[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[House]
[Pages 1310-1314]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    MILLENNIUM DIGITAL COMMERCE ACT

  Mr. BLILEY. Mr. Speaker, I ask unanimous consent to take from the 
Speaker's table 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 other purposes, and ask for its immediate 
consideration in the House.
  The Clerk read the title of the Senate bill.
  The SPEAKER pro tempore (Mr. Sununu). Is there objection to the 
request of the gentleman from Virginia?
  There was no objection.
  The Clerk read the Senate bill, as follows:

                                 S. 761

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Millennium Digital Commerce 
     Act''.

     SEC. 2. FINDINGS.

       The Congress makes the following findings:
       (1) The growth of electronic commerce and electronic 
     government transactions represent a powerful force for 
     economic growth, consumer choice, improved civic 
     participation and wealth creation.
       (2) The promotion of growth in private sector electronic 
     commerce through Federal legislation is in the national 
     interest because that market is globally important to the 
     United States.
       (3) A consistent legal foundation, across multiple 
     jurisdictions, for electronic commerce will promote the 
     growth of such transactions, and that such a foundation 
     should

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     be based upon a simple, technology neutral, nonregulatory, 
     and market-based approach.
       (4) The Nation and the world stand at the beginning of a 
     large scale transition to an information society which will 
     require innovative legal and policy approaches, and 
     therefore, States can serve the national interest by 
     continuing their proven role as laboratories of innovation 
     for quickly evolving areas of public policy, provided that 
     States also adopt a consistent, reasonable national baseline 
     to eliminate obsolete barriers to electronic commerce such as 
     undue paper and pen requirements, and further, that any such 
     innovation should not unduly burden inter-jurisdictional 
     commerce.
       (5) To the extent State laws or regulations do not provide 
     a consistent, reasonable national baseline or in fact create 
     an undue burden to interstate commerce in the important 
     burgeoning area of electronic commerce, the national interest 
     is best served by Federal preemption to the extent necessary 
     to provide such consistent, reasonable national baseline or 
     eliminate said burden, but that absent such lack of 
     consistent, reasonable national baseline or such undue 
     burdens, the best legal system for electronic commerce will 
     result from continuing experimentation by individual 
     jurisdictions.
       (6) With due regard to the fundamental need for a 
     consistent national baseline, each jurisdiction that enacts 
     such laws should have the right to determine the need for any 
     exceptions to protect consumers and maintain consistency with 
     existing related bodies of law within a particular 
     jurisdiction.
       (7) Industry has developed several electronic signature 
     technologies for use in electronic transactions, and the 
     public policies of the United States should serve to promote 
     a dynamic marketplace within which these technologies can 
     compete. Consistent with this Act, States should permit the 
     use and development of any authentication technologies that 
     are appropriate as practicable as between private parties and 
     in use with State agencies.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to permit and encourage the continued expansion of 
     electronic commerce through the operation of free market 
     forces rather than proscriptive governmental mandates and 
     regulations;
       (2) to promote public confidence in the validity, integrity 
     and reliability of electronic commerce and online government 
     under Federal law;
       (3) to facilitate and promote electronic commerce by 
     clarifying the legal status of electronic records and 
     electronic signatures in the context of contract formation;
       (4) to facilitate the ability of private parties engaged in 
     interstate transactions to agree among themselves on the 
     appropriate electronic signature technologies for their 
     transactions; and
       (5) to promote the development of a consistent national 
     legal infrastructure necessary to support electronic commerce 
     at the Federal and State levels within existing areas of 
     jurisdiction.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Electronic.--The term ``electronic'' means relating to 
     technology having electrical, digital, magnetic, wireless, 
     optical, electromagnetic, or similar capabilities.
       (2) Electronic agent.--The term ``electronic agent'' means 
     a computer program or an electronic or other automated means 
     used to initiate an action or respond to electronic records 
     or performances in whole or in part without review by an 
     individual at the time of the action or response.
       (3) Electronic record.--The term ``electronic record'' 
     means a record created, generated, sent, communicated, 
     received, or stored by electronic means.
       (4) Electronic signature.--The term ``electronic 
     signature'' means an electronic sound, symbol, or process 
     attached to or logically associated with a record and 
     executed or adopted by a person with the intent to sign the 
     record.
       (5) Governmental agency.--The term ``governmental agency'' 
     means an executive, legislative, or judicial agency, 
     department, board, commission, authority, or institution of 
     the Federal Government or of a State or of any county, 
     municipality, or other political subdivision of a State.
       (6) Record.--The term ``record'' means information that is 
     inscribed on a tangible medium or that is stored in an 
     electronic or other medium and is retrievable in perceivable 
     form.
       (7) Transaction.--The term ``transaction'' means an action 
     or set of actions relating to the conduct of commerce, 
     between 2 or more persons, neither of which is the United 
     States Government, a State, or an agency, department, board, 
     commission, authority, or institution of the United States 
     Government or of a State.
       (8) Uniform electronic transactions act.--The term 
     ``Uniform Electronic Transactions Act'' means the Uniform 
     Electronic Transactions Act as provided to State legislatures 
     by the National Conference of Commissioners on Uniform State 
     Law in that form or any substantially similar variation 
     thereof.

     SEC. 5. INTERSTATE CONTRACT CERTAINTY.

       (a) In General.--In any commercial transaction affecting 
     interstate commerce, a contract may not be denied legal 
     effect or enforceability solely because an electronic 
     signature or electronic record was used in its formation.
       (b) Methods.--Parties to a transaction are permitted to 
     determine the appropriate electronic signature technologies 
     for their transaction, and the means of implementing such 
     technologies.
       (c) Presentation of Contracts.--Notwithstanding subsection 
     (a), if a law requires that a contract be in writing, the 
     legal effect or enforceability of an electronic record of 
     such contract shall be denied under such law, unless it is 
     delivered to all parties to such contract in a form that--
       (1) can be retained by the parties for later reference; and
       (2) can be used to prove the terms of the agreement.
       (d) Specific Exclusions.--The provisions of this section 
     shall not apply to a statute, regulation, or other rule of 
     law governing any of the following:
       (1) The Uniform Commercial Code, as in effect in a State, 
     other than sections 1-107 and 1-206, Article 2, and Article 
     2A.
       (2) Premarital agreements, marriage, adoption, divorce or 
     other matters of family law.
       (3) Documents of title which are filed of record with a 
     governmental unit until such time that a State or subdivision 
     thereof chooses to accept filings electronically.
       (4) Residential landlord-tenant relationships.
       (5) The Uniform Health-Care Decisions Act as in effect in a 
     State.
       (e) Electronic Agents.--A contract relating to a commercial 
     transaction affecting interstate commerce may not be denied 
     legal effect or enforceability solely because its formation 
     involved--
       (1) the interaction of electronic agents of the parties; or
       (2) the interaction of an electronic agent of a party and 
     an individual who acts on that individual's own behalf or as 
     an agent for another person.
       (f) Insurance.--It is the specific intent of the Congress 
     that this section apply to the business of insurance.
       (g) Application in UETA States.--This section does not 
     apply in any State in which the Uniform Electronic 
     Transactions Act is in effect.

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

       To the extent practicable, the Federal Government shall 
     observe the following principles in an international context 
     to enable commercial electronic transaction:
       (1) Remove paper-based obstacles to electronic transactions 
     by adopting relevant principles from the Model Law on 
     Electronic Commerce adopted in 1996 by the United Nations 
     Commission on International Trade Law.
       (2) Permit parties to a transaction to determine the 
     appropriate authentication technologies and implementation 
     models for their transactions, with assurance that those 
     technologies and implementation models will be recognized and 
     enforced.
       (3) Permit parties to a transaction to have the opportunity 
     to prove in court or other proceedings that their 
     authentication approaches and their transactions are valid.
       (4) Take a nondiscriminatory approach to electronic 
     signatures and authentication methods from other 
     jurisdictions.

     SEC. 7. STUDY OF LEGAL AND REGULATORY BARRIERS TO ELECTRONIC 
                   COMMERCE.

       (a) Barriers.--Each Federal agency shall, not later than 6 
     months after the date of enactment of this Act, provide a 
     report to the Director of the Office of Management and Budget 
     and the Secretary of Commerce identifying any provision of 
     law administered by such agency, or any regulations issued by 
     such agency and in effect on the date of enactment of this 
     Act, that may impose a barrier to electronic transactions, or 
     otherwise to the conduct of commerce online or by electronic 
     means, including barriers imposed by a law or regulation 
     directly or indirectly requiring that signatures, or records 
     of transactions, be accomplished or retained in other than 
     electronic form. In its report, each agency shall identify 
     the barriers among those identified whose removal would 
     require legislative action, and shall indicate agency plans 
     to undertake regulatory action to remove such barriers among 
     those identified as are caused by regulations issued by the 
     agency.
       (b) Report to Congress.--The Secretary of Commerce, in 
     consultation with the Director of the Office of Management 
     and Budget, shall, within 18 months after the date of 
     enactment of this Act, and after the consultation required by 
     subsection (c) of this section, report to the Congress 
     concerning--
       (1) legislation needed to remove barriers to electronic 
     transactions or otherwise to the conduct of commerce online 
     or by electronic means; and
       (2) actions being taken by the Executive Branch and 
     individual Federal agencies to remove such barriers as are 
     caused by agency regulations or policies.
       (c) Consultation.--In preparing the report required by this 
     section, the Secretary of Commerce shall consult with the 
     General Services Administration, the National Archives and 
     Records Administration, and the

[[Page 1312]]

     Attorney General concerning matters involving the 
     authenticity of records, their storage and retention, and 
     their usability for law enforcement purposes.
       (d) Include Findings if No Recommendations.--If the report 
     required by this section omits recommendations for actions 
     needed to fully remove identified barriers to electronic 
     transactions or to online or electronic commerce, it shall 
     include a finding or findings, including substantial reasons 
     therefor, that such removal is impracticable or would be 
     inconsistent with the implementation or enforcement of 
     applicable laws.


                      Motion Offered by Mr. Bliley

  Mr. BLILEY. Mr. Speaker, I offer a motion.
  The Clerk read as follows:

       Mr. Bliley moves to strike all after the enacting clause of 
     S. 761 and insert in lieu thereof the text of H.R. 1714, as 
     passed by the House, as follows:

                               H.R. 1714

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Electronic Signatures in 
     Global and National Commerce Act''.

  TITLE I--VALIDITY OF ELECTRONIC RECORDS AND SIGNATURES FOR COMMERCE

     SEC. 101. GENERAL RULE OF VALIDITY.

       (a) General Rule.--With respect to any contract, agreement, 
     or record entered into or provided in, or affecting, 
     interstate or foreign commerce, notwithstanding any statute, 
     regulation, or other rule of law, the legal effect, validity, 
     or enforceability of such contract, agreement, or record 
     shall not be denied--
       (1) on the ground that the contract, agreement, or record 
     is not in writing if the contract, agreement, or record is an 
     electronic record; or
       (2) on the ground that the contract, agreement, or record 
     is not signed or is not affirmed by a signature if the 
     contract, agreement, or record is signed or affirmed by an 
     electronic signature.
       (b) Autonomy of Parties in Commerce.--
       (1) In general.--With respect to any contract, agreement, 
     or record entered into or provided in, or affecting, 
     interstate or foreign commerce--
       (A) the parties to such contract, agreement, or record may 
     establish procedures or requirements regarding the use and 
     acceptance of electronic records and electronic signatures 
     acceptable to such parties;
       (B) the legal effect, validity, or enforceability of such 
     contract, agreement, or record shall not be denied because of 
     the type or method of electronic record or electronic 
     signature selected by the parties in establishing such 
     procedures or requirements; and
       (C) nothing in this section requires any party to use or 
     accept electronic records or electronic signatures.
       (2) Consent to electronic records.--Notwithstanding 
     subsection (a) and paragraph (1) of this subsection--
       (A) if a statute, regulation, or other rule of law requires 
     that a record be provided or made available to a consumer in 
     writing, that requirement shall be satisfied by an electronic 
     record if--
       (i) the consumer has affirmatively consented, by means of a 
     consent that is conspicuous and visually separate from other 
     terms, to the provision or availability (whichever is 
     required) of such record (or identified groups of records 
     that include such record) as an electronic record, and has 
     not withdrawn such consent;
       (ii) prior to consenting, the consumer is provided with a 
     statement of the hardware and software requirements for 
     access to and retention of electronic records; and
       (iii) the consumer affirmatively acknowledges, by means of 
     an acknowledgement that is conspicuous and visually separate 
     from other terms, that--

       (I) the consumer has an obligation to notify the provider 
     of electronic records of any change in the consumer's 
     electronic mail address or other location to which the 
     electronic records may be provided; and
       (II) if the consumer withdraws consent, the consumer has 
     the obligation to notify the provider to notify the provider 
     of electronic records of the electronic mail address or other 
     location to which the records may be provided; and

       (B) the record is capable of review, retention, and 
     printing by the recipient if accessed using the hardware and 
     software specified in the statement under subparagraph 
     (A)(ii) at the time of the consumer's consent; and
       (C) if such statute, regulation, or other rule of law 
     requires that a record be retained, that requirement shall be 
     satisfied if such record complies with the requirements of 
     subparagraphs (A) and (B) of subsection (c)(1).
       (c) Retention of Contracts, Agreements, and Records.--
       (1) Accuracy and accessibility.--If a statute, regulation, 
     or other rule of law requires that a contract, agreement, or 
     record be in writing or be retained, that requirement is met 
     by retaining an electronic record of the information in the 
     contract, agreement, or record that--
       (A) accurately reflects the information set forth in the 
     contract, agreement, or record after it was first generated 
     in its final form as an electronic record; and
       (B) remains accessible, for the period required by such 
     statute, regulation, or rule of law, for later reference, 
     transmission, and printing.
       (2) Exception.--A requirement to retain a contract, 
     agreement, or record in accordance with paragraph (1) does 
     not apply to any information whose sole purpose is to enable 
     the contract, agreement, or record to be sent, communicated, 
     or received.
       (3) Originals.--If a statute, regulation, or other rule of 
     law requires a contract, agreement, or record to be provided, 
     available, or retained in its original form, or provides 
     consequences if the contract, agreement, or record is not 
     provided, available, or retained in its original form, that 
     statute, regulation, or rule of law is satisfied by an 
     electronic record that complies with paragraph (1).
       (4) Checks.--If a statute, regulation, or other rule of law 
     requires the retention of a check, that requirement is 
     satisfied by retention of an electronic record of all the 
     information on the front and back of the check in accordance 
     with paragraph (1).
       (d) Ability to Contest Signatures and Charges.--Nothing in 
     this section shall be construed to limit or otherwise affect 
     the rights of any person to assert that an electronic 
     signature is a forgery, is used without authority, or 
     otherwise is invalid for reasons that would invalidate the 
     effect of a signature in written form. The use or acceptance 
     of an electronic record or electronic signature by a consumer 
     shall not constitute a waiver of any substantive protections 
     afforded consumers under the Consumer Credit Protection Act.
       (e) Scope.--This Act is intended to clarify the legal 
     status of electronic records and electronic signatures in the 
     context of writing and signing requirements imposed by law. 
     Nothing in this Act affects the content or timing of any 
     disclosure required to be provided to any consumer under any 
     statute, regulation, or other rule of law.

     SEC. 102. AUTHORITY TO ALTER OR SUPERSEDE GENERAL RULE.

       (a) Procedure To Alter or Supersede.--Except as provided in 
     subsection (b), a State statute, regulation, or other rule of 
     law may modify, limit, or supersede the provisions of section 
     101 if such statute, regulation, or rule of law--
       (1)(A) constitutes an enactment or adoption of the Uniform 
     Electronic Transactions Act as reported to the State 
     legislatures by the National Conference of Commissioners on 
     Uniform State Laws; or
       (B) specifies the alternative procedures or requirements 
     for the use or acceptance (or both) of electronic records or 
     electronic signatures to establish the legal effect, 
     validity, or enforceability of contracts, agreements, or 
     records; and
       (2) if enacted or adopted after the date of the enactment 
     of this Act, makes specific reference to this Act.
       (b) Limitations on Alteration or Supersession.--A State 
     statute, regulation, or other rule of law (including an 
     insurance statute, regulation, or other rule of law), 
     regardless of its date of the enactment or adoption, that 
     modifies, limits, or supersedes section 101 shall not be 
     effective to the extent that such statute, regulation, or 
     rule--
       (1) discriminates in favor of or against a specific 
     technology, process, or technique of creating, storing, 
     generating, receiving, communicating, or authenticating 
     electronic records or electronic signatures;
       (2) discriminates in favor of or against a specific type or 
     size of entity engaged in the business of facilitating the 
     use of electronic records or electronic signatures;
       (3) is based on procedures or requirements that are not 
     specific or that are not publicly available; or
       (4) is otherwise inconsistent with the provisions of this 
     title.
       (c) Exception.--Notwithstanding subsection (b), a State 
     may, by statute, regulation, or rule of law enacted or 
     adopted after the date of the 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.

     SEC. 103. SPECIFIC EXCLUSIONS.

       (a) Excepted Requirements.--The provisions of section 101 
     shall not apply to a contract, agreement, or record to the 
     extent it is governed by--
       (1) a statute, regulation, or other rule of law governing 
     the creation and execution of wills, codicils, or 
     testamentary trusts;
       (2) a 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;
       (4) any requirement by a Federal regulatory agency or self-
     regulatory organization that records be filed or maintained 
     in a specified standard or standards (including a specified 
     format or formats), except that nothing

[[Page 1313]]

     in this paragraph relieves any Federal regulatory agency of 
     its obligations 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.
       (b) Additional Exceptions.--The provisions of section 101 
     shall not apply to--
       (1) any contract, agreement, or record entered into 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, pleadings, 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 
     (including water, heat, and power);
       (B) default, acceleration, repossession, foreclosure, or 
     eviction, or the right to cure, under a credit agreement 
     secured by, or a rental agreement for, a primary residence of 
     an individual; or
       (C) the cancellation or termination of health insurance or 
     benefits or life insurance benefits (excluding annuities).

     SEC. 104. STUDY.

       (a) Followup Study.--Within 5 years after the date of the 
     enactment of this Act, the Secretary of Commerce, acting 
     through the Assistant Secretary for Communications and 
     Information, shall conduct an inquiry regarding any State 
     statutes, regulations, or other rules of law enacted or 
     adopted after such date of the enactment pursuant to section 
     102(a), and the extent to which such statutes, regulations, 
     and rules comply with section 102(b).
       (b) Report.--The Secretary shall submit a report to the 
     Congress regarding the results of such inquiry by the 
     conclusion of such 5-year period.
       (c) Additional Study of Delivery.--Within 18 months after 
     the date of the enactment of this Act, the Secretary of 
     Commerce shall conduct an inquiry regarding the effectiveness 
     of the delivery of electronic records to consumers using 
     electronic mail as compared with delivery of written records 
     via the United States Postal Service and private express mail 
     services. The Secretary shall submit a report to the Congress 
     regarding the results of such inquiry by the conclusion of 
     such 18-month period.

     SEC. 105. DEFINITIONS.

       For purposes of this title:
       (1) Electronic record.--The term ``electronic record'' 
     means a writing, document, or other record created, stored, 
     generated, received, or communicated by electronic means.
       (2) Electronic signature.--The term ``electronic 
     signature'' means information or data in electronic form, 
     attached to or logically associated with an electronic 
     record, and executed or adopted by a person or an electronic 
     agent of a person, with the intent to sign a contract, 
     agreement, or record.
       (3) Electronic.--The term ``electronic'' means of or 
     relating to technology having electrical, digital, magnetic, 
     optical, electromagnetic, or similar capabilities regardless 
     of medium.
       (4) Electronic agent.--The term ``electronic agent'' means 
     a computer program or an electronic or other automated means 
     used independently to initiate an action or respond to 
     electronic records in whole or in part without review by an 
     individual at the time of the action or response.
       (5) Record.--The term ``record'' means information that is 
     inscribed on a tangible medium or that is stored in an 
     electronic or other medium and is retrievable in perceivable 
     form.
       (6) Federal regulatory agency.--The term ``Federal 
     regulatory agency'' means an agency, as that term is defined 
     in section 552(f) of title 5, United States Code, that is 
     authorized by Federal law to impose requirements by rule, 
     regulation, order, or other legal instrument.
       (7) Self-regulatory organization.--The term ``self-
     regulatory organization'' means an organization or entity 
     that is not a Federal regulatory agency or a State, but that 
     is under the supervision of a Federal regulatory agency and 
     is authorized under Federal law to adopt and administer rules 
     applicable to its members that are enforced by such 
     organization or entity, by a Federal regulatory agency, or by 
     another self-regulatory organization.

TITLE II--DEVELOPMENT AND ADOPTION OF ELECTRONIC SIGNATURE PRODUCTS AND 
                                SERVICES

     SEC. 201. TREATMENT OF ELECTRONIC SIGNATURES IN INTERSTATE 
                   AND FOREIGN COMMERCE.

       (a) Inquiry Regarding Impediments to Commerce.--
       (1) Inquiries required.--Within 180 days after the date of 
     the enactment of this Act, and biennially thereafter, the 
     Secretary of Commerce, acting through the Assistant Secretary 
     for Communications and Information, shall complete an inquiry 
     to--
       (A) identify any domestic and foreign impediments to 
     commerce in electronic signature products and services and 
     the manners in which and extent to which such impediments 
     inhibit the development of interstate and foreign commerce;
       (B) identify constraints imposed by foreign nations or 
     international organizations that constitute barriers to 
     providers of electronic signature products or services; and
       (C) identify the degree to which other nations and 
     international organizations are complying with the principles 
     in subsection (b)(2).
       (2) Submission.--The Secretary shall submit a report to the 
     Congress regarding the results of each such inquiry within 90 
     days after the conclusion of such inquiry. Such report shall 
     include a description of the actions taken by the Secretary 
     pursuant to subsection (b) of this section.
       (b) Promotion of Electronic Signatures.--
       (1) Required actions.--The Secretary of Commerce, acting 
     through the Assistant Secretary for Communications and 
     Information, shall promote the acceptance and use, on an 
     international basis, of electronic signatures in accordance 
     with the principles specified in paragraph (2) and in a 
     manner consistent with section 101 of this Act. The Secretary 
     of Commerce shall take all actions necessary in a manner 
     consistent with such principles to eliminate or reduce, to 
     the maximum extent possible, the impediments to commerce in 
     electronic signatures, including those identified in the 
     inquiries under subsection (a) for the purpose of 
     facilitating the development of interstate and foreign 
     commerce.
       (2) Principles.--The principles specified in this paragraph 
     are the following:
       (A) Free markets and self-regulation, rather than 
     Government standard-setting or rules, should govern the 
     development and use of electronic records and electronic 
     signatures.
       (B) Neutrality and nondiscrimination should be observed 
     among providers of and technologies for electronic records 
     and electronic signatures.
       (C) Parties to a transaction should be permitted to 
     establish requirements regarding the use of electronic 
     records and electronic signatures acceptable to such parties.
       (D) Parties to a transaction--
       (i) should be permitted to determine the appropriate 
     authentication technologies and implementation models for 
     their transactions, with assurance that those technologies 
     and implementation models will be recognized and enforced; 
     and
       (ii) should have the opportunity to prove in court or other 
     proceedings that their authentication approaches and their 
     transactions are valid.
       (E) Electronic records and electronic signatures in a form 
     acceptable to the parties should not be denied legal effect, 
     validity, or enforceability on the ground that they are not 
     in writing.
       (F) De jure or de facto imposition of standards on private 
     industry through foreign adoption of regulations or policies 
     with respect to electronic records and electronic signatures 
     should be avoided.
       (G) Paper-based obstacles to electronic transactions should 
     be removed.
       (c) Consultation.--In conducting the activities required by 
     this section, the Secretary shall consult with users and 
     providers of electronic signature products and services and 
     other interested persons.
       (d) Privacy.--Nothing in this section shall be construed to 
     require the Secretary or the Assistant Secretary to take any 
     action that would adversely affect the privacy of consumers.
       (e) Definitions.--As used in this section, the terms 
     ``electronic record'' and ``electronic signature'' have the 
     meanings provided in section 104 of the Electronic Signatures 
     in Global and National Commerce Act.

   TITLE III--USE OF ELECTRONIC RECORDS AND SIGNATURES UNDER FEDERAL 
                             SECURITIES LAW

     SEC. 301. GENERAL VALIDITY OF ELECTRONIC RECORDS AND 
                   SIGNATURES.

       Section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78c) is amended by adding at the end the following new 
     subsection:
       ``(h) References to Written Records and Signatures.--
       ``(1) General validity of electronic records and 
     signatures.--Except as otherwise provided in this 
     subsection--
       ``(A) if a contract, agreement, or record (as defined in 
     subsection (a)(37)) is required by the securities laws or any 
     rule or regulation thereunder (including a rule or regulation 
     of a self-regulatory organization), and is required by 
     Federal or State statute, regulation, or other rule of law to 
     be in writing, the legal effect, validity, or enforceability 
     of such contract, agreement, or record shall not be denied on 
     the ground that the contract, agreement, or record is not in 
     writing if the contract, agreement, or record is an 
     electronic record;
       ``(B) if a contract, agreement, or record is required by 
     the securities laws or any rule or regulation thereunder 
     (including a rule or regulation of a self-regulatory 
     organization), and is required by Federal or State statute, 
     regulation, or other rule of law to be signed, the legal 
     effect, validity, or enforceability of such contract, 
     agreement, or record shall not be denied on the ground that 
     such contract, agreement, or record is not signed or is not 
     affirmed by a signature if the contract, agreement, or record 
     is signed or affirmed by an electronic signature; and
       ``(C) if a broker, dealer, transfer agent, investment 
     adviser, or investment company

[[Page 1314]]

     enters into a contract or agreement with, or accepts a record 
     from, a customer or other counterparty, such broker, dealer, 
     transfer agent, investment adviser, or investment company may 
     accept and rely upon an electronic signature on such 
     contract, agreement, or record, and such electronic signature 
     shall not be denied legal effect, validity, or enforceability 
     because it is an electronic signature.
       ``(2) Implementation.--
       ``(A) Regulations.--The Commission may prescribe such 
     regulations as may be necessary to carry out this subsection 
     consistent with the public interest and the protection of 
     investors.
       ``(B) Nondiscrimination.--The regulations prescribed by the 
     Commission under subparagraph (A) shall not--
       ``(i) discriminate in favor of or against a specific 
     technology, method, or technique of creating, storing, 
     generating, receiving, communicating, or authenticating 
     electronic records or electronic signatures; or
       ``(ii) discriminate in favor of or against a specific type 
     or size of entity engaged in the business of facilitating the 
     use of electronic records or electronic signatures.
       ``(3) Exceptions.--Notwithstanding any other provision of 
     this subsection--
       ``(A) the Commission, an appropriate regulatory agency, or 
     a self-regulatory organization may require that records be 
     filed or maintained in a specified standard or standards 
     (including a specified format or formats) if the records are 
     required to be submitted to the Commission, an appropriate 
     regulatory agency, or a self-regulatory organization, 
     respectively, or are required by the Commission, an 
     appropriate regulatory agency, or a self-regulatory 
     organization to be retained; and
       ``(B) the Commission may require that contracts, 
     agreements, or records relating to purchases and sales, or 
     establishing accounts for conducting purchases and sales, of 
     penny stocks be manually signed, and may require such manual 
     signatures with respect to transactions in similar securities 
     if the Commission determines that such securities are 
     susceptible to fraud and that such fraud would be deterred or 
     prevented by requiring manual signatures.
       ``(4) Relation to other law.--The provisions of this 
     subsection apply in lieu of the provisions of title I of the 
     Electronic Signatures in Global and National Commerce Act to 
     a contract, agreement, or record (as defined in subsection 
     (a)(37)) that is required by the securities laws.
       ``(5) Savings provision.--Nothing in this subsection 
     applies to any rule or regulation under the securities laws 
     (including a rule or regulation of a self-regulatory 
     organization) that is in effect on the date of the enactment 
     of the Electronic Signatures in Global and National Commerce 
     Act and that requires a contract, agreement, or record to be 
     in writing, to be submitted or retained in original form, or 
     to be in a specified standard or standards (including a 
     specified format or formats).
       ``(6) Definitions.--As used in this subsection:
       ``(A) Electronic record.--The term `electronic record' 
     means a writing, document, or other record created, stored, 
     generated, received, or communicated by electronic means.
       ``(B) Electronic signature.--The term ``electronic 
     signature'' means information or data in electronic form, 
     attached to or logically associated with an electronic 
     record, and executed or adopted by a person or an electronic 
     agent of a person, with the intent to sign a contract, 
     agreement, or record.
       ``(C) Electronic.--The term `electronic' means of or 
     relating to technology having electrical, digital, magnetic, 
     optical, electromagnetic, or similar capabilities regardless 
     of medium.''.

  The motion was agreed to.
  The Senate bill was ordered to be read a third time, was read the 
third time, and passed.
  The title of the Senate bill was amended so as to read: ``To 
facilitate the use of electronic records and signatures in interstate 
or foreign commerce.''.
  A motion to reconsider was laid on the table.


                        Appointment of Conferees

  Mr. BLILEY. Mr. Speaker, I ask unanimous consent that the House 
insist on its amendment to S. 761 and request a conference with the 
Senate thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia? The Chair hears none, and without objection 
appoints the following conferees on S. 761: Messrs. Bliley, Tauzin, 
Oxley, Dingell, and Markey.
  There was no objection.

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