[Congressional Record (Bound Edition), Volume 145 (1999), Part 12]
[Senate]
[Pages 17467-17468]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  THE MILLENNIUM DIGITAL COMMERCE ACT

  Mr. LOTT. Mr. President, I rise to address the need for prompt action 
on S. 761, the Millennium Digital Commerce Act. Senator Abraham has 
crafted a solid legislative measure that will promote continued growth 
in electronic commerce.
  The Millennium Digital Commerce Act has 11 cosponsors including 
Senators Wyden, Torricelli, McCain, Burns, Frist, Gorton, Brownback, 
Allard, Grams, Hagel, and myself.
  Mr. President, on June 23, almost one month ago, the Senate Commerce 
Committee unanimously approved and ordered S. 761 reported with an 
amendment in the nature of a substitute. This substitute is widely 
supported by the States, industry, and the administration. In fact, on 
June 22, the day before the mark-up, the Commerce Department issued a 
formal letter of support for this bipartisan measure.
  Mr. President, I ask unanimous consent to have printed in the Record 
the Administration's letter.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                            General Counsel of the


                                  U.S. Department of Commerce,

                                    Washington, DC, June 22, 1999.
     Hon. John McCain,
     Chairman, Committee on Commerce, Science, and Transportation, 
         U.S. Senate, Washington, DC.
       Dear Mr. Chairman: This letter conveys the views of the 
     Department of Commerce on the substitute version of S. 761, 
     the ``Millennium Digital Signature Act,'' that we understand 
     will be marked-up by the Senate Commerce Committee. A copy of 
     the substitute that serves as the basis for these views is 
     attached to this letter.
       In July 1997 the Administration issued the Framework for 
     Global Electronic Commerce, wherein President Clinton and 
     Vice President Gore recognized the importance of developing a 
     predictable, minimalist legal environment in order to promote 
     electronic commerce. President Clinton directed Secretary 
     Daley ``to work with the private sector, State and local 
     governments, and foreign governments to support the 
     development, both domestically and internationally, of a 
     uniform commercial legal framework that recognizes, 
     facilitates, and enforces electronic transactions 
     worldwide.''
       Since July 1997, we have been consulting with countries to 
     encourage their adoption of an approach to electronic 
     authentication that will assure parties that their 
     transactions will be recognized and enforced globally. Under 
     this approach, countries would: (1) eliminate paper-based 
     legal barriers to electronic transactions by implementing the 
     relevant provisions of the 1996 UNCITRAL Model Law on 
     Electronic Commerce; (2) reaffirm the rights of parties to 
     determine for themselves the appropriate technological means 
     of authenticating their transactions;

[[Page 17468]]

     (3) ensure any party the opportunity to prove in court that a 
     particular authentication technique is sufficient to create a 
     legally binding agreement; and (4) state that governments 
     should treat technologies and providers of authentication 
     services from other countries in a non-discriminatory manner.
       The principles set out in section 5 of S. 761 mirror those 
     advocated by the Administration in international fora, and we 
     support their adoption in federal legislation. In October 
     1998, the OECD Ministers approved a Declaration on 
     Authentication for Electronic Commerce affirming these 
     principles. In addition, these principles have also been 
     incorporated into joint statements between the United States 
     and Japan, Australia, France, the United Kingdom and South 
     Korea. Congressional endorsement of the principles would 
     greatly assist in developing the full potential of electronic 
     commerce as was envisioned by the President and Vice 
     President Gore in The Framework for Global Electronic 
     Commerce.
       On the domestic front, the National Conference of 
     Commissioners of Uniform State Law (NCCUSL) has been working 
     since early 1997 to craft a uniform law for consideration by 
     State legislatures that would adapt standards governing 
     private commercial transactions to cyberspace. This model law 
     is entitled the ``Uniform Electronic Transactions Act'' 
     (UETA), and I understand that it will receive final 
     consideration at the NCCUSL Annual Meeting at the end of 
     July. In the view of the Administration, the current UETA 
     draft adheres to the minimalist ``enabling'' framework 
     advocated by the Administration, and we believe that UETA 
     will provide an excellent domestic legal model for electronic 
     transactions, as well as a strong model for the rest of the 
     world.
       Section 6 of the substitute (``Interstate Contract 
     Certainty'') addresses the concern that several years will 
     elapse before the UETA is enacted by the states. It fills 
     that gap temporarily with federal legal standards, but 
     ultimately leaves the issue to be resolved by each state as 
     it considers the UETA.
       With regard to commercial transactions affecting interstate 
     commerce, this section eliminates statutory rules requiring 
     paper contracts, recognizes the validity of electronic 
     signatures as a substitute for paper signatures, and provides 
     that parties may decide for themselves, should they so 
     choose, what method of electronic signature to use.
       Another important aspect of the substitute is that it would 
     provide for the termination of any federal preemption as to 
     the law of any state that adopts the UETA (including any of 
     the variations that the UETA may allow) and maintains it in 
     effect. We note that this provision would impose no 
     overarching requirement that the UETA or individual state 
     laws be ``consistent'' with the specific terms of this Act; 
     this provision, and its potential effect, will be closely 
     monitored by the Administration as the legislation 
     progresses. There is every reason to believe that the States 
     will continue to move, as they consistently have moved, 
     toward adopting and maintaining an ``enabling'' approach to 
     electronic commerce consistent with the principles stated in 
     this Act. We therefore believe that any preemption that may 
     ultimately result from this legislation can safely be allowed 
     to ``sunset'' for any state upon its adoption of the eventual 
     uniform electronic transactions legislation developed by the 
     states.
       We also support limiting the scope of this Act to 
     commercial transactions, which is consistent with the current 
     approach of the draft UETA, and utilizing definitions in the 
     Act that mirror those of the current draft UETA, which we 
     consider appropriate in light of the expert effort that has 
     been directed to the development of the UETA provisions under 
     the procedures of NCCUSL.
       With regard to section 7(a), the Administration requests 
     that the Committee delete the reference to the Office of 
     Management and Budget (``OMB''); there is no need for 
     agencies to file duplicate reports. The report that the 
     Secretary of Commerce is directed to prepare pursuant to 
     section 7(b) will, of course, be coordinated with OMB.
       The substitute version of S. 761 would in our view provide 
     an excellent framework for the speedy development of uniform 
     electronic transactions legislation in an environment of 
     partnership between the Federal Government and the states. We 
     look forward to working with the Committee on the bill as it 
     proceeds through the legislative process.
       The Office of Management and Budget advises that there is 
     no objection to the transmittal of this report from the 
     standpoint of the Administration's program.
           Sincerely,
                                                 Andrew J. Pincus.

  Mr. LOTT. Mr. President, the Millennium Digital Commerce Act provides 
a baseline national framework for conducting online business to 
business transactions. It is vital to interstate electronic commerce 
because it would provide legal standing for electronic signatures on 
contracts and other business transactions.
  This common sense and timely legislation will help promote continued 
growth in electronic commerce. It is good for business, consumers, and 
the overall American economy.
  While more than forty States have laws on the books concerning the 
use of authentication technology such as electronic signatures, the 
States have not yet chosen to adopt the same approach. This hodgepodge 
of State laws will undoubtedly have a chilling effect on e-commerce.
  This Congress cannot and should not sit by and wait until the States 
coordinate this milieu of laws on electronic signatures. This delay 
would unnecessarily restrain the growth of our Nation's economic well-
being.
  The Millennium Digital Commerce Act is an interim step that will help 
facilitate interstate and international commerce. It is a necessary 
precursor to state-by-state adoption of the Uniform Electronic 
Transactions Act (UETA).
  Mr. President, my colleagues on both sides of the aisle strongly 
agree that it is now time to move S. 761 to the floor.
  It has broad support and I hope we can work together to move this 
bipartisan pro-technology, pro-electronic commerce legislation forward 
as soon as possible.

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