (For conference report and statement, see proceedings of the House of 
June 8, 2000, at page H4115).
  The SPEAKER pro tempore. The gentleman from Virginia (Mr. Bliley) and 
the gentleman from Michigan (Mr. Dingell) each will control 30 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Bliley).


                             General Leave

  Mr. BLILEY. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and to insert extraneous material on the conference report on S. 761.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. BLILEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, for thousands of years dating back to the ancient 
Egyptians, pen and paper has been the medium by which so much of 
everyday life has been conducted. Paper has been the lifeblood of 
commerce for centuries, but that is changing. Now with the Internet age 
upon us, paper does not have the hold that it once had on so many of 
us. More and more Americans are getting their news from the Internet 
rather than a newspaper. E-mail is replacing handwritten letters. 
Consumers are using e-tickets instead of paper airline tickets. In less 
than 6 years, the Internet has revolutionized the way people 
communicate and conduct business.
  Every day, the line between what has to be done in paper and what can 
be done electronically is being moved. The Internet is stretching the 
creativity and ingenuity of some of the brightest people in our society 
today. It is altering the practices and lives of all of our Nation's 
citizens, and much more is to come. It is appropriate that in the first 
year of the new millennium, Congress is ready to give final approval to 
the legislation before us today that will further move us from the 
paper age to the digital age.
  I think we are all in agreement that Congress should not do anything 
that would stifle the growth of the Internet and electronic commerce. 
That is why 2 years ago the Committee on Commerce began an intensive 
initiative to better understand the issues surrounding the Internet and 
electronic commerce. As a result of those hearings, we saw the need to 
provide legal vitality to electronic documents and electronically 
signed contracts and agreements if electronic commerce was to grow and 
flourish. Rather than seeking to regulate, the committee chose to 
remove those legal roadblocks to unfettered growth of electronic 
commerce. It has been my mantra that when approaching electronic 
commerce issues, Congress' first obligation is to do no harm.
  Last November, the House overwhelmingly passed H. 1714, the 
Electronic Signatures in Global and National Commerce Act, better known 
as E-Sign. The House-passed bill was a very good foundation to get us 
to this end product.
  Working with our colleagues in the other body, we were able to craft 
a bipartisan consensus conference report that will stand the test of 
time.
  Mr. Speaker, this conference report is founded on a simple premise. 
Any requirement in law that a contract be signed or that a document be 
in writing can be met by an electronically signed contract or an 
electronic document. We are simply giving the electronic medium the 
same legal effect and enforceability as the medium of paper.
  This conference report will allow consumers to engage in a whole host 
of activities on the Internet that today are not possible. For example, 
today a consumer can apply for a mortgage or get a quote on a life 
insurance policy; but when it comes time to close the deal, a consumer 
must physically sign the contract.
  E-Sign will allow the entire transaction to be done electronically, 
and the transaction will have the same legal effect and enforceability 
as a paper contract.
  Equally important, the conference report extends the same principle 
to electronic records.
  Mr. Speaker, I do want to take a moment to discuss the important 
consumer provisions in this bill which were the subject of much 
discussion throughout the negotiating process. First, under E-Sign, 
engaging in electronic transactions is purely voluntary.
  No one will be forced into using or accepting an electronic signature 
or record. Consumers that do not want to participate in electronic 
commerce will not be forced or duped into doing so.
  Second, all existing Federal and State consumer protection laws 
remain in place.
  Third, we have included a strong consumer consent provision whereby 
consumers are provided clear disclosure of terms before they consent to 
any agreement. We also have included an important provision to ensure 
that consumers will be able to access any electronic record that is 
sent to them.
  Mr. Speaker, E-Sign is about the future. It is about laying the legal 
foundation of electronic commerce for many years to come. It is about 
promoting the development of new technologies that will enable 
consumers and businesses to have a greater certainty and security in 
their transactions. It is also about developing new products and new 
services that few of us can even imagine today. E-Sign is the most 
important high technology vote that this Congress will undertake. If 
one supports the U.S. high-tech industry, they will vote yes on this 
bill, which has unanimous support among the high-tech community. A vote 
in support of S. 761 is a vote in support of providing consumers with 
great confidence and certainty in on-line transactions. It is a vote in 
support of allowing businesses to provide new and innovative services 
on-line.
  I urge my colleagues to support the conference report on E-Sign.
  Before I conclude, I would like to extend my appreciation to all of 
the members of the conference committee for their work and 
thoughtfulness. I extend my thanks to my friend, the gentleman from 
Michigan (Mr. Dingell), the ranking member of the Committee on 
Commerce, for his assistance. In addition, I thank the fine help of the 
other House conferees, the gentleman from Louisiana (Mr. Tauzin), the 
gentleman from Ohio (Mr. Oxley), and the gentleman from Massachusetts 
(Mr. Markey). Each has made a valuable addition to the process.

[[Page H4352]]

  Further, I want to thank the members of the other body for their 
contributions. Republican and Democrat Senators from the commerce, 
banking and judiciary committees were critical to reaching final 
support for the conference report. This is truly a remarkable day, and 
I thank the participants for helping to bring this overwhelming victory 
to the American people.
  The following statement is intended to serve as a guide to the 
provisions of the conference report accompanying S. 761, the Electronic 
Signatures in Global and National Commerce Act. The differences between 
the Senate bill, House amendment, and substitute agreed to in 
conference are noted below, except for clerical corrections, conforming 
changes made necessary by agreements reached by the managers, and minor 
drafting and clerical changes.

                              Short Title

     Senate bill
       Section 1 establishes the short title of the bill as the 
     ``Millennium Digital Commerce Act.''
     House amendment
       Section 1 establishes the short title of the bill as the 
     ``Electronic Signature in Global and National Commerce Act''.
     Conference substitute
       The conference report adopts the House provision.

             Electronic Records and Signatures in Commerce


                        General Rule of Validity

     Senate bill
       Section 5(a) of the Senate bill sets forth the general 
     rules that apply to electronic commercial transactions 
     affecting interstate commerce. This section provides that in 
     any commercial transaction affecting interstate commerce a 
     contract may not be denied legal effect or enforceability 
     solely because an electronic record was used in its 
     formation.
       Section 5(b) authorizes parties to a contract to adopt or 
     otherwise agree on the terms and conditions on which they 
     will use and accept electronic signatures and electronic 
     records in commercial transactions affecting interstate 
     commerce.
     House amendment
       Section 101(a) of the House amendment establishes a general 
     rule that, with respect to any contract or agreement 
     affecting interstate commerce, notwithstanding any statute, 
     regulation or other rule of law, the legal effect, validity, 
     and enforceability of such contract or agreement shall not be 
     denied on the ground that: (1) the contract or agreement is 
     not in writing if the contract or agreement is an electronic 
     record; and (2) the contract or agreement is not signed or 
     affirmed by written signature if the contract or agreement is 
     signed or affirmed by an electronic signature.
       Section 101(b) provides that with respect to contracts or 
     agreements affecting interstate commerce, the parties to such 
     contracts or agreements may establish procedures or 
     requirements regarding the use and acceptance of electronic 
     records and electronic signatures acceptable to such parties. 
     Further, the legal effect, validity, or enforceability for 
     such contracts or agreements shall not be denied because of 
     the type or method of electronic record or electronic 
     signature selected by the parties.
       Nothing in section 101(b) requires a party to enter into 
     any contract or agreement utilizing electronic signatures or 
     electronic records. Rather, it gives the parties the option 
     to enter freely into online contracts and agreements.
     Conference Substitute
       The conference report adopts a substitute provision that 
     follows the House amendment.
       The general rule provides that notwithstanding any statute, 
     regulation, or other rule of law (other than titles one and 
     two) 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.
       The conference report makes clear that title I of the 
     conference substitute does not (1) limit, alter, or otherwise 
     affect any requirements 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 
     requirements that contracts or other records be written, 
     signed, or in non-electronic form; or (2) require any person, 
     with respect to a record other than a contract, to agree to 
     use or accept electronic records or electronic signatures.
       The conference report includes an opt-in provision allowing 
     consumers to consent to receive electronic records as 
     described below. If a statute, regulation, or other rule of 
     law requires that a record relating to a transaction in or 
     affecting interstate or foreign commerce be provided or made 
     available to a consumer in writing, an electronic record may 
     be substituted if (1) the consumer affirmatively consents to 
     receive an electronic record and has not withdrawn such 
     consent, (2) the consumer, prior to consenting, is provided 
     with a clear and conspicuous statement informing the consumer 
     of rights or options to have the record provided or made 
     available on paper, and the right of the consumer to withdraw 
     the consent to electronic records and of any conditions, 
     consequences (which may include termination of the parties' 
     relationships), or fees in the event of withdrawal of 
     consent. Further, the consumer is informed of whether the 
     consent applies only to the initial transaction or to 
     identified categories of records that follow the initial 
     transaction. Disclosure must also be made describing the 
     procedures the consumer must use to withdraw consent and to 
     update information needed to contact the consumer 
     electronically. The consumer must also be informed of how 
     after the consent, the consumer may, upon request, obtain a 
     paper copy of electronic records, and whether any fee will be 
     charged for such copy.
       Pursuant to subsection (c)(1)(C)(i), the consumer must be 
     provided, prior to consenting, with a clear and conspicuous 
     statement describing the hardware and software requirements 
     to access and retain electronic records.
       Subsection (c)(1)(C)(ii) requires that the consumer's 
     consent be electronic or that it be confirmed electronically, 
     in a manner that reasonably demonstrates that the consumer 
     will be able to access the various forms of electronic 
     records to which the consent applies. The requirement of a 
     reasonable demonstration is not intended to be burdensome on 
     consumers or the person providing the electronic record, and 
     could be accomplished in many ways. For example, the 
     ``reasonable demonstration'' requirement is satisfied if the 
     provider of the electronic records sent the consumer an e-
     mail with attachments in the formats to be used in providing 
     the records, asked the consumer to open the attachments in 
     order to confirm that he could access the documents, and 
     requested the consumer to indicate in an e-mailed response to 
     the provider of the electronic records that he or she can 
     access information in the attachments. Similarly, the 
     ``reasonable demonstration'' requirement is satisfied if it 
     is shown that in response to such an e-mail the consumer 
     actually accesses records in the relevant electronic format. 
     The purpose of the reasonable demonstration provision is to 
     provide consumers with a simple and efficient mechanism to 
     substantiate their ability to access the electronic 
     information that will be provided to them.
       Subsection (c)(1)(D) requires that after the consent of a 
     consumer 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 must 
     provide the consumer with a statement of the revised hardware 
     and software requirements for access to and retention of the 
     electronic records, and 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. Further, the provider must, pursuant to 
     subparagraph (C)(ii) perform the consumer access test again.
       Subsection (c)(2) includes a savings clause making clear 
     that 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. Further, subsection (c)(2) provides 
     that 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).
       Section 101(c)(3) makes clear that an electronic contract 
     or electronic signature cannot be deemed ineffective, 
     invalid, or unenforceable merely because the party 
     contracting with a consumer failed to meet the requirements 
     of the consent to electronic records provision. Compliance 
     with the consent provisions of section 101(c) is intended to 
     address the effectiveness of the provision of information 
     in electronic form, not the validity or enforceability of 
     the underlying contractual relationship or agreement 
     between the parties. In other words, a technical violation 
     of the consent provisions cannot in and of itself 
     invalidate an electronic contract or prevent if from being 
     legally enforced. Rather, the validity and enforceability 
     of the electronic contract is evaluated under existing 
     substantive contract law, that is, by determining whether 
     the violation of the consent provisions resulted in a 
     consumer failing to receive information necessary to the 
     enforcement of the contract or some provision thereof. For 
     example, if it turns out that the manner in which a 
     consumer consented did not ``reasonably demonstrate'' that 
     she could access the electronic form of the information at 
     a later date, but at the time of executing the contract 
     she was able to view its terms and conditions before 
     signing, the contract could still be valid and enforceable 
     despite the technical violation of the electronic consent 
     provision.
       Subsection (c)(4) provides that withdrawal of consent by a 
     consumer shall not affect the

[[Page H4353]]

     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.
       Subsection (c)(5) makes clear that this subsection does not 
     apply to any records that are provided or made 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.
       Subsection (c)(6) provides 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.
       Section 101(d) addresses statutory and regulatory record 
     retention requirements. It states that when a statute, 
     regulation, or other rule of law requires that a record, 
     including a contract, be retained that requirement is 
     satisfied by the retention of an electronic record, if two 
     criteria are met. First, the electronic record must 
     accurately reflect the information set forth in the contract 
     or record required to be retained. Second, that electronic 
     record must remain accessible to all parties who by law are 
     entitled to access the record for the period set out in that 
     law. Moreover, the electronic record must be in a form 
     capable of accurate reproduction for later reference. The 
     reproduction may be by way of transmission, printing or any 
     other method of reproducing records.
       Section 101(e) addresses statutory and regulatory 
     requirements that certain records, including contracts, be in 
     writing. The statute of frauds writing requirement 
     exemplifies one such legal requirement. The section states 
     that an electronic record or contract may be denied legal 
     effect and enforceability under section 101(a) of this Act, 
     if such an electronic record is not in a form that is capable 
     of being retained and accurately reproduced for later 
     reference by all parties entitled to retain that contract or 
     record. This provision is intended to reach two qualities of 
     ``a writing'' in the non-electronic world. The first such 
     quality of ``a writing'' is that it can be retained, e.g., a 
     contract can be filed. The second such quality of ``a 
     writing'' is that it can be reproduced, e.g., a contract can 
     be copied.
       Subsection (f) clarifies that nothing in title I affects 
     the proximity requirement of 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.
       Subsection (g) provides that if a statute, regulation, or 
     other rule of law requires a signature or record 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. This 
     subsection permits notaries public and other authorized 
     officers to perform their functions electronically, provided 
     that all other requirements of applicable law are satisfied. 
     This subsection removes any requirement of a stamp, seal, or 
     similar embossing device as it may apply to the performance 
     of these functions by electronic means.
       Subsection (h) provides legal effect, validity and 
     enforceability to contracts and record relating to a 
     transaction in or affecting interstate or foreign commerce 
     that were formed, created or delivered by one or more 
     electronic agents.
       Subsection (i) makes clear that the provisions of title I 
     and II cover the business of insurance.
       Subsection (j) provides protection from liability for 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 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.


              authority to alter or supersede general rule

     Senate bill
       Section 5(g) of the Senate bill provides that section 5 
     does not apply to any State in which the Uniform Electronic 
     Transaction Act is in effect.
     House amendment
       Section 102(a) of the House amendment provides that a State 
     statute, regulation or other rule of law enacted or adopted 
     after the date of enactment of H.R. 1714 may modify, limit, 
     or supersede the provisions of section 101 (except as 
     provided in section 102(b)) if that State action: (1) is an 
     adoption or enactment of the UETA as reported by the NCCUSL 
     or specifies alternative procedures or requirements 
     recognizing the legal effect, validity and enforceability of 
     electronic signatures; and (2) for statutes enacted or 
     adopted after the date of enactment of this Act, makes 
     specific reference to the provisions of section 101.
       Section 102(b) provides that no State statute, regulation, 
     or rule of law (including those pertaining to insurance), 
     regardless of date of enactment, that modifies, limits, or 
     supersedes section 101 shall be effective to the extent that 
     such statute, regulation, or rule of law: (1) discriminates 
     in favor of or against a specific technology, method, or 
     technique; (2) discriminates in favor of or against a 
     specific type or size of entity engaged in the business of 
     facilitating the use of electronic signatures and electronic 
     records; (3) is based on procedures or requirements that are 
     not specific and that are not publicly available; and (4) is 
     otherwise inconsistent with the provisions of section 101.
       Section 103(c) provides that a State may, by statute, 
     regulation or rule of law enacted or adopted after the date 
     of enactment of this Act, require specific notices to be 
     provided or made available in writing if such notices are 
     necessary for the protection of the public health or safety 
     of consumers. A consumer may not, pursuant to section 
     101(b)(2) consent to the provision or availability of such 
     notice solely as an electronic record.
     Conference substitute
       The conference report adopts a substitute provision. 
     Section 102 of the conference report provides a conditioned 
     process for States to enact their own statutes, regulations 
     or other rules of law dealing with the use and acceptance of 
     electronic signatures and records and thus opt-out of the 
     federal regime. The preemptive effects of this Act apply to 
     both existing and future statutes, regulations, or other 
     rules of law enacted or adopted by a State. Thus, a State 
     could not argue that section 101 does not preempt its 
     statutes, regulations, or other rules of law because they 
     were enacted or adopted prior to the enactment of this Act.
       Section 102(a) provides that a State statute, regulation or 
     other rule of law may modify, limit, or supersede the 
     provisions of section 101 only if that State action: (1) 
     constitutes an adoption or enactment of the Uniform 
     Electronic Transactions Act (UETA) as reported and 
     recommended for enactment by the National Conference of 
     Commissioners on Uniform State Laws (NCCUSL) in 1999; or (2) 
     specifies alternative procedures or requirements (or both) 
     for the use or acceptance of electronic signatures or 
     electronic records for establishing the legal effect, 
     validity and enforceability of contracts or records.
       It is intended that any State that enacts or adopts UETA in 
     its State to remove itself from Federal preemption pursuant 
     to subsection (a)(1) shall be required to enact or adopt UETA 
     without amendment. Any variation or derivation from the exact 
     UETA document reported and recommended for enactment by 
     NCCUSL shall not qualify under subsection (a)(1). Instead, 
     such efforts and any other effort may or may not be eligible 
     under subsection (a)(2). Thus, a State that enacted a 
     modified version of UETA would not be preempted to the extent 
     that the enactment or adoption by a State met the conditions 
     imposed in subsection (a)(2).
       Subsection (a)(1) places a significant limitation on a 
     State that attempts to avoid Federal preemption by enacting 
     or adopting a clean UETA. Section 3(b)(4) of UETA, as 
     reported and recommended for enactment by NCCUSL, allows a 
     State to exclude the application of that State's enactment or 
     adoption of UETA for any ``other laws, if any, identified by 
     State.'' This provision provides a potential enormous 
     loophole for a State to prevent the use or acceptance of 
     electronic signatures or electronic records in that State. 
     To remedy this, subsection (a)(1) requires that any 
     exception utilized by a State under section 3(b)(4) of 
     UETA shall be preempted if it is inconsistent with title I 
     or II, or would not be preempted under subsection 
     (a)(2)(ii) (technology neutrality).
       As stated above, subsection (a)(2) is designed to cover any 
     attempt except a strict enactment or adoption of UETA (which 
     would be covered by subsection (a)(1)), by a State to escape 
     Federal preemption by enacting or adopting specific 
     alternative procedures or requirements for the use or 
     acceptance of electronic signatures or records. This includes 
     any regulations or State action taken to implement a clean 
     enactment or adoption of UETA. Thus, a regulation or other 
     rule of law issued to implement a State's enactment or 
     adoption of a clean UETA would fall under and be tested 
     against the standards contained in subsection (a)(2) if it 
     strays in any manner from the strict, specific text of UETA, 
     as reported and recommended for enactment by NCCUSL.
       Further, some States are enacting or adopting a strict, 
     unamended version of UETA as well as enacting or adopting a 
     companion or separate law that contains further provisions 
     relating to the use or acceptance of electronic signatures or 
     electronic records. Under this Act, such action by the State 
     would prompt both subsection (a)(1) (for the strict enactment 
     or adoption of UETA) and subsection (a)(2) (for the other 
     companion or separate legislation). Subsection (a)(2) would 
     also apply for any amendments made by a state in the future 
     to their statutes, regulations or rules of law pertaining to 
     the original enactment or adoption of UETA that qualified 
     under subsection (a)(1).
       Subsection (a)(2) contains two important conditions that 
     limit the extent to which a state could utilize it to opt-out 
     of the federal regime. Specifically, such alternative 
     procedures or requirements: (1) must be consistent with this 
     title and title II; and (2) do not require, or accord greater 
     legal status or effect

[[Page H4354]]

     to, the implementation or application of a specific 
     technology or technological specification for performing the 
     functions of creating, storing, generating, receiving, 
     communicating, or authenticating electronic signatures or 
     records. It is not intended that the singular use of 
     technology or technological specification in subsection 
     (a)(2)(A)(ii) allows a State to set more than one 
     technologies at the expense of other technologies in order to 
     meet this standard. Instead, this limitation is intended to 
     prevent States from setting any specific technology or 
     technological specification, unless otherwise specifically 
     permitted. Further, inclusion of the ``or accord greater 
     legal status or effect to'' is intended to prevent a state 
     from giving a leg-up or impose an additional burden on one 
     technology or technical specification that is not applicable 
     to all others.
       In addition, subsection (a)(2)(B) requires that a State 
     that utilizes subsection (a)(2) to escape federal preemption 
     must make a specific reference to this Act in any statute, 
     regulation, or other rule of law enacted or adopted after the 
     date of enactment of this Act. This provision is intended, in 
     part, to make it easier to track action by the various States 
     under this subsection for purposes of research.
       Section 102(b) provides a specific exclusion to the 
     technology neutrality provisions contained in subsection 
     (a)(2)(A)(ii) for procurement by a state, or any agency or 
     instrumentality thereof.
       Section 102(c) makes clear that subsection (a) cannot be 
     used by a State to circumvent this title or title II through 
     the imposition of nonelectronic delivery methods under 
     section 8(b)(2) of UETA. Any attempt by a State to use 
     8(b)(2) to violate the spirit of this Act should be treated 
     as effort to circumvent and thus be void.


                          specific exclusions

     Senate bill
       Section 5(d) of the Senate bill excludes from the 
     application of this section any statute, regulation or other 
     rule of law governing: (1) the Uniform Commercial Code as in 
     effect in any state, other than sections 1-107 and 1-206 and 
     Articles 2 and 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 time that a State or subdivision 
     thereof chooses to accept filings electronically; (4) 
     residential landlord-tenant relationships; and (5) the 
     Uniform Health-Care Decisions Act as in effect in a State.
     House amendment
       Section 103(a) of the House amendment excludes from the 
     application of section 101 any contract, agreement or record 
     to the extent that it is covered by: (1) a statute, 
     regulation or rule of law governing the creation and 
     execution of wills, codicils, or testamentary trusts; (2) a 
     statute, regulation or other rule of law governing adoption, 
     divorce, or other matters of family law; (3) the Uniform 
     Commercial Code as in effect in any state, other than 
     sections 1-107 and -206 and Articles 2 and 2A; (4) any 
     requirement by a Federal regulatory agency or self-
     regulatory agency that records be filed or maintained in a 
     specified standard or standards (except that nothing 
     relieves any Federal regulatory agency of its obligation 
     under the Government Paperwork Elimination Act, title XVII 
     of Public Law 105-277); (5) the Uniform Anatomical Gift 
     Act; or (6) the Uniform Health-Care Decisions Act.
       Section 103(b) excludes from the application of section 
     101: (1) any contract, agreement or record between a party 
     and a State agency if the State agency is not acting as a 
     market participant in or affecting interstate commerce; (2) 
     court orders or notices or official court documents 
     (including briefs, pleading and other writings) required to 
     be executed in connection with court proceedings; or (3) any 
     notice concerning: (A) the cancellation or termination of 
     utility services, (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 or the cancellation or termination 
     of health insurance or benefits or life insurance benefits 
     (excluding annuities).
     Conference substitute
       The conference report adopts a substitute provision that 
     follows the House amendment.
       Section 103(a) excludes from the application of section 101 
     any contract, agreement or record to the extent that it is 
     covered by: (1) a statute, regulation or rule of law 
     governing the creation and execution of wills, codicils, or 
     testamentary trusts; (2) a statute, regulation or other rule 
     of law governing adoption, divorce, or other matters of 
     family law; (3) the Uniform Commercial Code as in effect in 
     any state, other than sections 1-107 and 1-206 and Articles 2 
     and 2A.
       Section 103(b) excludes from the application of section 
     101: (1) court orders or notices or official court documents 
     (including briefs, pleading and other writings) required to 
     be executed in connection with court proceedings; or (2) any 
     notice of: (A) the cancellation or termination of utility 
     services, (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 or the cancellation or termination 
     of health insurance or benefits or life insurance benefits 
     (excluding annuities).
       The exclusion pertaining to utility services applies to 
     essential consumer services including water, heat and power. 
     This provision does not apply to notices for other broadly 
     used important consumer services, such as telephone, cable 
     television, and Internet access services, etc. Electronic 
     cancellation or termination notices may be used in 
     association with those other services, assuming all of the 
     other elements of Section 101 are met.
       Section 103(c)(1) directs the Secretary of Commerce, acting 
     through the Assistant Secretary for Communication and 
     Information, to review the operation of the exclusions in 
     subsections (a) and (b) over a period of three years to 
     determine if such exclusions are necessary for the protection 
     of consumers. The Assistant Secretary shall submit the 
     findings of this review to Congress within three years of the 
     date of enactment of this Act.
       Section 103(c)(2) provides that a Federal regulatory 
     agency, with respect to matter within its jurisdiction, may 
     extend, after proper notice and comment and publishing a 
     finding that one or more of exceptions in subsections (a) or 
     (b) are not longer necessary for the protection of consumers 
     and eliminating such exceptions will not increase the 
     material risk of harm to consumers, the application of 
     section 101 to such exceptions.


             applicability to federal and state governments

     Senate bill
       The Senate bill contained no provision affecting the 
     authority of Federal regulatory agencies.
     House amendment
       The House amendment provided in Section 103 that the 
     authority of Federal regulatory agencies would be preserved 
     over records filed or maintained in a specific standard or 
     standards.
     Conference substitute
       The conference report adopts a substitute provision that 
     follows the House amendment.
       Section 104(a) provides that subject to section 104(a)(2), 
     a Federal regulatory agency, a self-regulatory organization, 
     or State regulatory agency may specify standards or formats 
     for the filing of records with that agency or organization, 
     including requiring paper filings or records. While the 
     conference report preserves such authority to such agencies 
     or organizations, it is intended that use of such authority 
     is rarely exercised. Section 104(b)(1) provides that subject 
     to section 104(b)(2) and section 104(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 (1) the issuance of 
     regulations pursuant to a statute; or (2) 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). However, this 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 issuance of orders or 
     guidance.
       Section 104(b)(2) provides for limitations on the 
     interpretational authority of agencies. Specifically, a 
     Federal regulatory agency shall not adopt any regulation, 
     order, or guidance described in section 104(b)(1), and a 
     State regulatory agency is preempted by section 101 from 
     adopting any regulation, order, or guidance described above 
     unless: (1)--(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 (II) 
     will not impose unreasonable costs on the acceptance and use 
     of electronic records; and (iii) the methods selected to 
     carry out that purpose doe not require the implementation or 
     application of a specific technology or technological 
     specification for performing the functions of creating, 
     storing, generating, receiving, communicating, or 
     authenticating electronic records or electronic signatures.
       The conference report provides for more limited Federal and 
     State interpretative authority over other functions related 
     to records. This Act grants no additional or new rulemaking 
     authority to any Federal or State agency. The conference 
     report provides that if Federal or State regulators possessed 
     specific rulemaking authority under their organic statutes, 
     they could use that rulemaking authority to interpret section 
     101 subject to strict conditions. Those conditions include 
     determinations that such regulation, order or guidance: (1) 
     is consistent with section 101; and (2) does not add to the 
     requirements of the section. Additionally, the conference 
     report requires that any Federal agency show conclusively 
     that: (a) there is a substantial justification for the 
     regulation and the regulation is necessary to protect an 
     important public interest; (b) the methods used to carry out 
     that purpose are the least restrictive alternative consistent

[[Page H4355]]

     with that purpose; (c) the methods are substantially 
     equivalent to the requirements imposed or records that are 
     not electronic records; and (d) such methods will not impose 
     new costs on the acceptance and use of electronic records. 
     The conference report requires strict technological 
     neutrality of any Federal or State regulation, order or 
     guidance. Absent such technological neutrality, any such 
     regulation, order or guidance is void.
       The conference report is designed to prevent Federal and 
     State Regulators from undermining the broad purpose of this 
     Act, to facilitate electronic commerce and electronic record 
     keeping. To ensure that the purposes of this Act are upheld, 
     Federal and State regulatory authority is strictly 
     circumscribed. It is expected that Courts reviewing 
     administrative actions will be rigorous in seeing that the 
     purpose of this Act, to ensure the widest use and 
     dissemination of electronic commerce and records are not 
     undermined.
       Subsection (b)(3)(A) provides authority to a Federal or 
     State regulatory agency to interpret section 101(d) in a 
     manner to specify specific performance standards to assure 
     accuracy, record integrity, and accessibility of records that 
     are required to be retained. Subsection (b)(3) extends this 
     authority to override the technology neutrality provision 
     contained in subsection (b)(2)C)(iii) but only if doing so 
     (1) serves an important governmental objective; and (2) is 
     substantially related to the achievement of that objective. 
     Further, subsection (b)(3)(A) does not allow a Federal or 
     State regulatory agency to require the use of a particular 
     type of software or hardware in order to comply with 101(d).
       Subsection (b)(3)(B) provides authority to a Federal or 
     State regulatory agency to interpret section 101(d) to 
     require retention of paper records but only if (1) there is a 
     compelling government interest relating to law enforcement or 
     national security for imposing such requirement, and (2) 
     imposing such requirement is essential to attaining such 
     interest. It is important to note that the test in 
     subsection (b)(3)(B) is higher and more stringent than in 
     subsection (b)(3)(A). This is intentional as it is an 
     effort to impose an extremely high barrier before a 
     Federal or State regulatory agency will revert back to 
     requiring paper records. However, this does not diminish 
     the test contained subsection (b)(3)(A). It, too, is 
     intended to be an extremely high barrier for a Federal or 
     State regulatory agency to meet before the technology 
     neutrality provision is violated. It is intended that use 
     of either of these tests will be necessary in only a very, 
     very few instances. It is expected that Federal and State 
     agencies take all action and exhaust all other avenues 
     before exercising authority granted in paragraph (3).
       Subsection (b)(4) exempts procurement by a Federal or State 
     government, or any agency or instrumentality thereof from the 
     technology neutral requirements of subsection (b)(2)(C)(iii).
       Subsection (c)(1) makes clear that nothing in subsection 
     (b), except subsection (b)(3)(B), allows a Federal or State 
     regulatory agency to impose or reimpose any requirement that 
     a record be in paper form.
       Subsection (c)(2) makes clear that nothing in subsection 
     (a) or (b) relieves any Federal regulatory agency of its 
     obligations under the Government Paperwork Elimination Act.
       Subsection (d)(1) provides authority to a Federal or State 
     regulatory agency to exempt without condition a specified 
     category or type of record from the consent provisions 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. It is 
     intended that the test under subsection (d)(1) not be read 
     too limiting. There are vast numbers of instances when 
     section 101(c) may not be appropriate or necessary and should 
     be exempted by the appropriate regulator.
       Subsection (d)(2) requires the Securities and Exchange 
     Commission, within 30 days after date of enactment, to issue 
     a regulation or order pursuant to subsection (d)(1) exempting 
     from the consent provision 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.
       Section 104(e) provides that 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 records or electronic signature was used in its 
     formation or authorization.
       The Federal Communications Commission (FCC) has been very 
     slow, even reticent, to clearly authorize the use of an 
     Internet letter of agency for a consumer to conduct a 
     preferred carrier change. As a result of the Commission's 
     repeated failure to act on this matter, the conference report 
     provides specific direction to the Commission to recognize 
     Internet letters of agency for a preferred carrier change.


                                studies

     Senate bill
       Section 7 of the Senate bill directs the Department of 
     Commerce and Office of Management and Budget (OMB) to report 
     to Congress within 18 months on Federal laws and regulations 
     that might pose barriers to electronic commerce, including 
     suggestions for reform.
     House amendment
       Section 104 of the House amendment directs the Secretary of 
     Commerce (the Secretary), acting through the Assistant 
     Secretary for Communications and Information, to conduct an 
     inquiry regarding any State statute, regulation, or rule of 
     law enacted or adopted after enactment on the extent to which 
     such statute, regulation, or rule of law complies with 
     section 102(b). Section 104(b) requires the Secretary to 
     submit the report described in paragraph(a) at the conclusion 
     of the five year period.
       Section 104(c) requires the Secretary, within eighteen 
     months after the date of enactment, to conduct an inquiry 
     regarding the effectiveness of the delivery of electronic 
     records to consumers using electronic mail as compared with 
     the delivery of written records by the United States Postal 
     Service and private express mail services. The Secretary 
     shall submit a report to Congress regarding the results of 
     such inquiry at the conclusion of the eighteen month period.
     Conference substitute
       The Senate recedes to the House with an amendment. 
     Specifically, the conference report retains subsection 104(c) 
     of the House amendment and redesignates it as section 104(a) 
     of the conference report. Further, the conference report 
     includes a new subsection (b) that requires the Secretary of 
     Commerce and the Federal Trade Commission, within one year 
     after date of enactment, to submit a report to the Congress 
     analyzing: (1) the benefits provided to consumers by the 
     consumer access test of the consent provision (section 
     101(c)(1)(C)(ii)); (2) any burdens imposed on electronic 
     commerce by the provision, whether the benefits outweigh the 
     burdens; (3) whether the absence of such procedure would 
     increase consumer fraud; and (4) any suggestions for revising 
     the provision. In conducting the evaluation, the Secretary of 
     Commerce and FTC shall solicit the comments of the public, 
     consumer representatives, and electronic commerce businesses.


                              definitions

     Senate bill
       Section 4 sets forth the definitions of terms used in the 
     bill: ``electronic;'' ``electronic agent;'' ``electronic 
     record;'' ``electronic signature;'' ``governmental agency;'' 
     ``record;'' ``transaction;'' and ``Uniform Electronic 
     Transaction Act.''
     House amendment
       Section 104 of the House amendment defines the following 
     terms: ``electronic record;'' ``electronic signature;'' 
     ``electronic;'' ``electronic agent;'' ``record;'' ``Federal 
     regulatory agency;'' and ``self-regulatory agency.''
     Conference substitute
       The conference report adopts a substitute provision 
     adopting definitions for the following terms: ``consumer;'' 
     ``electronic;'' ``electronic agent;'' ``electronic record;'' 
     ``electronic signature;'' ``Federal regulatory agency;'' 
     ``information;'' ``person;'' ``record;'' and ``transaction.''


                            effective dates

     Senate bill
       The Senate bill contained no provision.
     House amendment
       The House amendment contained no provision.
     Conference substitute
       The conference report creates a general delayed effective 
     date for the bill, and creates specific delayed effective 
     dates for certain provisions of the bill. Subsection (a) 
     establishes that, except as provided in subsections (b), the 
     provisions of the bill are effective October 1, 2000. 
     Subsection (b) delays the effective date of the records 
     retention provision until March 1, 2001 unless an agency has 
     initiated, announced, proposed but not completed an action 
     under subsection 104(b)(3), in which case it would be 
     extended until June 1, 2001. Subsection (b)(2) delays the 
     effective date of this Act by one year with regards to any 
     transaction involving a loan guarantee or loan guarantee 
     commitment made by the United States Government. The one year 
     delay was granted to permit the federal government time to 
     institute safeguards necessary to protect taxpayers from risk 
     of default on loans guaranteed by the federal government.
       Subsection (d) delays the effective date of section 101(c) 
     for any records provided or made available to a consumer 
     pursuant to title IV of the High Education Act of 1965 until 
     the Secretary of Education publishes revised promissory notes 
     under section 432(m) of such Act or one year after the date 
     of enactment, whichever is earlier.

                          Transferable Records


                          transferable records

     Senate bill
       The Senate bill contained no provision.
     House amendment
       The House amendment contained no provision.
     Conference substitute
       The conference report adopts a new provision in recognition 
     of the need to establish a uniform national standard for the 
     creation, recognition, and enforcement of electronic 
     negotiable instruments. The development of

[[Page H4356]]

     a fully-electronic system of negotiable instruments such as 
     promissory notes is one that will produce significant 
     reductions in transaction costs. This provision, which is 
     based in part on Section 16 of the Uniform Electronic 
     Transactions Act, sets forth a criteria-based approach to the 
     recognition of electronic negotiable instruments, referred to 
     as ``transferable records'' in this section and in UETA. It 
     is intended that this approach create a legal framework 
     within which companies can develop new technologies that 
     fulfill all of the essential requirements of negotiability in 
     an electronic environment, and in a manner that protects the 
     interests of consumers.
       The conference report notes that the official Comments to 
     section 16 of UETA, as adopted by the National Conference of 
     Commissioners on Uniform State Laws, provide a valuable 
     explanation of the origins and purposes of this section, as 
     well as the meaning of particular provisions.
       The conference report notes that, pursuant to sections 3(c) 
     and 7(d) of the UETA, an electronic signature satisfies any 
     signature requirement under Section 16 of the UETA. It is 
     intended that an electronic signature shall satisfy any 
     signature requirement under this provision, as well. The 
     conference report further notes that the reference in section 
     201(a)(1)(C) to loans``secured by real property'' includes 
     all forms of real property, including single-family and 
     multi-family housing.
     Development and Adoption of Electronic Signature Products


 Treatment of Electronic Signatures in Interstate and Foreign Commerce

     Senate bill
       Section 6 of the Senate bill sets out the principles that 
     the United States Government should follow, to the extent 
     practicable, in its international negotiations on electronic 
     commerce as a means to facilitate cross-border electronic 
     transactions.
       Paragraph (1) advocates the removal of paper-based 
     obstacles to electronic transactions. This can be 
     accomplished by taking into account the enabling provisions 
     of the Model Law on Electronic Commerce adopted by the United 
     Nations Committee on International Trade Law (UNCITRAL) in 
     1996. Paragraph (2) permits that parties to a transaction 
     shall have the opportunity to choose the technology of their 
     choice when entering into an electronic transaction. 
     Paragraph (3) permits parties to a transaction the 
     opportunity to prove in a court or other proceeding that 
     their authentication approach and transactions are valid. 
     Paragraph (4) adopts a nondiscriminatory approach to 
     electronic signatures.
     House amendment
       Section 201(a) of the House amendment directs the Secretary 
     of Commerce, acting through the Assistant Secretary for 
     Communications and Information, to conduct an annual inquiry 
     identifying: (1) any domestic or foreign impediments to 
     commerce in electronic signature products and services and 
     the manner and extent to which such impediments inhibit the 
     development of interstate and foreign commerce; (2) 
     constraints imposed by foreign nations or international 
     organizations that constitute barriers to providers of 
     electronic signature products and services; and (3) the 
     degree to which other nations and international organizations 
     are complying with the principles in section 201(b)(2).
       Under subsection (a)(2), the Secretary is required to 
     report to Congress the findings of each inquiry 90 days after 
     completion of such inquiry.
       Section 201(b) directs the Secretary of Commerce, acting 
     through the Assistant Secretary for Communications and 
     Information, to promote the acceptance and use of electronic 
     signatures on an international basis in accordance with 
     section 101 of the bill and with designated principles. In 
     addition, the Secretary of Commerce is directed to take all 
     actions to eliminate or reduce impediments to commerce in 
     electronic signatures, including those resulting from the 
     inquiries required pursuant to subsection (a).
       The designated principles are as follows: free-markets and 
     self-regulation, rather than government standard-setting or 
     rules, should govern the development and use of electronic 
     signatures and electronic records; neutrality and 
     nondiscrimination should be observed among providers of and 
     technologies for electronic records and 
     electronic signatures; parties to a transaction should be 
     allowed to establish requirements regarding the use of 
     electronic records and electronic signatures acceptable to 
     the parties; parties to a transaction should be permitted 
     to determine the appropriate authentication technologies 
     and implementation for their transactions with the 
     assurance that the technology and implementation will be 
     recognized and enforced; the parties should have the 
     opportunity to prove in court that their authentication 
     approaches and transactions are valid; electronic records 
     and signatures in a form acceptable to the parties should 
     not be denied legal effect, validity, or enforceability 
     because they are not in writing; de jure or de facto 
     imposition of electronic signature and electronic record 
     standards on the private sector through foreign adoption 
     of regulations or policies should be avoided; paper-based 
     obstacles to electronic transactions should be removed.
       Section 201(c) requires the Secretary of Commerce to 
     consult with users and providers of electronic signatures and 
     products and other interested parties in carrying out actions 
     under this section.
       Section 201(d) clarifies that nothing requires the 
     Secretary or Assistant Secretary to take any action that 
     would adversely affect the privacy of consumers.
       Section 201(e) provides that the definitions in section 104 
     apply to this title.
     Conference Substitute
       The conference report adopts a substitute provision. 
     Section 301(a)(1) directs the Secretary of Commerce to 
     promote the acceptance and use of electronic signatures on an 
     international basis in accordance with section 101 of the 
     bill and with the set principles listed in subsection (a)(2). 
     In addition, the Secretary of Commerce is directed to take 
     all actions to eliminate or reduce impediments to commerce in 
     electronic signatures.
       Section 301(a)(2) lists the principles as follows: (1) 
     Removal of paper-based obstacles to electronic transactions. 
     This can be accomplished by taking into account the enabling 
     provisions of the Model Law on Electronic Commerce adopted by 
     the United Nations Committee on International Trade Law 
     (UNCITRAL) in 1996; (2) Parties to a transaction shall have 
     the opportunity to choose the technology of their choice when 
     entering into an electronic transaction. Parties to a 
     commercial transaction should be able to chose the 
     appropriate authentication technologies and implementation 
     models for their transactions. Unnecessary regulation of 
     commercial transactions distorts the development and 
     efficient operation of markets, including electronic markets. 
     Moreover, the rapid development of the electronic marketplace 
     is resulting in new business models and technological 
     innovations. This is an evolving process. Therefore, 
     government attempts to regulate may impede the development of 
     newer alternative technologies; (3) Parties to a transaction 
     the opportunity to prove in a court or other proceeding that 
     their authentication approach and transactions are valid. 
     Parties should have the opportunity to prove in court that 
     the authentication methods that they select are valid and 
     reliable; and (4) Adoption of a nondiscriminatory approach to 
     electronic signatures and authentication methods from other 
     jurisdictions.
       Section 301(c) directs the Secretary to consult with users 
     and providers of electronic signature products and services 
     and other interested parties. Section 301(d) applies the 
     definitions of ``electronic signature'' and ``electronic 
     record'' in section 107 to this title.
       Increasingly, online transactions are not just interstate 
     but international in nature and this creates a clear need for 
     international recognition of electronic signatures and 
     records that will not create barriers to international trade. 
     Title III directs the Secretary of Commerce to take an active 
     role in bilateral and multilateral talks to promote the use 
     and acceptance of electronic signatures and electronic 
     records worldwide. It is intended that the Secretary promote 
     the principles contained in this Act internationally. 
     However, it is possible that some foreign nations may choose 
     to adopt their own approach to the use and acceptance of 
     electronic signatures and electronic records. In such cases, 
     the Secretary should encourage those nations to provide legal 
     recognition to contracts and transactions that may fall 
     outside of the scope of the national law and encourage those 
     nations to recognize the rights of parties to establish their 
     own terms and conditions for the use and acceptance of 
     electronic signatures and electronic records.
       There is particular concern about international 
     developments that seek to favor specific technologies of 
     processes for generating electronic signatures and electronic 
     records. Failure to recognize multiple technologies may 
     create potential barriers to trade and stunt the development 
     of new and innovative technologies.
       Unfortunately, international developments on recognizing 
     electronic signatures are troubling. The German Digital 
     Signature Law of July 1997 runs counter to many of the widely 
     accepted principles of electronic signature law in the United 
     States. For example, the German law provides legal 
     recognition only to signatures generated using digital 
     signature technology, establishes licensing for 
     certificate authorities, and sets a substantial role for 
     the government in establishing technical standards. 
     Further, a position paper on international recognition of 
     electronic signatures released by the German government 
     (International Legal Recognition of Digital Signatures, 
     August 28, 1998) seeks to apply these principles 
     internationally. This policy statement reemphasizes the 
     principle that uniform security standards are necessary 
     for all uses of digital signatures regardless of their 
     use, supports mutual recognition of digital signatures 
     only to those nations which have a similar regulatory 
     structure for certification authority, and fails to 
     provide legal effect to electronic signatures generated by 
     other technologies.
       The European Community is considering a framework for the 
     use and acceptance of electronic signatures for its member 
     countries. ``Directive 1999/93/EC of the European Parliament 
     and of the Council of 13 December 1999 on a Community 
     Framework for electronic signatures'' lays out the European 
     Community's approach to electronic signature legislation. Of 
     particular interest is Article 7, International Aspects, 
     which recognizes the legal validity of digital certificates 
     issued in a non-European Community country. While 
     international recognition of electronic signatures is 
     important, there is concern that this approach will not 
     recognize

[[Page H4357]]

     non-certificate based electronic signatures, such as those 
     based on biometric technologies. The conference report notes 
     that negotiations with the European Union on electronic 
     signatures is a top priority.

                 Commission on Child Online Protection


                       authority to accept gifts

     Senate bill
       The Senate bill contains no similar provision.
     House amendment
       The House amendment contains no similar provision.
     Conference substitute
       The conference report adopts a provision to amend section 
     1405 of the Child Online Protection Act by adding a new 
     subsection (h), which allows the Commission on Online Child 
     Protection to accept, use and dispose of gifts, bequests or 
     devises of services or property for the purpose of aiding or 
     facilitating the work of the Commission.

  Mr. Speaker, I reserve the balance of my time.
  Mr. DINGELL. Mr. Speaker, I yield myself 3 minutes.
  (Mr. DINGELL asked and was given permission to revise and extend his 
remarks.)
  Mr. DINGELL. Mr. Speaker, I rise in support of this conference report 
and urge its adoption by the House.
  I want to begin by paying tribute to my good friend, the chairman of 
the committee, the gentleman from Virginia (Mr. Bliley), for his 
leadership in this matter.
  Pieces of legislation which would not have met the test of the public 
interest have been reformed in the conference, and his leadership has 
played a significant part in those events, for which I salute him and 
thank him.
  The conference report confers legal validity on electronic signatures 
and contracts involving transactions in interstate commerce and allows 
required consumer disclosures and other records to be transmitted and 
retained by businesses electronically rather than on paper.
  This is the most far-reaching e-commerce legislation to be considered 
by this Congress. No one could be more pleased nor indeed more 
surprised than I am at the successful outcome of this conference.
  As I mentioned, we started with a version that was anti-consumer and 
opposed by the Democratic conferees, by the administration, by all the 
States and by consumer groups. The Department of Justice and the State 
attorneys general submitted letters to the conference committee, 
pointing out how the draft would have undermined the government's 
ability to enforce civil and criminal laws against waste, fraud and 
abuse and would have destroyed many popular laws protecting consumers.
  What then happened? Under the leadership of our friend and colleague, 
the gentleman from Virginia (Mr. Bliley), chairman of the Committee on 
Commerce and the chairman of the conference, and Senator John McCain, 
chairman of the Committee on Commerce in the other body, a majority of 
the Republican conferees agreed to address these concerns. They 
recognized that this legislation must have adequate consumer 
protections or consumers would never have the necessary confidence to 
make e-commerce work.
  I also want to commend Senators Hollings, Sarbanes, Wyden, and Leahy 
for their outstanding work on these issues. Without their assistance, 
certainly this matter would have been concluded differently and 
probably unsuccessfully.
  These joint efforts led to the adoption of strong consumer consent 
provisions. These provisions require that consumers affirmatively 
consent to receive information in electronic form. Furthermore, these 
provisions require that the consumer actually demonstrate its ability 
to be open and to gain access to the information in the format that it 
will be transmitted. Other consumer protections contained in the 
conference report include requirements relating to integrity of records 
and security to guard against tampering. Federal regulatory agencies 
may grant exemptions from the consent requirements under certain 
limited circumstances. Businesses may be required to maintain paper 
copies of contracts or records, if there is a compelling law 
enforcement or national security interest.
  Moreover, many critical documents continue to be provided and 
retained on papers, such as wills, adoption, divorce matters, court 
orders, utility termination notices, foreclosure and eviction notices, 
insurance cancellation, product recalls, and warnings required to 
accompany transportation of hazardous materials.
  I am happy to report that all Democratic conferees and a majority of 
our Republican conferees have agreed to the conference report which we 
are considering today.
  The conference report is also supported by the administration, the 
States, and consumer groups.
  This bipartisan conference agreement is balanced, and it is fair to 
businesses, fair to consumers. It should become law.
  Let me discuss a few of the details of the agreement.
  I want to draw my colleagues attention to some important provisions 
to which the Conferees agreed during the conference.
  Scope of Requirement.--Section 101(a). In recommending that the House 
vote to pass this conference report, I would like to clarify for 
members the kind of transactions that are covered by the bill. You will 
note that the definition of ``transaction'' includes business, 
commercial, or consumer affairs. The Conferees specifically rejected 
including ``governmental'' transactions. Members should understand that 
this bill will not in any way affect most governmental transactions, 
such as law enforcement actions, court actions, issuance of Government 
grants, applications for or disbursement of Government benefits, or 
other activities that the Government conducts that private actors would 
not conduct. Even though some aspects of such governmental transactions 
(for example, the Government's issuance of a check reflecting a 
Government benefit) are commercial in nature, they are not covered by 
this bill because they are part of a uniquely governmental operation. 
Likewise, activities conducted by private parties principally for 
governmental purposes are not covered by this bill. Thus, for example, 
the act of collecting signatures to place a nomination on a ballot 
would not be covered, even though it might have some nexus with 
commerce (such as the signature collectors' contract of employment).
  General Rule of Validity.--Section 101(a)(1) and (2). The Conferees 
added the word ``solely'' in both sections 101(a)(1) and (2) to ensure 
that electronic contracts and signatures are not inadvertently 
immunized by this Act from challenge on grounds other than the absence 
of a physical writing or signature.
  Preservation of Rights and Obligations.--Section 101(b)(1). The 
Conferees added a new Section 101(b)(1) which provides that this Title 
I does not ``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.'' This savings clause makes clear 
that existing legal requirements that do not involve the writing, 
signature, or paper form of a contract or other record are not affected 
by Title I. Thus, for example, a transaction into which a consumer 
enters electronically is still subject to scrutiny under applicable 
State and Federal laws that prohibit unfair and deceptive acts and 
practices. So, if a consumer were deceived or unfairly convinced in 
some way to enter into the electronic transaction, State and Federal 
unfair and deceptive practices laws might still apply even though the 
consumer was properly notified of their rights under Section 101(c) and 
consent to the electronic notices and contracts was properly obtained. 
In other words, compliance with the Act's consumer consent requirements 
does not make it unnecessary for the transaction and parties to the 
transaction to comply with other applicable statutes, regulations or 
rules of law.
  Preservation of Rights and Obligations.--Section 101(b)(2). The Act 
specifically avoids forcing any contracting party--whether the 
Government or a private party--to use or accept electronic records and 
electronic signatures in their contracts. Thus, for example, where the 
Government makes a direct loan, the bill would not require the use or 
acceptance of electronic records or signatures in the loan transaction, 
because the Government would be a party to the loan contract. The 
Conferees recognized that, in some instances, parties to a contract 
might have valid reasons for choosing not to use electronic signatures 
and records, and it is best to allow contracting parties the freedom to 
make that decision for themselves.
  Protections Against Waste, Fraud and Abuse.--Sections 101(b)(2), 
102(b) and 104(b)(4). Members should note that several provisions of 
the conference report are designed to address concern about protecting 
taxpayers from waste, fraud and abuse in connection with government 
contracting or other instances in which the Government is a market 
participant. For example, Sections 101(b)(2) 102(b) and 104(b)(4) 
and others

[[Page H4358]]

give agencies significant latitude to accept, reject, or place 
conditions on the use of electronic signatures and records when the 
Government is acting like a market participant.

  Consent to Electronic Record.--Section 101(c)(1). The House bill 
included an amendment that required that consumers affirmatively 
consent before they can receive records (including required notices and 
disclosures and statements) electronically that are legally required to 
be provided or made available in writing. Among other changes to this 
section made in conference, the Conferees added an important new 
element: Section 101(c)(1)(C) of the conference report requires that 
the consumer ``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.'' 
The purpose of this provision is to ensure that, when consumers agree 
to receive notices electronically, they are able to make an informed 
decision and that they can actually open, read, and retain the records 
that they will be sent electronically.
  Today, many different technologies can be used to deliver 
information--each with its own hardware and software requirements. An 
individual may not know whether the hardware and software on his or her 
computer will allow a particular technology to operate. (All of us have 
had the experience of being unable to open an e-mail attachment.) Most 
individuals lack the technological sophistication to know the exact 
technical specifications of their computer equipment and software, 
especially if they are not at home when consent is sought. For these 
reasons, it is appropriate to require companies to establish an 
``electronic connection'' with their customers in order to provide 
assurance that the consumer will be able to access the information in 
the electronic form in which it will be sent. This one-time 
``electronic check'' can be as simple as an e-mail to the customer 
asking the customer to confirm that he was able to open the attachment 
(if the company plans to send notices to the customer via e-mail 
attachments) and a reply from the customer confirming that he or she 
was able to open the attachment. This responsibility is not unduly 
burdensome to e-commerce. As a matter of good customer relations, any 
legitimate company would want to confirm that it has a working 
communications link with its customers.
  Preservation of Consumer Protections.--Section 101(c)(2)(A). The 
Conferees preserved an important provision from the House bill which 
provides that: ``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.'' So, for example, if a statute requires that a disclosure be 
provided within 24 hours of a certain event and that the disclosure 
include specific language set forth clearly and conspicuously, that 
requirement could be met by an electronic disclosure provided within 24 
hours of that event, which disclosure included the specific language, 
set forth clearly and conspicuously. However, simply providing a notice 
electronically does not obviate the need to satisfy the underlying 
statute's requirements for timing and content.
  Retention of Contracts and Records.--Section 101(d)(1) and Section 
104(b)(3). The Conferees added provisions that state: ``if a statute, 
regulation, and other rule requires that a contract or other record 
relating to a transaction . . . be retained,'' the requirement is met 
by retaining an electronic record of the information that ``accurately 
reflects the information'' and ``remains accessible'' to all who are 
entitled to it ``in a form that is capable of being accurately 
reproduced for later reference. . . .'' Moreover, Federal or State 
regulatory agencies may interpret this requirement to specify 
performance standards to ``assure accuracy, record integrity, and 
accessibility of records that are required to be retained.'' Moreover, 
these performance standards can be specified in a manner that does not 
conform to the technology neutrality provisions, provided that the 
requirement serves, and is substantially related to the achievement of, 
an important governmental objective. These record retention provisions 
are essential to the capacity of federal and State regulatory and law 
enforcement agencies to ensure compliance with laws. For example, the 
only way in which a Government agency can determine if participants in 
large Government programs are complying with financial and other 
requirements of those programs may be to require that records be 
retained in a form that can be readily accessible to government 
auditors. Similarly, agencies must be able to require that companies 
implement anti-tampering protections to ensure that electronic records 
cannot be altered easily by money launderers or embezzlers or others 
seeking to hide their illegal activity. Without the ability of these 
agencies to ascertain program compliance through electronic record 
retention, taxpayers could be exposed to far greater risk of fraud and 
abuse. Similarly, bank and other financial regulators need to require 
that records be retained in order that their examiners can insure the 
safety and soundness of the institutions and their compliance with all 
relevant regulatory requirements. The standards set forth in the SEC's 
existing electronic recordkeeping rule, Rule 17a-4(f), such as the 
requirement that an electronic recordkeeping system preserve records in 
a non-rewritable and non-erasable manner, are essential to the SEC's 
investor protection mission and are consistent with the provisions of 
the conference report. The Conferees also expect the SEC to work with 
the securities self-regulatory organizations (SROs) to the extent 
necessary to ensure that accuracy, accessibility, and integrity 
standards also cover SRO recordkeeping requirements in an electronic 
environment.

  Section 104(b)(3)(B) of the conference report permits Federal 
regulatory agencies to interpret the law to require retention of 
written records in paper form, if there is a compelling governmental 
interest in law enforcement for imposing such requirement, and if 
imposing such requirement is essential to attaining such interest. The 
Conferees expect the SEC would be able to use this provision to require 
brokers to keep written records of agreements required to be obtained 
by the SEC's penny stock rules.
  Exemptions to Preemption.--Section 102(a). This subsection expressly 
gives the States the authority to modify, limit or supersede provisions 
of Section 101 in certain ways if the State enacts the provisions of 
the Uniform Electronic Transactions Act as approved and recommended for 
enactment by the National Conference of Commissioners on Uniform State 
Laws in 1999 (UETA).
  Prevention of Circumvention.--Section 102(c). Under Section 102(a), 
States may supersede this Act if they adopt UETA, subject to certain 
limitations section forth in Section 102(a). Section 8(b)(2) of UETA 
allows States to impose delivery requirements. Section 102(c) makes 
clear that States retain the authority provided under Section 8(b)(2), 
provided that the State does not circumvent Titles I or II of this Act 
by imposing nonelectronic delivery methods. Thus, provided that the 
delivery methods required are electronic and do not require that 
notices and records be delivered in paper form, States retain their 
authority under Section 8(b)(2) of UETA to establish delivery 
requirements.
  Filing and Access Requirements.--Section 104(a) of the conference 
report protects standards and formats developed by a Federal regulatory 
agency, self-regulatory organization, or State regulatory agency for 
records required to be filed with it. Thus standards and formats 
developed by the SEC for electronic filings for systems such as EDGAR 
and IARD, and similarly, the CRD system, a joint federal-state system 
for registering securities firms and their personnel, all would be 
covered by Section 104(a). The standards and formats for EDGAR, the 
IARD, and the CRD have been developed over many years, and both the SEC 
and securities industry have expended significant resources to make 
these complex systems work for regulators and investors alike. The 
importance of this provision has been intensified by the very real 
threat of security breaches by computer hackers.
  Preservation of Existing Rulemaking Authority.--Section 104(b). This 
Act will affect requirements that are imposed by Federal and state 
statutes, regulations, and rules of law. No one agency is charged with 
interpreting its provisions; instead, under Section 104(b), regulatory 
agencies that have authority to interpret other statutes may interpret 
Section 101 with respect to those statutes to the extent of their 
existing interpretative authority. This provision provides important 
protection to both affected industry and consumers. It is impossible to 
envision all of the ways in which this Act will affect existing 
statutory requirements. This interpretative authority will allow 
regulatory agencies to provide legal certainty about interpretations to 
affected parties. Moreover, this authority will allow regulatory 
agencies to take steps to address abusive electronic practices that 
might arise that are inconsistent with the goals of their underlying 
statutes. For example, if a broker were to deceive a person into 
pledging equity in their home for a loan based on false representations 
about the loan's terms and conditions, the broker's action could be 
challenged under any applicable statute that prohibited such deception 
and false representations, even if the consumer executed the loan 
documents electronically and consented to the use of the electronic 
contract and records in compliance with the terms of this Act. Without 
this authority, predators might argue that this Act somehow immunizes 
the abusive practice, notwithstanding the underlying statutory 
requirement, and consumers and competitors would have to wait for 
resolution of the issue through litigation.

  I would also like to clarify the nature of the responsibility of 
Government agencies in interpreting this bill. As the bill makes clear, 
each agency will be proceeding under its preexisting rulemaking 
authority, so that regulations or guidance interpreting section 101 
will

[[Page H4359]]

be entitled to the same deference that the agency's interpretations 
would usually receive. This is underlined by the bill's requirements 
that regulations be consistent with section 101, and not add to the 
requirements of that section, which restate the usual Chevron test that 
applies to and limits an agency's interpretation of a law it 
administers. Giving each agency authority to apply section 101 to the 
laws it administers will ensure that this bill will be read flexibly, 
in accordance with the needs of each separate statute to which it 
applies.
  Any reading under which courts would apply an unusual test in 
reviewing an agency's regulations would generate a great deal of 
litigation, creating instability and needlessly burdening the courts 
with technical determinations. Likewise, because these regulations will 
be issued under preexisting legal authority, any challenges to those 
regulations will proceed through the methods prescribed under that 
preexisting authority, whether pursuant to the Administrative Procedure 
Act or some other statute. Again, this will ensure that any challenges 
to such regulations are resolved promptly and minimize any resulting 
instability and burden. Of course, such regulations must satisfy the 
requirements of the Act.
  Authority To Exempt From Consent Provision.--Section 104(d)(1) and 
(2). It is my understanding that the conference report's consent 
provisions are similar to much of the SEC's guidance in the electronic 
delivery area. Section 104(d)(1) permits agencies such as the SEC to 
continue to provide flexibility in interpreting the consent provisions 
anticipated by the conference report. In addition, a specific provision 
contained in Section 104(d)(2) anticipates that the SEC will act to 
clarify that documents, such as sales literature, that appear on the 
same Web site as, or which are hyperlinked to, the final prospectus 
required to be delivered under the federal securities laws, can 
continue to be accessed on a Web site as they are today under SEC 
guidance for electronic delivery.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Virginia (Mr. Davis).
  (Mr. DAVIS of Virginia asked and was given permission to revise and 
extend his remarks.)
  Mr. DAVIS of Virginia. Mr. Speaker, I rise today to express my strong 
support for S. 761, the Electronic Signatures in Global and National 
Commerce Act. This legislation marks a critical positive step towards 
promoting the growth and development of electronic commerce which has 
emerged as the driving force in our Nation's economy.
  Today there are approximately 17 million households on-line and that 
number is expected to almost triple by 2004. Revenue generated from the 
Internet increased by 62 percent and totaled $524 billion in 1999. That 
figure is likely to reach $850 billion by the end of 2000 and a 
staggering $1.6 trillion by 2003.
  Now what these figures demonstrate is the seemingly boundless 
potential that electronic commerce has to offer our economy in terms of 
both economic prosperity and ease of communication. Our computers are 
windows to a diverse and limitless electronic venue that mimics the 
traditional free market but which is still developing in terms of the 
parameters under which consumers and businesses interact with each 
other.
  The E-Sign bill adopts one of the most critical components of any 
successful market economy to the digital environment: The existence of 
the rule of law and the enforcement of written agreements and 
transactions that follow predetermined rules of notice, disclosure 
rights and obligations. All other things being equal, when parties know 
that the signatures guarantee accountability, that they gain benefits, 
and at the same time undertake certain obligations in return, their 
behavior is necessarily shaped by the certainty which results when 
parties are contractually bound. Of course, this paradigm which has 
been rooted in common law for centuries and dominates contracts course 
work during the first year of law school, is the essence of paper-based 
contracts and transactions.
  Now, as we enter the digital age and the dynamic electronic 
marketplace expands, the absence of a uniform legal mechanism for 
digital signatures and records threatens to restrain the booming 
commerce that is taking place over the Internet.

                              {time}  1145

  With the Internet as the marketplace of the 21st century, increasing 
its use depends on developing and retaining consumer and business 
confidence in the legal enforcement of digital signatures.
  S. 761 creates this necessary legal certainty. By allowing American 
businesses and individuals the ability to engage in commerce, knowing 
that their transactions are full and legal and valid, I believe we will 
see enormous savings to business, greater efficiency in the market, and 
faster paperless transactions that will translate into lower costs for 
consumers.
  Another important objective in passing this legislation is the 
assurance that American principles on the use and acceptance of 
electronic signatures and records will be emulated overseas, ensuring 
that American businesses will not be put at a competitive disadvantage 
by restrictive foreign laws.
  Let me finish by thanking the gentleman from Virginia (Mr. Bliley), 
who has worked very hard to bring this well thought-out and critical 
measure to the floor today. S. 761 is an important step in reconciling 
our legal system with modern-day technology. It is essential to 
fostering the continued growth of electronic commerce that is 
propelling America's economic prosperity in the Information Age. I urge 
all my colleagues to vote in favor of this conference report.
  Mr. DINGELL. Mr. Speaker, I yield 1\1/2\ minutes to the distinguished 
gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Speaker, I thank the very distinguished 
gentleman from Michigan (Mr. Dingell), our senior Democrat in the 
Congress, for yielding me this time and for his strong support of this 
conference report.
  Mr. Speaker, the Internet has become an integral part of our daily 
lives at work and at home. Because of the Internet, the American people 
have access to services and information that were unheard of 5 or 10 
years ago. Approval of this conference report is a step towards 
ensuring that American businesses and consumers are able to take the 
fullest advantage of the digital revolution by being able to contract 
as well as to communicate over the Internet.
  This legislation promotes the use of electronic signatures by 
providing a consistent and predictable national framework of rules 
governing the use of electronic signatures. It will provide consumers 
and companies doing business on the Internet legal certainty over 
electronic signatures until all 50 States pass their own legislation on 
the legality of electronic transactions under the Uniform Electronic 
Transaction Act.
  It is not an attempt to regulate electronic commerce. It merely 
declares the validity of electronically created contracts and records. 
But it retains individual choice and personal security. As the 
supportive statements of the gentleman from Virginia (Chairman Bliley) 
and the gentleman from Michigan (Mr. Dingell), the ranking Democrat, 
have underscored, this is balanced, bipartisan legislation that will 
allow the American people to utilize the Internet to its fullest 
potential. So I urge a unanimous vote on this conference report.
  Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Louisiana (Mr. Tauzin), chairman of the subcommittee.
  (Mr. TAUZIN asked and was given permission to revise and extend his 
remarks.)
  Mr. TAUZIN. Mr. Speaker, let me first thank the gentleman from 
Virginia (Mr. Bliley), the chairman of our Committee on Commerce and 
the leader of our conference with the Senate, for the production of 
this incredibly, I think, historic act today. Let me also thank the 
gentleman from Michigan (Mr. Dingell) and the gentleman from 
Massachusetts (Mr. Markey), who joined the gentleman from Ohio (Mr. 
Oxley) and I as the five Members of the conference committee who duked 
it out with 17 Senators on the conference committee in order to produce 
this, I think, very good result, and, as I said, which we endorse 
today, albeit the fact that we believe at some point we are going to 
have to come back and make some repairs in it in order to make sure 
this does not become a haven for civil class-action lawsuits.
  Having said that, let me also use this moment to pay special homage 
and thanks to the gentleman from Richmond, Virginia (Mr. Bliley), the 
chairman of the Committee on Commerce,

[[Page H4360]]

who is today adding another star on the chest of this warrior for 
telecommunications reform.
  The gentleman from Virginia (Mr. Bliley), as my colleagues know, was 
our chairman when he produced the historic 1996 Telecommunications Act 
that rewrote the 1930s laws on telecommunications, something we have 
been trying to do for a decade, and accomplished under his 
chairmanship.
  The gentleman from Virginia (Mr. Bliley) recently produced for us the 
conference report and the final action on the bill to deregulate 
satellites in this country and around the world, and that was an 
amazing and important accomplishment of his tenure.
  I mentioned earlier the on-line privacy acts that are going to 
provide Americans with much more security and privacy as they enter 
this new world of electronic commerce. Much of it is the work of the 
gentleman from Virginia (Chairman Bliley).
  The national 911 bill that will provide a national number for people 
to call in terms of emergencies on the Nation's highways is a product 
of his tenure as chairmanship; now this historic digital signature act 
of the year 2000.
  But the gentleman from Virginia (Mr. Bliley) is not through. This 
afternoon, we take up anti-spam legislation to protect Americans on the 
Internet from the avalanche of damaging and very disruptive spam 
operations that hurt electronic commerce and damage our capacity to use 
the Internet efficiently to communicate with one another.
  He is a cosponsor with me of the Truth in Billing Act to do something 
about making sure the telephone company bills we get clearly disclose 
what all those charges are about so Americans understand what is on 
that massive and complicated telephone bill. The gentleman from 
Virginia (Mr. Bliley) has been truly a warrior of the 
telecommunications reform.
  Today, we not only celebrate a historic, I think, beginning of making 
sure that electronic commerce is secure and legal and binding into the 
future, but I also see the gentlewoman from California (Ms. Eshoo), who 
I want to commend for her early work on this issue for many years. But 
today we not only celebrate the passage of this act, we celebrate, as 
the gentleman from Virginia (Mr. Bliley) is nearing his retirement, an 
incredible series of accomplishments on behalf of the chairman of our 
Committee on Commerce.
  Mr. Speaker, today I rise in support of the Conference Report to 
accompany S. 761, the ``Electronic Signatures in Global and National 
Commerce Act.'' This historic legislation, I believe, will promote the 
growth of electronic commerce and the Internet economy.
  For the first time in our nation's history, this legislation mandates 
that electronic signatures and records may take the place of 
handwritten signatures and hard, or paper, documents. And for the first 
time in our history, electronic signatures and records will have full 
legal validity.
  This bill, once enacted into law, will bring enormous savings to 
business through greater efficiency, faster transactions, and reduced 
paperwork. Moreover, consumers will save from lower transactions costs.
  S. 761, I must also mention, provides for extensive consumer 
protection. Not only are existing state and federal consumer protection 
laws unaffected, but the provisions regarding consent afford consumers 
with the greatest possible safeguards against fraud imaginable. 
Consumers must opt-in to electronic transactions, receive full 
disclosure of terms and conditions, and ultimately prove that they can 
electronically access and retain the information that is the subject of 
the consent. I submit that in all my time in Congress, I have never 
seen a more involved statutory framework for purposes of manifesting 
consent.
  In addition, S. 761 does not ignore international developments. It 
directs the Secretary of Commerce to examine foreign laws that may be 
an impediment to the use and acceptance of electronic signatures and 
records. The Secretary must also promote e-signatures overseas and work 
to remove the foreign barriers and impediments to commerce in 
electronic signatures and records.
  Finally, this legislation before us technology neutral. Mr. Speaker, 
in developing this legislation, the Conference Committee recognizes 
that certain technologies are more secure than others. The Committee 
also recognizes that consumers and businesses must as well be free to 
select the technology that is most appropriate for their particular 
needs, taking into account the importance of a transaction, the special 
nature of a transaction, and the corresponding need for assurances. To 
this extent, S. 761 is consistent with the ``Government Paperwork 
Elimination Act'' that we passed last Congress.
  Mr. DINGELL. Mr. Speaker, I yield 3\1/2\ minutes to the distinguished 
gentleman from Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, I thank the gentleman from Michigan for 
yielding me this time. I would like to engage in a colloquy, if I may, 
with the gentleman from Virginia (Mr. Bliley) on the consumer consent 
provision in the conference report on electronic signatures.
  Is it the understanding of the gentleman from Virginia, Mr. Speaker, 
that pursuant to subsection 101(c)(1)(C)(ii) of the conference report, 
a consumer's affirmative consent to the receipt of electronics records 
needs to ``reasonably demonstrate'' that the consumer will be able to 
access the various forms of electronic records to which the consent 
applies?
  Mr. BLILEY. Mr. Speaker, will the gentleman yield?
  Mr. MARKEY. I am glad to yield to the gentleman from Virginia.
  Mr. BLILEY. Yes, Mr. Speaker. The conference report requires a 
``reasonable demonstration'' that the consumer will be able to access 
the electronic records to which the consent applies. By means of this 
provision, the conferees sought to provide businesses and consumers 
with a simple and efficient mechanism to substantiate consumers' 
ability to access the electronic information that will be provided to 
them.
  Mr. MARKEY. Mr. Speaker, I agree. The conferees did not intend that 
the ``reasonable demonstration'' requirement would substantially burden 
either consumers or the person providing the electronic record. In 
fact, the conferees expect that a ``reasonable demonstration'' could be 
satisfied in many ways.
  Does the gentleman from Virginia agree with me that conferees intend 
that the reasonable demonstration requirement is satisfied if the 
provider of the electronic records sent the consumer an e-mail with 
attachments in the formats to be used in providing the records, asked 
the consumer to open the attachments in order to confirm that he could 
access the documents, and requested the consumer to indicate in an e-
mail response to the provider of the electronic records that he or she 
can access information in the attachments?
  Mr. BLILEY. Mr. Speaker, will the gentleman further yield?
  Mr. MARKEY. I yield to the gentleman from Virginia.
  Mr. BLILEY. Yes, Mr. Speaker. An e-mail response from a consumer that 
confirmed that the consumer can access the electronic records in the 
formats provided to the consumer as e-mail attachments would satisfy 
the reasonable demonstration requirement.
  Mr. MARKEY. Mr. Speaker, does the gentleman from Virginia also agree 
with me that the reasonable demonstration requirement is satisfied if 
it is shown that, in response to such an e-mail, the consumer actually 
accesses records in the relevant electronic format?
  Mr. Speaker, I yield to the gentleman from Virginia (Mr. Bliley).
  Mr. BLILEY. Yes, Mr. Speaker. The requirement is satisfied if it is 
shown that, in response to such an e-mail, the consumer actually 
accesses the information contained in electronic records in the 
relevant format.
  Mr. MARKEY. Mr. Speaker, on another matter, with respect to penny 
stocks, would the gentleman from Virginia agree that conference reports 
preserve the ability of the SEC to require written customer statements 
with respect to a purchase of penny stocks, as was required in the 
House-passed version of this bill?
  Mr. BLILEY. Mr. Speaker, if the gentleman will yield, the gentleman 
from Massachusetts is correct. Following enactment of the Penny Stock 
Reform Act of 1990, the SEC has developed a cold call rule that 
requires brokers to obtain a signed customer statement regarding any 
penny stock to be purchased before any transaction takes place.
  In addition, customers are provided with important written 
disclosures involving risks of investing in penny stocks. Section 104 
of the conference report specifically permits Federal regulatory 
agencies, such as the SEC, to

[[Page H4361]]

interpret the law to require retention of written records in paper form 
if there is a compelling governmental interest in law enforcement for 
imposing such a requirement and if imposing such a requirement is 
essential to attaining such interest. The conferees expect the SEC 
would be able to use this provision to require brokers to keep written 
records of all disclosures and agreements required to be obtained by 
the SEC's penny stock rule.
  Mr. MARKEY. Mr. Speaker, without question, penny stocks are a very 
special category of extremely dangerous investments that I think will 
require that the SEC needs to be able to ensure additional disclosure 
and agreements to continue to be done in writing to help protect 
consumers against fraud and facilitate the SEC securities law 
enforcement mission. I thank the gentleman from Virginia (Mr. Bliley) 
very much for his assistance.
  The SPEAKER pro tempore (Mr. Gibbons). The Chair advises the Members 
that the gentleman from Virginia (Mr. Bliley) has 18 minutes remaining, 
and the gentleman from Michigan (Mr. Dingell) has 22 minutes remaining.
  Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from Ohio 
(Mr. Oxley), chairman of the Subcommittee on Finance and Hazardous 
Materials.
  (Mr. OXLEY asked and was given permission to revise and extend his 
remarks.)
  Mr. OXLEY. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise in support of the E-Sign conference report. This 
legislation is deceptively simple. It provides that anywhere in law a 
written signature or paper record is required, that requirement can be 
satisfied by an electronic signature or electronic record. Other than 
repealing some of our law school educations, this legislation provides 
a real future for electronic commerce.
  Its application is clearly sweeping. It will promote legal certainty 
in all on-line transactions. In so doing, it will accelerate the growth 
of electronic commerce. E-Sign is a rare example of legislation in 
which Congress is being proactive rather than reactive.
  Because the access to financial information has improved 
dramatically, the Internet provides significant opportunities for more 
Americans to become directly involved in the capital markets.
  Be it trading stocks on-line, assembling a retirement portfolio or 
getting a mortgage on-line, E-Sign will allow consumers to do it 
faster, cheaper, and better.
  Today, millions of Americans trade securities and manage their 
investments on-line. The cost savings to investors are enormous. Full-
service brokerage can cost as much as $400 per trade. On-line brokerage 
costs less than $10 per trade at some firms.
  One goal of E-Sign is to allow consumers to open accounts on-line 
without mandating a physical signature or a brokerage agreement and 
mailing it back to the broker. E-Sign will lower transaction costs to 
firms and improve the audit trail for customers.
  E-Sign will also facilitate an increase of the provision of insurance 
products on-line and provide for on-line mortgages. It has been 
estimated that consumer savings will amount to $5 billion in mortgages 
alone.
  I want to highlight two other provisions to which I contributed. The 
first is the amendment that I sponsored to allow letters of agency, or 
LOAs, to be submitted over the Internet for the purpose of changing 
telecommunications carriers.
  The second provision of which I took special interest is intended to 
limit the liability exposure of insurance agents so they are not liable 
for deficiencies in electronic procedures.
  I want to take this opportunity to commend the gentleman from 
Virginia (Chairman Bliley) for his leadership once again on this 
important legislation. It is a fitting legacy to his chairmanship, 
along with Gramm-Leach-Bliley, Litigation Reform, and the 
Telecommunications Act, among many others. Under the gentleman's 
leadership, the Committee on Commerce has become the e-commerce 
committee.
  I also want to thank the gentleman from Michigan (Mr. Dingell), the 
gentleman from Massachusetts (Mr. Markey), and the gentleman from 
Louisiana (Mr. Tauzin) for their work on the conference.
  E-Sign is not just a bill that will benefit companies that develop 
new technology. It will also help American businesses, large and small, 
use technology to develop their businesses and provide new and 
innovative services to consumers.
  This a proud day for the Congress, a proud day for the Committee on 
Commerce.

                              {time}  1200

  Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Green).
  Mr. GREEN of Texas. Mr. Speaker, I thank the gentleman from Michigan 
(Mr. Dingell), the ranking member, and also the gentleman from Virginia 
(Mr. Bliley), the chairman of the committee, for their yeomen's efforts 
on this bill.
  Our signature is our word. It binds all agreements. The signatures of 
our forefathers freed our country. Today, in many respects, we are 
going to free the American consumer. The legislation before us today 
will allow an electronic signature to replace a written signature for 
many business transactions.
  The electronic signature, in many instances, will speed transactions 
between consumers and businesses across States and across nations. Not 
having to sign and mail important documents does come, however, at a 
price. As a member of the Committee on Commerce and the Subcommittee on 
Telecommunications, Trade, and Consumer Protection, I supported 
ensuring that consumers are protected from the fraudulent use of their 
name. To this end, a balanced disclosure policy that allows consumers 
the choice of receiving important documents either on paper or 
electronically has been incorporated in this legislation.
  While there are a great many people in this country that are computer 
literate, there are those that are more comfortable in signing their 
names to paper. This bill accommodates those people. I also want to 
point out that not all documents are eligible for the electronic 
signature. Wills, court orders, foreclosures, termination of health 
benefits are just examples of the documents that must be delivered and 
signed directly by the consumer.
  This legislation will continue our progress into the new digital 
millennium, and I am pleased the conference committee produced this 
solid bipartisan legislation that helps and protects the American 
consumers.
  Mr. Speaker, this is a good piece of legislation, and again I thank 
the chairman of the committee and also our ranking member for their 
efforts on this.
  Mr. BLILEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Armey), the distinguished majority leader.
  Mr. ARMEY. Mr. Speaker, I thank the gentleman from Virginia for 
yielding me this time, and let me thank the Committee on Commerce for 
another very, very good piece of legislative work. Not only was it an 
outstanding job in committee, preparing this bill for the floor, but 
even in the sometimes more rigorous business of working with the other 
body in conference committee we find the dedication of the committee to 
be excellent, and we have before us an excellent product.
  Mr. Speaker, we live in a world of innovation and invention that 
boggles the mind. Each day we use dozens of new technologies that we 
would not even have imagined a few short years ago. Today, we are 
removing government obstacles that prevent consumers and businesses 
from making the most of these wonders of technology. We are checking 
off a major item in our e-contract with high-tech America.
  Most of us see the advantages of technology in our daily lives as 
consumers, but there is a larger, invisible benefit: Increasing 
productivity in every business in America. Our modern economy makes it 
possible for a business to go on-line and order supplies quickly and 
accurately. It is simple and it is paperless, with one little hitch: 
Today, no sale is a legal contract without a piece of paper on file 
somewhere. The materials are ordered, the products are custom made, the 
special delivery instructions are carried out, all with just a few 
strokes of the keyboard. But for legal backup that paper must always be 
stored in a file cabinet somewhere.

[[Page H4362]]

  This bill changes all that. Now, an electronic document will be 
considered a contract for legal purposes. A simple change with a 
dramatic impact. Just think of all those file cabinets full of purchase 
orders and invoices that will be no longer needed.
  Consumers will see the benefits in their lives, too. Today, they can 
go on-line to buy a car, do all the research, figure out what they want 
to buy and find the exact car they want among all the dealerships 
nationwide. But when they go to finally settle on the deal, today, they 
have got to commit pen to paper and wait on regular mail.
  A consumer can go on-line to research and find a mortgage but, again, 
that last step must be on paper and delivered by snail mail. We can get 
a world of information on mutual funds by searching on-line; but, 
again, that last step has to be on paper, delivered by the post office.
  This bill changes all that. It eliminates the paper, the delay, the 
inconvenience by letting the consumer open that account on-line, 
confident that the transaction has the same standing in law as if they 
had signed a contract on paper at a bank or investment company. More 
importantly, we consumers can choose to have information about our 
accounts sent to us electronically rather than on paper. Instead of 
storing shoe boxes full of monthly statements, we can receive 
statements by e-mail and save them on our computers.
  With this bill, Mr. Speaker, each of us will have increased 
confidence that an on-line transaction has the same legal standing as 
if we had traveled down to the bank, stood in line for an hour, and 
signed a bunch of papers. What we get from this bill, Mr. Speaker, is 
paperless transactions. What we receive is electronic records. With 
this bill, we save our time, we save frustration, and we save trees.
  Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
New York (Mrs. Maloney).
  Mrs. MALONEY of New York. Mr. Speaker, I thank the ranking member, 
who is also the dean of our caucus, for his leadership on this issue 
and so many others and, of course, the gentleman from Virginia (Mr. 
Bliley).
  We are at the beginning of a new century which is more information, 
more wired, and technology driven. Our evermore global new economy is 
changing the way Americans work and communicate with each other. This 
conference committee report is part of that change, and I fully endorse 
it.
  This legislation knocks down another barrier to a fully incorporated 
digital information-based economy. The bill requires that e-signatures 
be treated legally, the same as written ones, for commercial contracts, 
agreements and records. For consumers, this bill means less paperwork, 
major time savings and reduced costs. This will greatly increase the 
attractiveness and efficiency of on-line commerce.
  An important privacy protection will require consumers to opt in to 
receive records electronically. This strikes an important balance, 
ensuring that consumers' interests are adequately protected as 
transactions are increasingly completed in digital form.
  While the information economy is changing the way people live around 
the world, it is having an even more profound impact on the 
congressional district in New York City, which I represent, 
particularly the silicon alley area. The technology industry is 
responsible for 100,000 new jobs in New York City alone in the 1990s. 
These are highly desirable, professional jobs that are an important 
addition to our city. This bill is an important step in keeping this 
progress moving forward.
  I thank the conferees for their important work on this bipartisan 
issue, and I urge its passage.
  Mr. BLILEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Cox), a member of the committee and chairman of the 
Republican Policy Committee.
  Mr. COX. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I rise in strong support of this conference report. I would 
like to thank the chairman of the full committee for his leadership of 
our House effort in the House-Senate conference. It is a very, very 
important step for this Congress that we are completing action on this 
legislation.
  The growing use of the Internet, of course, gave rise to the need for 
this legislation. It created questions about whether or not a piece of 
paper, pen and ink, would be necessary in order to make a contract that 
otherwise was negotiated and agreed to on-line.
  We have just started a new millennium. In the last millennium, 
several centuries ago, there were similar questions about whether one 
could form a contract in some way other than with a stamp and hot wax, 
and I am happy to say that with such high-tech inventions as the 
ballpoint pen at hand, legislatures all over the world recognized the 
efficiency of permitting people to make agreements that were legally 
binding without a stamp and hot wax. Now, in the 21st century, we are 
asking ourselves again whether the latest technology will be sufficient 
to form an agreement. We have agreed that the answer must be yes.
  No longer will there be inconsistency among the 50 States over the 
question of whether a contract is a contract just because it was made 
over the Internet. Now, an electronic signature, that is an 
individual's agreement given on-line, will be just as legally valid as 
the handwritten signature. And this is a good thing, because they are 
not just mere substitutes for one another.
  In fact, an electronic signature is more secure. Present-day 
technology permits us to ascertain more accurately whether or not the 
individual is actually the person making the agreement or whether the 
person at the other side of the contract is the contracting party much 
more so than signatures, which can more easily be forged. Digital 
signatures also permit us to ascertain whether or not the contract 
itself is the very contract that we thought we were signing or whether 
it has been altered in some way. These are real benefits over paper and 
ink.
  There is one other thing about this conference report that is worth 
mentioning, and that is that it permits the parties themselves to agree 
on the specific technologies that they find satisfactory in coming to a 
meeting of the minds. When we pass legislation that is going to be 
valid not just for a month or for a year; but for the indefinite 
future, it is vitally important we permit technology to advance, that 
we not impede it with our legislative enactments. And this flexibility, 
my colleagues, I think, is a very important aspect of this legislation.
  Finally, I am pleased that this legislation directs the Commerce 
Department, the executive branch of our government to work with foreign 
governments to make sure that this rule, which will now apply in the 50 
States, also applies worldwide.
  Mr. DINGELL. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman 
from California (Ms. Eshoo).
  Ms. ESHOO. Mr. Speaker, I rise in support of this very important 
conference report that is before us today. As so many of my colleagues 
have mentioned, we have moved into a new era, from pen and quill, from 
wax, from all kinds of imprints that would conclude a contractual 
agreement between parties.
  Back in 1996, I believe I was the first to establish a virtual 
district office, where constituents could go on-line to fill out the 
government forms. But I very quickly realized that they could not sign 
off on these forms. So it was in that Congress that I brought to my 
colleagues the whole issue of digital signatures.
  The government now, because of the legislation that I had introduced 
in the last Congress, and it became law, now allows for digital 
signatures. But today, this legislation, very importantly, recognizes 
that electronic commerce is here, here to stay, and that we, too, have 
to extend across the States to businesses and to individuals the 
allowance of what we now call a digital signature.
  I am very proud of the work that we did that is reflected in the 
legislation that I introduced, and building on it, of course, what our 
chairman and so many others have done. Two very important aspects of 
this legislation are that the financial services community is included 
in this and, very importantly, that there are consumer protections. Our 
chairman accepted the work that some of us did. There was a very 
important amendment that the gentleman from Washington (Mr. Inslee), 
the gentleman from Virginia (Mr. Moran), myself, and others introduced. 
That strengthened the backbone of this

[[Page H4363]]

bill. It has made it better for the consumer. It has made it better for 
our Nation. I salute him for his leadership.
  Mr. Speaker, I thank those that have worked as conferees and have 
held onto this. And I think that as we embark upon this Internet 
revolution, this new economy, that there are more challenges upon us. 
And I think the first, and one of the major steps, is being taken 
today. So I urge my colleagues to accept this conference report. It is 
a very important one.
  I look to the future of building on the issues of privacy, of cyber 
security, of intellectual property, of copyright and also of financial 
reporting standards. Please vote for this. This is a step that matches 
the new century, and I salute our chairman for his leadership on it.
  Mr. BLILEY. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. Fossella), a member of the committee.
  (Mr. FOSSELLA asked and was given permission to revise and extend his 
remarks.)

                              {time}  1215

  Mr. FOSSELLA. Mr. Speaker, I thank the chairman of the committee for 
yielding me the time and to add to those who have said prior how this 
will add, I think, to a wonderful legacy that the gentleman from 
Virginia (Chairman Bliley) has earned as chairman of the Committee on 
Commerce and the ranking member and others who participated.
  Mr. Speaker, I rise today in support of the conference report to S. 
761, the Electronic Signatures in Global and National Commerce Act.
  The most recent Commerce Department report on the digital economy 
released last week was aptly titled Digital Economy 2000. 
Interestingly, this is a change from the two previous reports, which 
were entitled The Emerging Digital Economy.
  The Commerce Department's reasoning for the title change was simple: 
the digital economy is no longer emerging but, rather, it has already 
arrived.
  The Electronic Signatures in Global and National Commerce Act, better 
known as E-SIGN, is the most important step that Congress has taken to 
date ensuring that not only the benefits of the digital economy are 
sustained but, more importantly, that those benefits are grown and 
enhanced substantially.
  By according electronic records and signatures the same legal effect 
and enforceability as those enjoyed by non-electronic records and 
signatures, E-SIGN enables more complex transactions to take place 
among a wider range of economic participants.
  For example, the American consumer no longer will be limited to 
purchases of books or CDs on-line. Rather, with the enactment of E-
SIGN, the American consumer can participate in complex on-line 
transaction, such as the purchase of a home, a life insurance policy, 
or the establishment of an IRA, to name but a few.
  Moreover, E-SIGN will empower small businesses to more effectively 
compete with large corporations. Those businesses will be empowered to 
engage in on-line transactions which are more complex in nature and 
greater in value.
  Both the American consumer and the small businessman can more fully 
harness the efficiencies and the value of the digital economy with E-
SIGN.
  America's larger economies will also benefit from the added legal 
certainty brought to the digital marketplace with E-SIGN.
  With that, and for all those reasons mentioned above, Mr. Speaker, I 
urge strong support of this legislation.
  Mr. DINGELL. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from California (Mr. Berman).
  Mr. BERMAN. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, I am very pleased to rise in support of passage of the 
conference report.
  When the bill first came before the House, I had some very serious 
concerns that it might undermine the many consumer laws that we have 
fought hard to develop, the laws that are the very basis of 
relationships of trust between consumers and merchants.
  At that time, many of us warned that a bill unfriendly to consumers 
would not be good for the very industries that wanted it, those moving 
into the new world of electronic commerce.
  Validating electronic signatures and contracts is essential for the 
continued growth and security of e-commerce. But this important goal is 
expanded by some with the aim of eliminating virtually all paper 
requirements; and that expansion, to my way of thinking, was excessive.
  For instance, H.R. 1714 as originally passed allowed regulated 
industries to eliminate paper records but did not require businesses to 
maintain their records in a form that could be accessed by government 
regulators.
  Our efforts to oppose the worst of this legislation have led to a 
very good result. The conference has reshaped the bill to protect 
consumers from fraud and to provide assurances that consumers will know 
their legal rights before they opt-in in receiving electronic records, 
understand what records will be affected, and to be able to get the 
records in paper should they need to.
  Further, the report preserves State and Federal unfair deceptive 
practices laws.
  The conference report establishes a principle that the Internet must 
be a safe place for consumers. I credit my Democratic colleagues, the 
gentleman from Michigan (Mr. Dingell) and his other colleagues on the 
conference committee, for defending the need to preserve consumer 
protections and the excellent leadership of the gentleman from Virginia 
(Chairman Bliley) in achieving an appropriate balance in an excellent 
piece of legislation.
  I am confident that, in passing this report, we will be passing a 
bill that will enable electronic conference to go ahead without 
undermining consumer protections or the Government's ability to fulfill 
its role in industry oversight. A very good job has been done by the 
conference committee.
  I urge the passage of the bill.
  Mr. BLILEY. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman 
from Maryland (Mrs. Morella).
  Mrs. MORELLA. Mr. Speaker, I thank the gentleman for yielding me the 
time. I also thank the gentleman from Virginia (Chairman Bliley) for 
the leadership he has shown in bringing this bill to the floor and all 
the other achievements in this Congress and previous Congresses. We are 
going to miss him. And again, I appreciate seeing him in this real 
successful effort.
  The gentleman from Michigan (Mr. Dingell), the ranking member, has 
been great. A lot of people have worked on this conference report. I 
and the American public appreciate that very much.
  I certainly am in strong support of the bipartisan conference report 
on the Electronic Signatures in Global and National Commerce Act. I am 
delighted to see such a comprehensive agreement has been reached.
  The fast growth of electronic commerce that has fueled the economic 
boom in recent years needs to be fostered, and this bill does that.
  By validating electronic contracts, placing them with an equal legal 
standing as paper contracts, while assuring essential consumer 
protections, this conference report will further ensure that the scope 
of private enterprise on the Internet remains limited only by 
imagination. All of these elements have been considered.
  As the States continue to set up their own regulations, Federal 
guidelines need to be in place which establish a framework for handling 
electronic signatures. I am encouraged that such a mechanism has been 
constructed that does not impede on the State's role of protecting 
consumers and the solvency of our Nation's financial institutions.
  This legislation in many ways is a recognition of a new era of human 
history. For thousands of years, paper has been the foundation of 
commerce. All contracts and official records needed to be physically 
kept. They had to make their mark in ink.
  But every day more shopping, lending, and a myriad of other business 
transactions are conducted over the Internet. The concept is simple, 
but it signifies a major change. The pen is replaced by the keyboard. 
The paper is replaced by disk drives. The result is the promotion of e-
commerce and the high-tech explosion that has so drastically altered 
today's society.
  This conference report, however, does not take this step lightly. 
There is an understanding of the newness of the

[[Page H4364]]

medium. And to balance the concerns of cautious consumers, the 
legislation includes provisions meant to protect their interests.
  For instance, businesses must receive the consumer's consent before 
they conduct their dealings electronically. Also, very sensitive 
information still must be transmitted physically. Cancellation or 
termination of health insurance cannot be done via e-mail.
  As is often the case, society acts and Congress follows. By enacting 
this legislation today, we begin to remove some barriers to the 
electronic revolution to clear the Internet open for business.
  Mr. DINGELL. Mr. Speaker, I yield 2\1/2\ minutes to the distinguished 
gentleman from Washington State (Mr. Inslee).
  Mr. INSLEE. Mr. Speaker, I rise with a note of personal satisfaction 
that the House has been able to succeed in fashioning a true bipartisan 
bill. I think that is largely due to the efforts of the gentleman from 
Michigan (Mr. Dingell), the ranking member, and the gentleman from 
Virginia (Chairman Bliley). Their years in service and experience have 
really paid off here in leading this House to be able to find this 
consensus.
  Sometimes new Members, like myself, need to recognize the ability for 
experience to pay off here; and that has happened in this case.
  Mr. Speaker, this is a great bill because, simply, it will allow 
business to move at the speed of light rather than the speed of paper. 
I think in the halls of Congress we have got to recognize that there is 
incredible genius out there every minute of every hour creating new 
products, new consumer benefits. And we in the House have to make sure 
that we help them do that; we remove barriers that are standing in 
their way.
  I represent an extremely high-tech district, Redmond, Washington, 
north of Seattle, where every day there are geniuses coming up with new 
technologies. And this is really a single statement, I think, that the 
House is going to move ahead and recognize a new fact. And that new 
fact is this: there are no just high-tech issues anymore. Everything is 
high tech. This is a statement that the House understands that.
  Secondly, Mr. Speaker, I want to say that we have achieved a market 
success in making sure that consumer rights are protected when this new 
technology is used.
  Several of us had an amendment when the bill was in the House that 
made sure that all consumer protections in the country, all the 
substantive notices and consumer protections, in fact those protections 
of consumers will remain in under this new law.
  In addition, it will make sure that only when consumers want to use 
electronic measures will they be used. So it is a great day.
  Mr. DINGELL. Mr. Speaker, will the gentleman yield?
  Mr. INSLEE. I yield to the gentleman from Michigan.
  Mr. DINGELL. Mr. Speaker, I think the gentleman is raising an issue 
which is important. I would like to observe that the House and, I 
think, the people of the country owe the gentleman from Washington (Mr. 
Inslee) a substantial vote of thanks for his leadership on this matter.
  He offered the amendment which very significantly improved the 
legislation by affording very significant protections to consumers and 
to the public who would use this legislation. That amendment remains in 
the legislation, and it is going to be very helpful.
  I hope the gentleman is proud of what he has done, because the 
country owes him a debt for his significant accomplishment in this 
matter.
  Mr. INSLEE. Mr. Speaker, I thank the gentleman for his comments. I 
will always yield to anyone who has comments of that nature. I thank 
the gentleman so much. That is high praise from the source.
  Mr. Speaker, it is a good day for the House.
  Mr. BLILEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as we approach the end of this process on this historic 
piece of legislation, I do want to take a moment to recognize the hard 
work of our respective staffs who were instrumental in getting us here 
today.
  First let me thank my staff: Paul Scolese; Ramsen Betfarhard; David 
Cavicke; Linda Bloss-Baum, by the way who just gave birth to a new baby 
girl named Alexandra; and Mike O'Rielly. These guys did an outstanding 
job on this bill, and they know more about the substance of this bill 
than anyone.
  I also want to thank Consuela Washington and Bruce Gwinn on the staff 
of the gentleman from Michigan (Mr. Dingell) and Colin Crowell and Jeff 
Duncan from the staff of the gentleman from Massachusetts (Mr. Markey).
  Further, let me thank the diligent staff from the other body, 
especially Maureen McLaughlin from the Senate Commerce Committee. 
Maureen was an outstanding asset to the conference committee.
  I must also express deep thanks to Andy Pincus of the Department of 
Commerce. His willingness to work on this issue in a constructive 
manner is one of the reasons we are here today.
  All of these people have made this successful day possible, and I 
extend my heartfelt gratitude. I thank them for their tireless work and 
dedication.
  I would also take a moment to read through a sampling of the groups 
that support this legislation:
  Business Software Alliance, Microsoft, America Online, Information 
Technology Association of America, American Express Company, DLJDirect, 
American Bankers Association, Citigroup, Information Technology 
Industry Council, American Electronics Association, Fannie Mae, Freddie 
Mac, National Association of Realtors, Oracle, Cable & Wireless, Sallie 
Mae, U.S. Chamber of Commerce, Real Estate Roundtable, Consumer 
Mortgage Coalition, Mortgage Bankers Association, Electronic Financial 
Services Council, Intuit, Federal Express, National Association of 
Manufacturers, Coalition of Electronic Authentication, America's 
Community Bankers, and Investment Company Institute.
  Mr. Speaker, I reserve the balance of my time.
  Mr. DINGELL. Mr. Speaker, I yield back the balance of my time.
  Mr. BLILEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I thank the gentleman from Michigan (Mr. Dingell) for 
his cooperation and particularly the hard work of his staff, as I said 
before. This is a good bill.
  I would just like to say in closing a word about process. We have 
said about as much as needs to be said about this bill. But I would 
like to say to all of my colleagues that I find that, if we sit down at 
the table with our colleagues on the other side of the aisle and we 
respect their positions, their opinions, they will respect ours; and if 
we are sincere about reaching an agreement, we usually can do so.
  It is better to do that than to stand on opposite sides of a room and 
throw rhetorical grenades at each other. We do too much of that.
  The American people sent us up here to do a job. We are doing that in 
the finest tradition with this bill.
  Mr. CROWLEY. Mr. Speaker, I would like to express my strong support 
for the electronic signatures legislation.
  As legislators, it is part of our job to help ensure a sound economy. 
Supporting the growing high-tech industry helps us accomplish this 
important part of our job.
  That is why I am proud to support the Electronic Signatures in Global 
and National Commerce Act and the Conference Report. This much needed 
legislation will provide legal certainty and a national standard for 
business-to-business contracts and some consumer contracts that were 
agreed to on-line, as well as ensure important consumer protections.
  As anyone who has taken out a mortgage knows, courier and other fees 
can be a substantial cost to consumers. By allowing for on-line 
transactions, we can help bring down the costs associated with 
contracts for anything we can purchase on-line.
  Mr. Speaker, back in the 80's, pundits were predicting the paperless 
office. Well, it's the year 2000 and we're still not there. Part of the 
problem is our antiquated system of rules and differing state laws, 
which although important, can serve as a hindrance to interstate 
commerce over the Internet.
  With this legislation, we will be effectively removing one of the 
greatest roadblocks to Internet services. I was proud to cast my vote 
in support of

[[Page H4365]]

this legislation in November, and I am proud to cast my vote in support 
of the conference report today.
  I would like to commend the conferees for agreeing to this balanced 
report and for all of their hard work. This is an important and 
complicated piece of legislation and I believe they deserve a great 
deal of credit for preparing this package.
  I urge all of my colleagues to support this important legislation.
  Mr. SANDLIN. Mr. Speaker, today I voice my support for the conference 
report on S. 761, Electronic Signatures in Global and National Commerce 
Act. Now, more than ever, business is conducted through the Internet 
and the need for a federal standard on electronic contracts, agreements 
and records is critical to the integrity of many of these transactions.
  This historic piece of legislation will essentially give the 
electronic signature the same legal effect as a written signature. 
Although 40 states already have enacted laws to provide for the use of 
electronic signatures, these laws vary greatly. The new federal law, as 
proposed in this conference agreement, would allow states to modify the 
law, provided that the modifications are consistent with the federal 
standard and technology neutral.
  Not only does the proposed national standard give states flexibility 
with regards to its implementation, but it also protects the consumer. 
Under this agreement, a business must present the consumer with a 
statement informing them of their right to have notices and records 
provided electronically or in writing. Consumer protections are further 
ensured by allowing the consumer to withdraw the original consent 
agreement and requiring the business to provide the alternative source 
of transmission.
  Mr. Speaker, I look forward to the new freedom that this conference 
report will provide in interstate and foreign commerce. Consumers will 
now have complete confidence that their electronic contracts, agreement 
and records carry the full weight of law. The E-signature conference 
report is a landmark in that it aligns federal law with the latest 
technology without being partial to the technology industry itself. I 
commend my colleagues for all of the hard work they have done on this 
historic piece of legislation to ensure its swift passage into law.
  Mr. LaFALCE. Mr. Speaker, I rise today in strong support of the 
conference report. The Congress today takes an important step in 
recognizing the importance to our economy of electronic commerce. In so 
doing, Congress also ensures that millions of Americans can begin to 
enjoy the benefits of a safe, reliable, and consumer-friendly 
electronic marketplace. As President Clinton has indicated, the 
bipartisan agreement we are adopting today is responsible and balanced, 
and includes protections to provide consumers with the confidence that 
is essential to conduct on-line transactions in a safe, reliable, and 
trustworthy manner. As a result, this legislation comes to the House 
floor with strong bipartisan and Administration support. President 
Clinton, in fact, has urged the Congress to send the legislation to his 
desk for his immediate signature. I am therefore proud to support this 
bipartisan agreement.
  The legislation achieves the important objective of facilitating the 
use of electronic records and signatures in interstate and foreign 
commerce. The bill also provides that agreements, records, or contracts 
entered into have the same legal effect and recognition as paper 
transactions. Both of these objectives are complemented with provisions 
to ensure that consumers receive the same level of legal protection 
regardless of whether they conduct their transactions on paper or on 
line. For example, consumers must affirmatively consent electronically 
to receiving electronic records in a manner that reasonably 
demonstrates that they can access the information provided. In 
addition, the legislation provides that certain notices must be 
provided in paper, such as notices critical for the protection of 
consumers and public health and safety, notices of cancellation of all 
forms of insurance and insurance benefits, notices of default or 
actions to collect debts, and others.
  When this legislation was initially debated on the House floor last 
year, I expressed concerns about its impact on existing consumer and 
fair lending laws and regulations. My concern centered on the potential 
for consumers to receive one level of protection for in-person, paper 
transactions, and another for on-line transactions. I was also 
concerned about the potential for unscrupulous and predatory practices. 
As a result, Banking Committee Chairman Leach and I, at my behest, 
wrote to the Federal Reserve to elicit their views on the legislation. 
The Federal Reserve, which administers consumer financial services and 
fair lending laws, shared my concerns and agreed that preserving its 
regulatory authority was essential to protecting consumers under 
existing consumer laws. I am happy to note that the conference report 
preserves this important regulatory authority, which has the dual 
benefit of protecting consumers from predatory practices, and providing 
the legal clarity that spares businesses from unnecessary litigation.
  Mr. Speaker, as electronic commerce continues its rapid expansion, I 
fully support an approach that facilitates this growth while also 
protecting the rights of consumers. This conference report accomplishes 
both of these important goals. As our economy moves into the Electronic 
Age, this legislation will provide American consumers with the basic 
protections that they have come to know and expect from their financial 
service providers and from commerce in general.
  Mr. WELLER. Mr. Speaker, thank you for this opportunity to support S. 
761, the Conference Report on the Electronic Signatures in Global and 
National Commerce Act. This effort is groundbreaking, as this 
conference report is largest and most significant legislation on 
electronic commerce to date.
  This bill ensures that electronic signatures and electronic records 
transferred via the Internet will have the same legal effect, validity 
or enforceability as contracts and other records signed by hand on 
paper. The scope of this legislation is broad and will protect 
interstate commerce. I am certain that the result of this important 
legislation will be greater confidence and security in conducting 
business and transactions over the Internet.
  In the recent months, we have come far in our efforts to promote and 
encourage the growth of Internet use and e-commerce. A few weeks ago, 
the House voted to extend the existing moratorium on Internet taxation 
for an additional 5 years. I believe that this important step will give 
the new e-economy the time it needs to grow and flourish at a time when 
the number of new websites and Internet users is doubling every 100 
days!
  Additionally, the House passed legislation recently to eliminate the 
outdated 3 percent excise tax on telephone use. This tax was originally 
collected to help pay the Spanish-American War, a war that ended more 
than 100 years ago! Today, more than 90% of Internet users access the 
Web over telephone lines. I believe it is time to repeal this outdated 
tax and make the information highway just that--a freeway not a 
tollway.
  Mr. Speaker, I am proud to support the Conference Report on S. 761. I 
encourage my colleagues to do the same.
  Mr. CONYERS. Mr. Speaker, the Internet has the potential to be the 
most pro-consumer development in recent history. It can empower 
consumers to obtain more useful information about products--such as 
price comparisons, safety information, and features--and to help 
consumers make more educated purchases.
  But the Internet will never reach its full potential if consumers do 
not feel secure in the electronic marketplace. If we allow the Internet 
to become a lawless ``Wild Wild West'' and a safe-haven for fraudulent 
businesses, people will simply refuse to engage in on-line commerce. 
Ultimately, this is a bad result both for the Internet and for 
consumers.
  The electronic signature legislation that the House passed last fall 
was deeply flawed. It set up a false choice between consumer protection 
and electronic commerce. In fact, the two can--and should--go hand in 
hand.
  While I supported legislation that validated electronic signatures 
and contracts, I opposed H.R. 1714 because it left consumers vulnerable 
to fraud, and it undermined numerous federal and state consumer 
protection laws.
  H.R. 1714 also weakened the ability of federal and state regulators 
to enforce important safety regulations and monitor industries such as 
the financial services industry, and the insurance industry.
  As a result of the hard work of House and Senate Democrats and the 
Administration, the Conference Report that is before us today is a 
great improvement over the House-passed bill.
  The Conference Report contains several new provisions to protect 
consumers. Unlike the House bill, the Conference Report requires that 
consumers receive a notice of their rights before they consent to 
receive documents electronically. Now, there will truly be ``informed 
consent'' by the consumer.
  Equally important, under the Conference Report, the consumer's 
consent must be in the electronic form that will be used to provide the 
information. This is a vast improvement over the original bill because 
it ensures that a consumer can actually receive and open the electronic 
notices that are provided to him or her.
  The Conference Report also creates a framework so that federal 
regulatory agencies can use their rulemaking authority to create 
guidelines for how to properly deliver and manage electronic records. 
This way, the government has the flexibility and authority to prevent 
abuses and fraud.

[[Page H4366]]

  Some Senate Republicans oppose this Conference Report. They say it 
gives consumers too many rights and does not do enough to grease the 
wheels for the financial services industry. I could not disagree more.
  The Conference Report demonstrates that Congress can facilitate 
electronic commerce at the same time that we protect consumers. I am 
confident that this is what is best for the Internet in the long run.
  Mr. BLILEY. Mr. Speaker, I yield back the balance of my time, and I 
move the previous question on the conference report.
  The previous question was ordered.
  The SPEAKER pro tempore (Mr. Foley). The question is on the 
conference report.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. BLILEY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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