[Congressional Record (Bound Edition), Volume 146 (2000), Part 8]
[Senate]
[Pages 10960-10976]
[From the U.S. Government Publishing Office, www.gpo.gov]



 ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT--CONFERENCE 
                                 REPORT

  The PRESIDING OFFICER. Under the previous order, the conference 
report will be stated.
  The assistant legislative clerk read as follows:

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendments of the House to the bill (S. 
     761), to regulate interstate commerce by electronic means by 
     permitting and encouraging the continued expansion of 
     electronic commerce through the operation of free market 
     forces, and for other purposes, having met, after full and 
     free conference, have agreed that to recommend and do 
     recommend to their respective Houses this report, signed by a 
     majority of the conferees.

  The PRESIDING OFFICER. The Senate will proceed to the consideration 
of the conference report.
  (The conference report is printed in the House proceedings at pages 
H4115-18 of the Record of June 8, 2000.)
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I yield 2 minutes to the Senator from 
Massachusetts.
  Mr. KERRY. Mr. President, I promised I would not go in front of 
Senator Wyden.
  I yield to the Senator from Oregon.
  Mr. McCAIN. How long does the Senator from Oregon need?
  Mr. WYDEN. I was contemplating speaking about 5 minutes. But, again, 
I do not want to inconvenience my colleagues.
  Mr. McCAIN. I yield 5 minutes to the Senator from Oregon, followed by 
2 minutes to the Senator from Massachusetts, and then those of us on 
the beleaguered majority will have our say.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Mr. President, the conference agreement on digital 
signatures that is going to be overwhelmingly approved tomorrow morning 
may be the big sleeper of this Congress, but it certainly was not the 
``big easy.''
  The fact of the matter is, when we started on this in March of 1999, 
Senator Abraham and I envisioned a fairly simple interim bill. We were 
looking at electronic signatures to make sure that in the online world, 
when you sent an electronic signature, it would carry the same legal 
weight as a ``John Hancock'' in the offline world.
  But as we prepared--after this passed the Commerce Committee--to move 
forward with a pretty innocuous bill, the financial services and 
insurance industries came to us with what we thought was a very 
important and thoughtful concept; and that was to revolutionize e-
commerce, to go beyond establishing the legal validity of e-signatures 
to include electronic records, keeping important records 
electronically. We were told by industry--and correctly so--that this 
would give America a chance to save billions and billions of dollars 
and thousands of hours, as our companies chose to spend their funds on 
matters other than paper recordkeeping.
  At the same time, the consumer groups that sought this proposal were 
extremely frightened. They saw this as an opportunity for unscrupulous 
individuals to come on in and rip off senior citizens, to foreclose on 
people's homes, to cut off health insurance, and things of that nature, 
by just perhaps an e-mail into cyberspace.
  Chairman McCain is here. This is truly a bipartisan effort in every 
respect. I had a chance to work with my senior colleagues on this side, 
Senator Leahy, Senator Hollings, Senator Sarbanes, and our friend 
Senator Kerry, who is here. And let me tell you, it ultimately took 
three Senate committees 8 months and thousands of hours to get it done. 
We had to bring together key principles of what is known as the old 
economy, such as consumer protection and informed consent, and fuse 
them together with the principles of the new economy and the online 
world, and the chance to save time and money through electronic records 
and electronic signatures.
  What we tried to say, on this side of the aisle, and what we were 
able to get a bipartisan agreement around, is the proposition that 
consumer rights are not virtual rights. We have to make sure--and we 
have it in this legislation--that the protections that apply

[[Page 10961]]

offline would apply online. We were able to do it without enduring all 
kinds of unnecessary redtape and bureaucracy. I wanted the bill to 
unleash the potential of electronic signatures and records for industry 
without shattering a cornerstone of American commerce: the right of 
individual consumers to have meaningful and informed consent and to 
keep accurate records of their contracts and transactions.
  I believe the conference agreement before the Senate has met the 
challenge of protecting consumer rights in the new economy.
  Consumer rights are not virtual rights. Consumers must enjoy the same 
basic rights in the online world as they have in the off-line world. 
Through the electronic consumer consent provision in Section 101(c) 
that I authored with Senators Leahy, Hollings and Sarbanes, I believe 
we have adequately translated offline consumer protections into online 
consumer protections.
  Let me just spend a minute describing this key provision of the 
conference agreement. This provision requires that consumer consent 
must be meaningful. We all know of cases where someone said, ``Just e-
mail me that document,'' only to have that person call later, saying 
``Gee, I couldn't open the document, can you fax it to me?'' I can't 
recall how many times this exact thing happened to our own staff during 
the negotiation of this agreement.
  Meaningful consumer consent doesn't mean being given a pageful of 
hardware and software specification gobbledygook. It means consenting 
electronically so that a consumer knows he or she can receive, read and 
retain the information in an electronic record.
  Section 101(c) provides that if a statute, regulation or other rule 
of law requires that information relating to a transaction be provided 
or made available to a consumer in writing, the vendor can use 
electronic means if the consumer, prior to consenting, has been given a 
clear and conspicuous statement of his or her rights. The consumer must 
be informed of the option of getting the record on paper, and what the 
consequences are if he or she later withdraws the electronic consent in 
favor of returning to paper records. Some vendors, for example, may be 
able to achieve considerable savings by using electronic records, and 
offer customers a much more attractive price for doing business online 
rather than through traditional paper and snail mail. But a vendor 
might not want to be locked into a lower price if the buyer reverts to 
paper later in the life of the contract. This provision will assure a 
consumer will be informed up front of any change in the cost if the 
consumer withdraws consent to receive records electronically subsequent 
to consummation of the contract. This could happen, for instance, if a 
consumer finds he cannot access the documents electronically, or the 
vendor chooses to upgrade his software and the consumer does not want 
to go to the expense of upgrading his system to accommodate the change.
  The consumer must also be informed of the hardware and software 
necessary to access and retain records electronically, how to withdraw 
electronic consent, how to update information needed to contact the 
consumer electronically, the categories of records that will be 
provided or made available electronically, how a consumer may request a 
paper copy of an electronic record and whether a fee will be charged 
for such copy. If a vendor changes the electronic system used to obtain 
the original consent electronically, the vendor must obtain the consent 
electronically again using the new system and the same two-way consent 
process.
  Most importantly, the consumer must consent electronically or confirm 
his or her consent electronically in a manner that reasonably 
demonstrates that the consumer can access the information in the 
electronic form that will be used to provide the information. This is 
critical. ``Reasonably demonstrates'' means just that. It means the 
consumer can prove his or her ability to access the electronic 
information that will be provided. It means the consumer, in response 
to an electronic vendor enquiry, actually opens an attached document 
sent electronically by the vendor and confirms that ability in an e-
mail response.
  It means there is a two-way street. It is not sufficient for the 
vendor to tell the consumer what type of computer or software he or she 
needs. It is not sufficient for the consumer merely to tell the vendor 
in an e-mail that he or she can access the information in the specified 
formats. There must be meaningful two-way communication electronically 
between the vendor and consumer.
  At the heart of these provisions is the concern--shared by many in 
the industry as well--that electronic communication, e-mail, is not as 
reliable or as ubiquitous as traditional first class mail. Until 
advances in electronic mail technology eliminate such concerns and 
until the vast majority of Americans are comfortable using the 
technology of the New Economy, consent to use electronic records 
requires special care and attention. Because of such concerns, there 
are some areas where the use of electronic notice and records are 
simply not appropriate today. Section 103 of the conference agreement 
recognizes this by continuing to require paper notice. These areas 
include shutting off a consumer's utilities, canceling or terminating 
health insurance or benefits or life insurance benefits, foreclosing on 
someone's primary residence, recall of a product that risks endangering 
health or safety and documents required to accompany the transportation 
or handling of hazardous materials, pesticides, or other toxic or 
dangerous materials. What happens, for example, if a hazmat truck 
loaded with toxic waste spills its cargo, endangering a community, and 
the only notice about the hazardous cargo was posted on the company's 
website? Is it fair to allow a mortgage lender to foreclosure on 
someone's home just because their ISP went out of business and they 
weren't receiving their payment notices electronically? The exceptions 
we fought for in this section of the conference agreement will protect 
consumers.
  Before paying tribute to those who worked so hard on this bill. I 
believe it is important to the legislative history to say a brief word 
about the process. This is necessary because, unfortunately, statements 
are being made or inserted in the Record and colloquies are being 
offered that seek to weaken, undermine and even directly contradict the 
actual words of the text of the Conference Agreement. This appears to 
come from some quarters that do not share the majority view of those 
who signed the Conference documents. As one of the principal sponsors 
of the Senate measures, S. 761, I am compelled to point out that the 
actual text of the legislation can and should stand on its own.
  The negotiations that led to the final legislative document were very 
difficult and contentious. Because of this, part of the agreement on 
the final language included a commitment--a sort of ``gentleman's 
agreement'' if you will--from all the signers of the Conference 
Agreement not to prepare the normal Statement of Managers that 
accompanies a Conference document. There is no Statement of Managers 
for S. 761, and no one should pretend there is. As one of the key 
managers for the Senate, I can attest that I did not participate in 
negotiating such a document, not did I acquiesce to one prepared by 
another party or parties or sign one.
  The conference agreement is the product of many, many long days and 
nights of negotiations. Commerce Committee Chairman McCain, Ranking 
Democrat Senator Hollings, Senators Leahy and Sarbanes, and Senator 
Abraham all contributed to this product. The efforts of our 
distinguished colleagues in the House, Commerce Committee Chairman 
Bliley and Ranking Democrat John Dingell, were critical in this 
process. I would also like to recognize some of the key staff and 
Administration officials who did yeoman work to produce this agreement. 
In particular, Senator Hollings' Counsel, Mosses Boyd, and his Commerce 
Committee Staff Director, Kevin Kayes, Senator Leahy's outstanding 
Judiciary counsel, Julie Katzman, Senator Sarbanes' Banking Staff, 
Marty

[[Page 10962]]

Gruenberg and Jonathan Miller. Chairman McCain's very able and patient 
counsel, Maureen McLaughlin, and Senator Abraham's lead staffer on this 
bill, Kevin Kolevar. Sarah Rosen-Wartell of the White House staff and 
Commerce Department General Counsel Andy Pincus also deserve praise for 
their hard work on this bill.
  This conference agreement came perilously close on more than one 
occasion to running off the rails, but each time the will was found to 
resume negotiations and try to bring the conference to a close. This is 
also a tribute to the hard work of a handful of consumer and industry 
groups who did not want to give up on the process. I urge my colleagues 
to vote for this agreement, which lays another important cornerstone 
for electronic commerce.
  At the end of the day, this is not a perfect bill. I do not think any 
of the conferees would argue that it is. But it is a very good bill. It 
is a very good bill because, as a result of three Senate committees and 
thousands of hours, we took key principles of what was known as the old 
economy--consumer protection, informed consent, making sure that the 
vulnerable, the elderly, and people for whom the home and health care 
are lifeline concerns--we ensured that they will be protected, while at 
the same time allowing those in the financial services industry, who 
came to us with sensible suggestions for saving time and money--by 
taking records from paper to the electronic world--to have their 
concerns addressed, while at the same time being true to fundamental 
values of consumer protection and the fusing together of the new and 
the old economy. That is what I think makes this legislation so 
special.
  Chairman McCain is here. He and his staff did an extraordinary job, 
as did Senator Abraham. I cannot say enough good things about four 
senior Democrats--Senator Leahy, Senator Sarbanes, Senator Hollings, 
and Senator Kerry--because they helped us champion those consumer 
protection principles that were so important and helped us get this 
bill done right.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, I join my colleague from Oregon in 
expressing support for what we have achieved here. I begin by thanking 
Senator McCain, Senator Sarbanes, and Senator Hollings for their 
leadership. They helped to create the climate within which we were able 
to finally get together with the House leadership.
  But also I thank the distinguished Senator from Oregon. He is 
extraordinarily knowledgeable in this arena and very creative. And he 
works hard at it. He really has helped to shape the outcome of this in 
a significant way. I think he has done a very good job of outlining the 
tensions that existed here.
  Many of us thought, at the outset of this endeavor, that we could 
accomplish this quickly. We ran into, as he said, complications along 
the road. The key to many of us was that even as we provided the legal 
capacity for electronic signatures to take place and certain 
recordkeeping to take place, we did not want to diminish the rights of 
our citizens to have access to information about them, we did not want 
their ability to be able to make corrections to be diminished somehow. 
We did not want to diminish their right to know about themselves or 
about their own transactions in a way that would diminish their 
position in the marketplace. And that is a difficult thing. We worked 
through that. I think we are still going to be working through that for 
some time.
  But the important thing is that this phenomenon, this revolution that 
is taking place in America and across the globe in how we do business, 
needed to be----
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. KERRY. Will the Senator yield me 30 more seconds?
  Mr. McCAIN. I yield the Senator 30 more seconds.
  Mr. KERRY. That revolution needed to be able to continue in its most 
creative form and, frankly, with the best upside possible for the 
people to whom we are all accountable, who are the consumers, the 
citizens, and the people who ultimately we want to have benefit from 
this. I think this legislation is very positive in that regard.
  I thank the chairman of the Commerce Committee, Senator McCain, for 
his leadership and his courtesy in letting the usually mostly abused 
and beleaguered minority take a dominant position at the outset of the 
debate. It is characteristic of him that he allowed us to do that. It 
is a very momentary glimpse of freedom we are not used to. We thank him 
for that. It is just whetting our appetite and only makes us work 
harder to have that dominant position forever.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I appreciate both my friend from Oregon 
and my friend from Massachusetts for their work on this bill. I 
appreciate their comments. It is a great pleasure to work with both of 
them on the Commerce Committee.
  I think sometimes it is worthy of note, in these days of tension, 
that on the Commerce Committee we have a great habit of working in a 
bipartisan fashion. I would argue that no bill that I know of has been 
reported out of our committee that was not a bipartisan effort. No bill 
has been reported out, that I know of in the years that I have been the 
chairman, that was strictly along party lines.
  Mr. President, tonight the Senate considers the conference report for 
S. 761, the Electronic Signatures in Global and National Commerce Act. 
Before I summarize the bill, I want to note for the Record the 
importance of this measure.
  The bipartisan legislation would be a significant achievement for 
this Congress and the American people. Today in America we are in the 
midst of a phenomenal transformation from the industrial age to the 
information age.
  Even as we speak, Americans are on the Internet, browsing, 
researching, and experiencing in ever-greater numbers. They are also 
buying. In fact, electronic commerce is one of the principle engines 
driving our Nation's unprecedented economic growth. For example, 
Forrester Research has estimated that consumer spending online will 
total $185 billion by 2003. During this past holiday season alone, 
online merchants transacted an estimated $5-7 billion dollars worth of 
commerce--a 300% increase in business from 1998.

  But one great barrier to the continued growth of Internet commerce is 
the lack of consistent, national rules governing the use of electronic 
signatures. A majority of States have enacted electronic authentication 
laws, but no two of these laws are the same. This inconsistency deters 
businesses and consumers from using electronic signature technologies 
to authorize contracts or transactions.
  This bipartisan legislation can eliminate this unnecessary barrier to 
the growth of electronic commerce by providing consistent, fair rules 
governing electronic signatures and records.
  This bill will do the following:
  It would ensure that consistent rules for validating electronic 
signatures and transactions apply throughout the country. Thus 
providing industry with the legal certainty needed to grow electronic 
commerce.
  It empowers businesses to replace expensive warehouses full of 
awkward and irreplaceable paper records with electronic records that 
are easily searched or duplicated. Moreover, State and Federal agencies 
are prohibited from requiring a business to keep paper records except 
under extreme circumstances--where they can show a compelling 
government interest. To prevent abuses of electronic recordkeeping, 
however, the bill also authorizes regulatory agencies to define 
document integrity standards that are necessary to insure against 
fraud.
  It would also ensure that private commercial actors get to choose the 
type of electronic signatures that they want to use. This will ensure 
that the free market--not government bureaucrats--will determine which 
technologies succeed. To that end, the legislation also prohibits 
States or Federal agencies from according ``greater legal status or 
effect'' to one specific technology.

[[Page 10963]]

  And this bill recognizes that without consumer confidence, the 
Internet can never reach its full potential. Thus, this bill empowers 
consumers to conduct transactions or receive records electronically 
without foregoing the benefits of State consumer disclosure 
requirements.
  Specifically, the bill would provide that when consumers choose to 
conduct transactions or receive records electronically, electronic 
records can satisfy laws requiring a written consumer disclosure if: 
consumers have been given a statement explaining what records they are 
agreeing to receive electronically, the procedures for withdrawing 
consent, and any relevant fees, and consumers consent, or confirm 
consent electronically, in a manner that reasonably demonstrates that 
they can actually access the information.
  The goal of these consumer protection provisions is basic fairness. 
To that end, if a business changes hardware or software requirements in 
a way that precludes the consumer from accessing or retaining the 
records, the consumer can withdraw consent--without a fee.
  But the bill also ensures that these consumer protections do not 
become unduly burdensome as technology advances. Thus, for example, the 
bill provides that a Federal regulatory agency can exempt categories of 
records from the consumer consent provisions if this would eliminate a 
substantial burden on e-commerce without jeopardizing consumers.
  I also note that the bill directs the Secretary of Commerce and the 
Federal Trade Commission to report to Congress on the benefits and 
burdens of the bill's consumer protection provisions. It also directs 
the Secretary of Commerce to report to Congress within 12 months on the 
effectiveness of delivering consumer notices via email.
  This is important legislation, and my colleague from Michigan, 
Senator Abraham, is to be commended for his foresight in introducing 
this legislation. He is responsible for the formulation of it. He has 
shepherded it through for many months. I commend him for his work on 
this legislation. It is safe to say this legislation and conference 
report would not be here today if not for the efforts of Senator 
Abraham. I also commend Senators Stevens, Burns, Wyden, Leahy, Hollings 
and Sarbanes for their commitment to bipartisan agreement on the 
critical issues raised by this legislation. And, I thank Chairman 
Bliley and ranking member Dingell in the House, for their dedication 
and leadership on this issue.
  Reaching a bipartisan agreement on the issues raised by this 
legislation has not been easy. In fact, the conferees to this bill have 
spent months considered the often-conflicting views of various 
industries, consumer protection groups, State governments and federal 
agencies.
  Needless to say, the bill that emerged from this broad and 
contentious process had to try to strike a fair balance between the 
often-conflicting interests of these groups. As a result, some factions 
may have had doubts about the bill because they thought that a narrower 
or partisan legislative process might have produced a bill more slanted 
towards their narrow interests.
  But that sort of thinking is short-sighted and fatally flawed: Where 
this legislation is concerned, a narrow or partisan approach would have 
jeopardized the growth of electronic commerce. This would have harmed 
businesses, consumers and the national economy--including the same 
special interests that a narrower approach might have sought to favor.
  We must recognize that this bill represents one step in the 
continuing--and unfinished--process of integrating electronic 
transactions and the Internet into the mainstream of American commerce. 
This process of integration must continue if we are to continue to 
enjoy the unprecedented economic growth that e-commerce and technology 
have helped bring to this country.
  But electronic commerce cannot continue to grow and develop without 
broad support from consumers, businesses and governments. Consumers 
will not support electronic commerce if they discover that electronic 
transactions strip them of traditional protections.
  Nor will businesses support electronic commerce if they cannot 
realize the cost savings it offers. Finally, governments may not enact 
laws supporting electronic commerce should such transactions strip 
their citizens of rights that they have previously enjoyed.
  Electronic signatures legislation must, therefore, balance the 
interests of these various groups without unduly favoring any of them: 
it must give electronic commerce the certainty it needs to grow while 
preserving the consumer protections that States have chosen to apply in 
paper-based commercial transactions.
  The broad and bipartisan support enjoyed by this legislation is the 
surest sign that it has achieved its most important objective: It has 
struck a fair balance between competing interests that will ensure 
continued broad support for the growth of electronic commerce.
  Mr. President, the Electronic Signatures in Global and National 
Commerce Act is a positive, confidence-creating tool that will allow 
the Internet to continue to develop towards its full potential as a 
conduit for information, communication and commerce. It will enable 
businesses and consumers alike to rely on digital signatures regardless 
of their physical location. Uniform standards for digital signatures 
will decrease costs while increasing certainty and consumer confidence. 
The value of these public benefits should not be underestimated.
  In closing, I want again to thank Chairman Bliley, and Ranking Member 
Dingell in the House for all of their work. In the Senate, I note the 
hard work of the ranking member of the committee, Mr. Hollings, Senator 
Wyden, and others. Without their efforts this bill would not be before 
us today. I especially, again, recognize the incredible job done by 
Senator Abraham, the original sponsor of the legislation, the original 
shepherd, the person who played a key and vital role in the formulation 
of these final agreements.
  Given the importance of these issues to consumers, businesses and our 
global economy, I urge my colleagues to support this legislation.
  I ask unanimous consent that a listing of the groups that support S. 
761 be printed in the Record.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:

                       Groups that support S. 761

       1. Business Software Alliance.
       2. Microsoft.
       3. America Online.
       4. Information Technology of America.
       5. American Express Company.
       6. DLJDirect.
       7. American Bankers Association.
       8. Citigroup.
       9. Information Technology Industry Council.
       10. American Electronics Association.
       11. Fannie Mae.
       12. Freddie Mac.
       13. National Association of Realtors.
       14. Oracle.
       15. Cable & Wireless.
       16. Sallie Mae.
       17. US Chamber of Commerce.
       18. Real Estate Roundtable.
       19. Consumer Mortgage Coalition.
       20. Mortgage Bankers Association.
       21. Electronic Financial Services Council.
       22. Intuit.
       23. Federal Express.
       24. National Association of Manufacturers.
       25. Coalition for Electronic Authentication.
       26. America's Community Bankers.
       27. Investment Company Institute.

  Mr. LEAHY. Mr. President, I am pleased that the Senate is finally 
considering the conference report on S. 761, ``The Electronic 
Signatures in Global and National Commerce Act''. I wish that we could 
pass it tonight. Tomorrow, when the delayed vote occurs, I will be in 
Vermont. While I am never sorry to be in Vermont, I will regret missing 
the final tally. I was honored to serve as a conferee and help develop 
the conference report. I signed the conference report and support its 
final passage. I go back to my native State secure in the knowledge 
that it will pass overwhelmingly.

[[Page 10964]]

  This legislation is intended to permit and encourage the continued 
expansion of electronic commerce and to promote public confidence in 
the integrity and reliability of online promises. These are worthy 
goals, and they are goals that I have long sought to advance.
  For example, in the last Congress, many of us worked together to pass 
the Government Paperwork Elimination Act, which established a framework 
for the federal government's use of electronic forms and electronic 
signatures. Many of us have worked together in a successful bipartisan 
effort to promote the widespread use of encryption and relax out-dated 
export controls on this critical technology for ensuring the 
confidentiality and integrity of online communications and stored 
computer information. In areas as diverse as enhancing copyright and 
patent protections for new technologies and updating our criminal laws 
to address new forms of cybercrime, we have been able to work together 
in a constructive, bipartisan way to make real progress on a sound 
legal framework for electronic commerce to flourish.
  The conference report is the product of such bipartisan cooperation. 
I think we all know that there were some bumps along the way. At one 
point, industry representatives were warned against even speaking with 
any Democrats. But the final product is bipartisan. It is an example of 
Congress at work rather than at loggerheads. It is legislators 
legislating rather than politicians posturing and unnecessarily 
politicizing important matters of public policy.
  I commend Chairman Bliley and Chairman McCain for making this a real 
conference, in which all conferees, Republican and Democratic, had an 
opportunity to air their concerns and contribute to the final report. 
We all might have written some provisions differently, but the 
conference report is a solid and reasonable consensus bill that will 
establish a Federal framework for the use of electronic signatures, 
contracts, and records, while preserving essential safeguards 
protecting the Nation's consumers.
  The conference report adheres to the five basic principles for e-sign 
legislation articulated by the Democrat Senators in a letter dated 
March 28, 2000.
  It ensures effective consumer consent to the replacement of paper 
notices with electronic notices.
  It ensures that electronic records are accurate, and relevant parties 
can retain and access them.
  It enhances legal certainty for electronic signatures and records and 
avoids unnecessary litigation by authorizing regulators to provide 
interpretive guidance.
  It avoids unintended consequences in areas outside the scope of the 
bill by providing clear federal regulatory authority for records not 
covered by the bill's ``consumer'' provisions.
  And, it avoids facilitating predatory or unlawful practices.
  These principles are not rocket science but are simply intended to 
ensure that the electronic world is no less safe for American consumers 
than the paper world. The American public has enough concern when they 
go online. They worry whether their privacy will be protected, whether 
a damaging computer virus will attack their computer, whether a 
computer hacker will steal their personal information, adopt their 
identity and wreak havoc with their good names, or whether their kids 
will meet a sexual predator. These worries are all serious drags on 
electronic commerce.
  An AARP survey of computer users over the age of 45 released on March 
31st found that almost half of respondents already think that 
electronic contracts would give them less protection than paper 
contracts, while only one-third believe they would have the same degree 
of protection. With this conference report, we have avoided aggravating 
consumers' worries. Companies doing business online want to reassure 
consumers and potential customers that their interests will be 
protected online, not heighten their concern about electronic commerce. 
Our conference report should be helpful in this regard.
  Mr. President, the United States has been the incubator of the 
Internet through its infancy. The world closely watches whenever we 
debate or enact policies that affect the Internet, and that is another 
reason why we must act carefully and intelligently whenever we pass 
Internet-related laws. What we have produced here is the charter for 
the next growth phase of e-commerce, and this bill will be closely read 
and widely emulated. Because of the potential this bill had for 
eviscerating scores of basic state consumer protection laws that most 
Americans today take for granted, this bill also has presented us with 
perhaps the most significant consumer issues of a decade or longer--not 
for what, thank goodness, this bill is in its final form, but for what 
this bill nearly became in its earlier stages. To the benefit of 
consumers and in the interest of the smooth and sensible forward 
progress of Internet commerce, this bill largely strikes a constructive 
balance. It advances electronic commerce without terminating or 
mangling the basic rights of consumers.
  Before I discuss specific provisions of the conference report, I note 
that I saw in the Congressional Record of the House proceedings a 
statement by Chairman Bliley that is formatted like a managers' 
statement of a conference report. I feel I must clarify that those are 
Mr. Bliley's views, not a statement of the managers. In fact, I saw it 
for the first time today, when I picked up the Congressional Record, 
and have not yet had a chance to study it thoroughly.
  I will now describe how the conference report gives effect to the 
Democratic Senators' five basic principles.
  First, the conference report will ensure informed and effective 
consumer consent to the replacement of paper notices and disclosures 
with electronic notices and disclosures, so that consumers are not 
forced or tricked into receiving notices and disclosures in an 
electronic form that they cannot access or decipher.
  Under the House bill, a business could obtain a consumer's 
``consent'' simply by specifying the hardware and software needed to 
access the notices and disclosures. This approach would have done 
little or nothing to protect technologically unsophisticated consumers, 
who may not know whether they have the necessary hardware and software 
even if the technical specifications are provided.
  I maintained that any standard for affirmative consent must require 
consumers to consent electronically to the provision of electronic 
notices and disclosures in a manner that verified the consumer's 
capacity to access the information in the form in which it would be 
sent. Such a mechanism provides a check against coercion, and 
additional assurance that the consumer actually has an operating e-mail 
address and the other technical means for accessing the information.
  Section 101(c) of the conference report requires the use of a 
technological check, while leaving companies with ample flexibility to 
develop their own procedures. The critical language, which Senator 
Wyden and I developed and proposed, provides that a consumer's consent 
to the provision of information in electronic form must involve a 
demonstration that the consumer can actually receive and read the 
information. Section 101(c) also provides that if there is a material 
change in the hardware or software requirements needed to access or 
retain the information, the company must again verify that the consumer 
can receive and read the information, or allow the consumer to withdraw 
his or her consent without the imposition of any conditions, 
consequences or fees. In addition, prior to any consent, a consumer 
must be notified of his or her rights, including the right to receive 
notices on paper and any available option for reverting to paper after 
an electronic relationship has been established.
  Senator Gramm has criticized the conference report on the ground that 
its technological check on consumer consent unfairly discriminates 
against electronic commerce. But those most familiar with electronic 
commerce have never seriously disputed the need for a technological 
check. In fact, many high tech firms have acknowledged that it is good 
business practice

[[Page 10965]]

to verify that their customers can open their electronic records, and 
many already have implemented some sort of technological check 
procedure. I am confident that the benefits of a one-time technological 
check far outweigh any possible burden on e-commerce, and it will 
greatly increase consumer confidence in the electronic marketplace.
  Let me make special note of section 101(c)(3), a late addition to the 
conference report. Without this provision, industry representatives 
were concerned that consumers would be able to back out of otherwise 
enforceable contracts by refusing to consent, or to confirm their 
consent, to the provision of information in an electronic form. At the 
same time, however, companies wanted to preserve their autonomy as 
contracting parties to condition their own performance on the 
consumer's consent. For example companies anticipated that they might 
offer special deals for consumers who agreed not to exercise their 
right to paper notices. Section 101(c)(3) makes clear that failure to 
satisfy the consent requirements of section 101(c)(1) does not 
automatically vitiate the underlying contract. Rather, the continued 
validity of the contract would turn on the terms of the contract 
itself, and the intent of the contracting parties, as determined under 
applicable principles of State contract law. Failure to obtain 
electronic consent or confirmation of consent would, however, prevent a 
company from relying on section 101(a) to validate an electronic record 
that was required to be provided or made available to the consumer in 
writing.
  I should also explain the significance of section 101(c)(6), which 
was added at the request of the Democratic conferees. This provision 
makes clear that a telephone conversation cannot be substituted for a 
written notice to a consumer. For decades, consumer laws have required 
that notices be in writing, because that form is one that the consumer 
can preserve, to which the consumer can refer, and which is capable of 
demonstrating after the fact what information was provided. Under 
appropriate conditions, electronic communications can mimic those 
characteristics; but oral notice over the telephone will never be 
sufficient to protect consumer interests.
  Second, the conference report will ensure that electronic contracts 
and other electronic records are accurate and that relevant persons can 
retain and access them. Consumers must be able to retain electronic 
records and must have some assurance that they provide reasonable 
guarantees of the accuracy and integrity of the information that they 
contain.
  Under section 101(e) of the conference report, the legal effect of an 
electronic contract or record may be denied if it is not in a form that 
can be retained and accurately reproduced for later reference and 
settlement of disputes. This means that the parties to a contract may 
not satisfy a statute of frauds requirement that the contract be in 
writing simply by flashing an electronic version of the contract on a 
computer screen. Similarly, product warranties must be provided to 
purchasers in a form that they can retain and use to enforce their 
rights in the event that the product fails.
  Third, the conference report will enhance legal certainty for 
electronic signatures and records and avoid unnecessary litigation by 
authorizing Federal and State regulators to provide interpretive 
guidance. Even with the representation on this conference of Members 
from committees of varied jurisdiction, we could not begin to think of 
every circumstance that might arise in the future as to which this 
legislation will apply. It was therefore essential to provide 
regulatory agencies with sufficient flexibility and interpretive 
authority to implement the statutes modified by the legislation.
  Most importantly, the conference report preserves substantial 
authority for Federal and State regulators with respect to record-
keeping requirements. In a letter dated May 23, 2000, the Department of 
Justice expressed concern that an early draft of the conference report, 
produced by certain Republican conferees, would ``seriously undermine 
the government's ability to investigate, try and convict criminals who 
alter or hide required records in programs such as Medicare, Medicaid, 
and federal environmental laws.'' The Department explained:

       Record Retention. As presently drafted, the bill leaves the 
     public at risk for serious waste, fraud, and abuse. For 
     example, under the current bill, there is nothing to prevent 
     a Medicare contractor from retaining its financial records on 
     a spreadsheet (such as Excel or Quattro Pro). However, 
     because those programs generally contain no security features 
     to monitor changes to the files they create, anyone could 
     change one number on a spreadsheet, which would then change 
     all other numbers affected by the impermissible entry, 
     reflecting a financial picture different from the reality. 
     The government could have its hands tied in seeking to 
     establish rules to ensure that such records could not be 
     altered.

  The Department's concerns regarding the Federal Government were 
shared by the States, whose regulators need and deserve the same 
flexibility as Federal regulators. This is particularly true in areas 
where the States are the primary regulators, as they are with respect 
to insurance and State-chartered banks. Having pressed this point 
throughout the conference, I am pleased that the final report treats 
Federal and State regulators with equal respect, and that it has won 
the support of the National Conference of State Legislatures.
  Under earlier drafts of this conference report, as in H.R. 1714 as 
passed by the House, a requirement that a record be retained could be 
met by retaining an electronic record that accurately reflected the 
information set forth in the record ``after it was first generated in 
its final form as an electronic record.'' By striking that final 
phrase, we made clear that agencies, through their interpretive 
authority, can ensure that electronic records remain accurate 
throughout the period that they are required by law to be retained. For 
additional certainty, we expressly authorized agencies to set 
performance standards to assure the accuracy, integrity, and 
accessibility of records that are required to be retained and, if 
necessary, to require retention of a record in paper form. We also 
delayed the effective date of the Act with respect to record retention 
requirements, to give agencies time to put in place appropriate 
regulations designed to assure effective and sustainable record 
retention, and to prevent companies from retaining materials in any 
easily alterable form that they chose until regulations are 
forthcoming. Together, these changes will avoid facilitating lax 
record-keeping practices that could impede the enforcement of program 
requirements, anti-fraud statutes, environmental laws, and many other 
laws and regulations.
  Fourth, the conference report will avoid unintended consequences for 
laws and regulations governing ``records'' outside its intended focus 
on business-to-consumer and business-to-business transactions. I was 
seriously concerned that the sweeping legislation passed by the House 
would allow hazardous materials transporters to provide truckers with 
the required description of the materials via electronic mail, so that 
key information might not be available to clean-up crews in the event 
an accident disabled the driver. Similarly, I worried that the House 
bill would allow employers to provide OSHA-required warnings on a Web 
site rather than on a dangerous machine.
  The conference report raises no such concerns. For one thing, it 
specifically excludes from its scope any documents required to 
accompany the transportation or handling of hazardous materials, 
pesticides, and other toxic or dangerous materials. For another thing, 
it expressly preserves all Federal and State requirements that 
information be posted, displayed or publicly affixed. In addition to 
allaying concerns about OSHA-warnings, this provision ensures that the 
bill will not inadvertently undermine Federal and State labeling 
requirements, such as requirements that poisonous products be labeled 
with the skull and crossbones symbol.
  Perhaps more importantly, the scope of the legislation has been 
narrowed. As reported by the conference committee, the bill covers 
signatures, contracts and records relating to a ``transaction'' in or 
affecting interstate or

[[Page 10966]]

foreign commerce, with the critical term--``transaction''--defined to 
mean ``an action or set of actions relating to the conduct of business, 
consumer, or commercial affairs between two or more persons.'' The 
conferees specifically rejected including ``governmental'' affairs in 
this definition. Thus, for example, the bill would not cover records 
generated purely for governmental purposes, such as regular monitoring 
reports on air or water quality that an agency may require pursuant to 
the Clean Air Act, Clean Water Act, Safe Drinking Act, or similar 
Federal or State environmental laws.
  Fifth and finally, the conference report avoids the problem created 
by many earlier drafts, including the House bill, of potentially 
facilitating unfair and deceptive practices. It does this through a 
broad savings clause which clarifies that the bill does not limit any 
legal requirement or prohibition other than those involving the 
writing, signature, or paper form of a contract. Laws--including common 
law rules--that prohibit fraud, unfair or deceptive trade practices, or 
unconscionable contracts are not affected by this Act. A wrongdoer may 
not argue that fraudulent conduct that complies with the technical 
requirements of section 101(c) is beyond the reach of anti-fraud laws. 
By the same token, a consumer is always entitled to assert that an 
electronic signature is a forgery, was used without authority, or 
otherwise is invalid for reasons that would invalidate the effect of a 
signature in written form.
  This legislation has come a long way in conference. It is far from 
the reckless bill it was in danger of becoming. Still, it is far from 
perfect. As a general matter, I believe it may still be unduly 
preemptive of State regulatory and record-keeping authority. It is 
ironic that the same Members who claim to be vigilant guardians of 
States' rights are so quick to impose broad Federal mandates on the 
States when it suits their political interests. The majority has failed 
to explain why the expansion of the Internet justifies jettisoning the 
federalist principles that have governed our Republic for more than two 
centuries. I have worked hard, in connection with this bill and others, 
to preserve State authority in areas traditionally reserved to the 
States, particularly where there is no conflict between the Federal 
goals and State jurisdiction. We should preempt State authority only 
when there is a demonstrated need to establish a national standard, and 
even then, only for as long as is necessary.
  That being said, the conference report appropriately rejects the 
massively preemptive approach taken by earlier versions of this 
legislation, including the House-passed bill. As the National 
Governors' Association observed in a letter to Congress dated March 14, 
2000, ``H.R. 1714's ambiguity with respect to preemption [was] very 
troubling''. It authorized States to ``modify, limit, or supersede'' 
the Federal statute by adopting the Uniform Electronic Transactions Act 
(UETA), but then rendered this authorization irrelevant by stating that 
no State law (including UETA) was effective to the extent that it was 
inconsistent with the Federal statute or technology specific.
  By contrast, the conference report does not preempt the laws of those 
States that adopt UETA, so long as UETA is adopted in a uniform manner. 
Such exceptions to UETA as a State may adopt are preempted, but only to 
the extent that they violate the principle of technological neutrality 
or are otherwise inconsistent with the Federal statute. This affords 
States considerable flexibility; for example, a State may enact UETA to 
incorporate the consumer consent procedures set forth in section 
101(c).
  In addition, section 104(a) of the conference report expressly 
preserves governmental filing requirements. Federal agencies are 
already working toward full acceptance of electronic filings, pursuant 
to the schedule established by the Government Paperwork Elimination 
Act. I am confident that State agencies will follow our lead. Until 
they are technologically equipped to do so, however, they have an 
unqualified right under section 104(a) to continue to require records 
to be filed in a tangible printed or paper form.
  I have a number of other concerns about the conference report. In 
particular, I am troubled that the conference report fails to provide a 
clear Federal rule--or, indeed, any rule at all--concerning how it is 
intended to affect requirements that information be sent, provided, or 
otherwise delivered. The absence of a delivery provision is 
particularly conspicuous given the fact that the prototype for this 
legislation does include such a provision. Section 8(a) of UETA 
provides that if a law requires information to be sent in writing to 
another person (but does not specify a particular method of delivery), 
the requirement is satisfied if the information is sent in an 
electronic record that the recipient can retain. Under section 8(b), if 
a law requires information to be sent by a specified method--whether by 
regular U.S. Mail, express mail, registered mail, certified mail, or 
another method--then the information must be sent by the method 
specified in the other law, except that parties may contract out of 
regular mail requirements to the extent permitted by the other law. 
UETA also contains a detailed rule for determining when an electronic 
record is sent, and when it is received.
  The conference report touches upon the issue of delivery in section 
101(c)(2)(B), but only with respect to specified methods that require 
verification or acknowledgment of receipt, such as registered or 
certified mail. What happens to State law requirements that a notice be 
sent by first-class mail or personal delivery? How about a law that 
requires information to be provided, sent, or delivered in writing, but 
does not specify a particular method of delivery? I raised these 
questions during the conference, but the conference report provides few 
answers.
  The conference report does provide some guidance in the case of 
States that enact UETA. In such States, section 8(a) of UETA will 
govern with respect to general delivery requirements, and section 
8(b)(2) of UETA will govern with respect to requirements that 
information be delivered by a specified method, subject to section 
102(c) of the federal legislation. Section 102(c) prevents States that 
enact UETA from circumventing the federal legislation through the 
imposition of new nonelectronic delivery methods. Thus, States enacting 
UETA may continue to prescribe specific delivery methods, so long as 
there is an electronic alternative for any nonelectronic delivery 
methods.
  This leaves the question of how the Federal legislation will affect 
Federal delivery requirements and State delivery requirements in non-
UETA States. Because our bill is silent on this question, and because 
repeal and preemption by implication are disfavored, a court or agency 
interpreting the legislation could reasonably conclude that these 
Federal and State delivery requirements remain in full force and 
effect. Indeed, this interpretation is practically compelled by the 
plain language of the legislative text. It does, however, have the 
potential to undermine one of our key legislative objectives--that is, 
the elimination of unintended and unwarranted barriers to electronic 
commerce. For this reason, it will be tempting to discern in this 
legislation some sort of plan to permit electronic delivery of 
information whenever delivery is required by law, even when the law 
specifies a particular method by which delivery must be made. Let me 
assure the courts and regulators that have occasion to read these words 
that this legislator had no such plan.
  Had we in fact addressed this issue in conference, my goal would have 
been to ensure that any specific requirement that information be sent 
or delivered not be relaxed or weakened through this Act. I believe an 
electronic method of delivery should be at least as reliable, secure, 
and effective as the method it replaces. Thus, a law that requires 
information to be delivered to a person by first class mail should not 
be satisfied simply by posting the information on a Web site; at a 
minimum,

[[Page 10967]]

the person must also be notified of the location and availability of 
the information. Nor is information delivered, in my view, if it is 
electronically posted for an unreasonably short period of time, or sent 
electronically in a manner that inhibits the ability of the recipient 
to store or print the information.
  Having failed to address the issue of delivery, we may be compelled 
to revisit the issue at a later date. We will, by then, have the 
benefit of the Commerce Department's study under section 105(a) of the 
conference report, regarding the effectiveness and reliability of 
electronic mail as compared with more traditional methods of delivery.
  Another troubling provision in the conference report appears at the 
end of section 101, and concerns the liability of insurance agents and 
insurance brokers. This provision appeared for the first time in a 
conference draft produced by the Republican conferees on May 15th. In 
its original incarnation, this provision gave insurance agents and 
brokers absolute immunity from liability if something went wrong as a 
result of the use of electronic procedures. This was not just a shield 
from vicarious liability, or even from negligence; rather, it was an 
absolute shield, which would protect insurance agents and brokers from 
their own reckless or even wilful conduct. No matter that insurance 
agents and brokers are perfectly capable of protecting themselves 
through their contracts with insurance companies and their customers. 
Senator Hollings and I opposed the provision as unnecessary and 
indefensible as a matter of policy, and we succeeded in transforming it 
into a clarification that insurance agents and brokers cannot be held 
vicariously liable for deficiencies in electronic procedures over which 
they had no control. In this form, the provision remains in the bill as 
a stark reminder of the power of special interests.
  Section 104(d)(1) is another political compromise that blemishes this 
conference report, although I believe its actual impact will be 
negligible. It provides that Federal agencies may exempt a specified 
category or type of record from the consumer consent requirements of 
section 101(c), but only if such exemption is ``necessary'' to 
eliminate a ``substantial'' burden on electronic commerce, and it will 
not increase the material risk of harm to consumers. While Chairman 
Bliley indicated in his floor statement yesterday that this test should 
not be read as too limiting, the opposite is true. The test is, and was 
intended to be, demanding. The exemption must be ``necessary,'' and not 
merely ``appropriate,'' as Chairman Bliley suggested. It should also be 
noted that the conferees considered and specifically rejected language 
that would have authorized State agencies to exempt records from the 
consent requirements.
  Finally, I want to discuss the concept of technology neutrality that 
is so central to this bill. This legislation is, appropriately, 
technology neutral. It leaves it to the parties to choose the 
authentication technology that meets their needs. At the same time, it 
is undeniable that some authentication technologies are more secure 
than others. Nothing in the conference report prevents or in any way 
discourages parties from considering issues of security when deciding 
which authentication technology to use for a particular application. 
Indeed, such considerations are wholly appropriate.
  Pursuant to the Government Paperwork Elimination Act, passed by the 
previous Congress, the Office of Management and Budget (OMB) has 
adopted regulations to permit individuals to obtain, submit and sign 
government forms electronically. These regulations direct Federal 
agencies to recognize that different security approaches offer varying 
levels of assurance in an electronic environment and that deciding 
which to use in an application depends first upon finding a balance 
between the risks associated with the loss, misuse or compromise of the 
information, and the benefits, costs and effort associated with 
deploying and managing the increasingly secure methods to mitigate 
those risks.
  The OMB regulations recognize that among the various technical 
approaches, in an ascending level of assurance, are ``shared secrets'' 
methods (e.g., personal identification numbers or passwords), digitized 
signatures or biometric means of identification, such as fingerprints, 
retinal patterns and voice recognition, and cryptographic digital 
signatures, which provide the greatest assurance. Combinations of 
approaches (e.g., digital signatures with biometrics) are also possible 
and may provide even higher levels of assurance.
  In developing this legislation, the conference committee recognized 
that certain technologies are more secure than others and that 
consumers and businesses should select the technology that is most 
appropriate for their particular needs, taking into account the 
importance of the transaction and its corresponding need for assurance.
  Mr. President, the benefits of electronic commerce should not, and 
need not, come at the expense of increased risk to consumers. I am 
delighted that we have been able to come together in a bipartisan 
effort in which Democrats and Republicans in the Senate and House are 
joining in s-sign legislation that will encourage electronic commerce 
without sacrificing consumer protections. I want to commend Senator 
Hollings, Senator Sarbanes and Representative Dingell, the ranking 
Democrats on the other Committees participating in the House-Senate 
Conference, for their leadership and steadfast efforts on behalf of our 
dual objectives. I thank Chairman Bliley and Chairman McCain for 
allowing the conference process to work and to result in a report that 
so many of us can support. I also want to praise Senator Wyden for his 
dedication to this project and for never losing sight of the need to 
create a balanced bill. It has been a privilege to work with all of 
these distinguished Members on this landmark legislation.
  I am profoundly grateful to the Administration for its work on this 
legislation. Andy Pincus, Sarah Rosen Wartell, Michael Beresik, Gary 
Gensler, and Gregory Baer, in particular, have devoted countless hours 
to ensuring that the conference report will create a reasonable and 
responsible framework for electronic commerce.
  I would also like to thank the Senate and House staff who worked so 
hard to bring this matter to a reasonable conclusion. On my staff, 
Julie Katzman and Beryl Howell. In addition, Maureen McLaughlin, Moses 
Boyd, Carol Grunberg, Marty Gruenberg, Jonathan Miller, Kevin Kayes, 
Steve Harris, David Cavicke, Mike O'Rielly, Paul Scolese, Ramsen 
Betfarhad, James Derderian, Bruce Gwinn, Consuela Washington, and Jeff 
Duncan--all deserve credit for their role in crafting the consensus 
legislation that the Senate passes today. Thanks, too, to House 
Legislative Counsel Steve Cope, for his technical assistance and 
professionalism throughout this conference.
  This conference report enjoys strong bipartisan and bicameral 
support. It passed the House of Representatives yesterday by an 
overwhelming majority. It has been well received by industry and 
consumer representatives alike, by the States as well as by the 
Administration. I urge its speedy passage into law.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Mr. ABRAHAM. Mr. President, I am proud to rise this evening to 
discuss legislation that I am very confident we will pass tomorrow--the 
conference report to S. 761, the Electronic Signatures and Global 
National Commerce Act. This is the culmination of nearly two years' 
effort, and I deeply appreciate all of the generous assistance on the 
part of my colleagues who helped move this bill through the legislative 
process.
  I believe that hindsight will prove this to be one of the most 
important pieces of legislation to emerge from the 106th Congress. This 
legislation will eliminate the single most significant vulnerability of 
electronic commerce, which is the fear that everything it revolves 
around--electronic signatures, contracts, and other

[[Page 10968]]

records--could be rendered invalid solely by virtue of their being in 
``electronic'' form, rather than in a tangible, ink and paper format.
  This bill will literally supply the pavement for the e-commerce lane 
of the information superhighway. What we do today truly changes 
tomorrow, and I am certain that this legislation will prove to have a 
tremendous positive impact on electronic commerce--and on the general 
health of our economy--for decades to come.
  Mr. President, thanks to the development of secure electronic 
signatures and records, individuals, businesses, and even governments 
are increasingly able to enter transactions without ever having to 
travel--whether the travel is a short drive across town or a thousand-
mile flight. They are turning on a computer and opening e-mail, rather 
than scheduling drop-offs at mailboxes or pick-ups from courier 
services.
  They are able to transact now, rather than ``tomorrow, before 10AM'', 
or over the next few days, depending on mail volume (and, of course, 
except for on Sunday). They are paying transactions costs in the 
fractions of cents, rather than in 33 cent increments. And as we move 
forth into the electronic world, ``they'' will increasingly include 
even the smallest businesses and consumers, who will find themselves 
able to take advantage of many of the technologies and efficiencies 
available only to the largest of firms.
  Even now, consumers are realizing the time and cost benefits of 
electronic commerce at a rapidly escalating rate. On-line catalogs are 
everywhere, all the time, and always in competition to provide the best 
service at the lowest price. And for the average family in America, on-
line lending and real estate brokerage services are making the most 
significant of all purchases--the purchase of a family home--available 
over the Internet. Changes to home-buying over the near term will be 
dramatic. Rapid document and service delivery will reduce a transaction 
typically measured in days or weeks to minutes or hours, and the 
ability of a consumer to quickly assess the rates offered by scores of 
lenders will increase competition and lower mortgage costs and rates 
for every consumer. Mr. President, Franklin Raines, the Chairman and 
CEO of Fannie Mae, told an investor conference in May that ``. . . the 
application of electronic commerce to the U.S. mortgage finance 
industry should help the U.S. homeownership rate reach 70 percent over 
the next decade.'' Mr. President, and Chairman Raines, I look forward 
to that future.
  But for e-commerce to continue growing, we must have a consistent, 
predictable, national framework of rules governing the use of 
electronic signatures and records. Current legal inconsistencies are 
deterring businesses from fully utilizing electronic signature 
technologies. And the ability of one court, in one jurisdiction, to 
rule against the validity of a contract solely because of its 
electronic form threatens to destabilize the entirety of electronic 
commerce--bringing down the whole house of cards.
  The National Conference of Commissioners on Uniform State Law has 
developed a uniform system for the use of electronic signatures. Their 
product, the Uniform Electronic Transactions Act, or UETA, is an 
excellent piece of work and I look forward to its enactment in all 
fifty states. But as some state legislatures are not in session next 
year, and as other states face more immediately pressing issues, it 
will likely take three to four years for all the states to enact the 
UETA.
  That is a long time in the high-technology sector--far too long to 
permit, when this Congress possesses the ability to bridge the gap.
  With this in mind, Mr. President, in November of 1998--shortly after 
the passage of the first electronic signature legislation, the 
Government Paperwork Elimination Act, which I also co-authored with my 
friend, Senator Wyden--I initiated a series of discussions with both 
industry and states for the purpose of developing a plan to foster the 
continued growth of electronic signatures and electronic commerce. In 
January of 1999, my staff had produced draft legislation which I 
invited Chairman Bliley to consider introducing in the House of 
Representatives. Over the next several months, Senator Wyden and I 
worked with Republicans and Democrats in both chambers to refine this 
legislation. On March 25 of 1999, Senators Wyden, McCain, Burns, Lott, 
and I introduced the ``Millennium Digital Commerce Act'' (S. 761); 
Representative Anna Eshoo introduced the House companion later that 
day. My staff continued to consult with Chairman Bliley in order to 
refine our substantive approach to this issue, and his electronic 
signature legislation, H.R. 1714, was introduced on May 6, 1999. As I 
noted, S. 761 was the first electronic signature bill introduced in the 
106th Congress. Thanks to the gracious assistance of Chairman McCain, 
our bill received its first hearing in the Senate Commerce Committee on 
May 27 of last year. On June 23 it was passed out of the Commerce 
Committee on a unanimous 19-0 vote. I would note that the version of 
the bill passed out by the Committee included provisions regarding both 
electronic signatures and electronic records.
  During the fall of 1999, we made several attempts to pass this bill 
by unanimous consent agreement in the Senate, but unfortunately, we 
were unable to proceed because several Members had concerns relating to 
the inclusion of electronic records in the legislation. Given our need 
to accommodate the Senate's schedule, we made a decision to pass a 
substitute bill that excluded the records provisions, and the Abraham-
Wyden-Leahy substitute amendment passed the Senate unanimously on 
November 19, 1999.
  At the time the Senate passed S. 761, Senator Lott and I made clear 
our intention to work for inclusion of electronic records provisions in 
the final bill. I am pleased to say that with much effort, the bill is 
being passed today as conceived nearly two years ago--granting legal 
certainty to both electronic records and signatures.
  Mr. President, at this point I would like to speak to several of the 
key principles of this legislation, which I believe will provide the 
legal framework needed for the continued growth of e-commerce.
  The general rule of this legislation ensures the legal certainty of 
e-commerce in very clear, targeted terms: ``a signature, contract, or 
other record 
. . . may not be denied legal effect, validity, or enforceability 
solely because it is in electronic form''.
  Mr. President, the word ``solely'' is pivotal in this context: it 
means that electronic writings are not to be discriminated against, but 
instead are to be judged according to existing principles of contract 
law.
  With this language, the ``achilles heel'' of all of e-commerce is 
protected--the ``electronic'' nature of a contract will not be used to 
attack the validity of a contract.
  Mr. President, I view this as my single most important contribution 
to the future of electronic commerce, and would like to thank Senators 
McCain, Wyden, Gramm, and Hatch for their counsel and support in 
writing this section of the legislation.
  This section of the legislation was added to ensure that no ambiguity 
existed with respect to our treatment of existing contract law. 
Although we strongly believe that our General Rule is formulated in the 
least onerous incarnation, Section 101(b) clarifies that principles of 
contract law, which have been established over a millennium of 
commerce, remain in effect and should continue to guide transactions 
nationwide. It is the strong belief of the conference that the decision 
whether or not to participate in electronic commerce is completely 
voluntary, and if the parties decide to do so, the bill grants parties 
to a transaction the freedom to determine the technologies and business 
methods to employ in the execution of an electronic contract or other 
record.
  Under the consent provisions, a consumer must affirmatively consent 
to the provision of records in electronic form, and there must be a 
reasonable demonstration that the consumer can access electronic 
records. For the immediate future, the conference envisions this 
``electronic consent'' to take the form of either a web-page based

[[Page 10969]]

consumer affirmation, or a reply to a business' electronic mailing 
which includes an affirmation by the consumer that he or she could open 
provided attachments. I eagerly await future technology developments 
that render the burdens this section imposes on consumers and 
businesses obsolete.
  This provision, in combination with the simple fact that the use of 
electronic records by a consumer and right to contract generally are 
completely voluntary, should ensure that no consumer will be forced by 
any business to accept any electronic document that the consumer does 
not wish to receive.
  It is well worth noting that the term ``consumer'' does not include 
business-to-business transactions, which will allow businesses to take 
full advantage of the efficiency opportunities presented by this 
legislation.
  As I have noted, the central purpose of this legislation is to 
establish a nation-wide baseline for the legal certainty of electronic 
signatures and records. The States themselves have recognized the need 
for uniformity in laws governing e-commerce, and in July of last year, 
the National Conference of Commissioners on Uniform State Law (NCCUSL) 
reported out model legislation designed to unify state law in a market-
oriented, technology-neutral approach. I believe that the eventual 
adoption of UETA by all 50 states in a manner consistent with the 
version reported by NCCUSL will provide the same national uniformity 
which is established in the Federal legislation. For that reason, and 
at my insistence, when a state adopts the ``Uniform Electronic 
Transactions Act'' (UETA) as reported by NCCUSL, the federal preemption 
provided in this bill is superceded. In the meantime, the preemption 
contained in the Federal Act will ensure a uniform standard of legal 
certainty for both electronic signatures and electronic records.
  Mr. President, I would like to address two additional points related 
to preemption. First, UETA includes a provision that permits a state to 
prescribe ``delivery methods'' for various records. I saw this as a 
potential loophole to the bill, which would allow a state to circumvent 
the intent of the general rule and require that an electronic document 
be delivered via physical methods--most likely ``first class'' mail. It 
should be clear to all that the federal legislation would not permit 
such a delivery method requirement, and we have specified as much in 
the preemption section. Second, I believed that the House version of 
the preemption was unnecessarily overbroad, and went so far as to 
seriously hamper the ability of a state or local government to perform 
those governing functions entrusted to it by the citizens. I am pleased 
that the conference agreed with my opinion, and that the language was 
changed in response.
  The ``consumer protection'' provisions of this legislation specify 
that any notice of product recalls or cancellation, or termination of 
utility services, among other items, are to be excluded from the scope 
of this legislation. This means, of course, that the validity of these 
notices may be denied solely because they are in electronic form. I 
hope that industry does not shy away from providing these notices 
electronically--as well as in paper--as it seems to me that electronic 
``anyplace, anytime'' notification of a product recall or utility 
shutoff would be extremely valuable. Especially to a resident of 
northern Michigan on business or vacation travel, whose furnace was 
subject to recall during the dead of winter.
  Mr. President, because of the benefits of ``anyplace, anytime'' 
notice--and especially in light of the strong consent provisions in the 
bill--I believe consumers should be free to choose to receive any type 
record electronically, even those expressly precluded in this 
legislation. I hope the appropriate regulatory agencies will utilize 
the authority granted in this bill to allow all records, even those 
precluded from electronic transmission by this legislation, to be sent 
electronically.
  The Legislation does not prevent states from establishing standards 
for electronic transactions with their constituents. Just as the 
Government Paperwork Elimination Act provided the Federal government 
the authority to set standards for electronic regulatory filing and 
reporting, so too should the States have the ability to set standards 
for electronic submission with a State or political subdivision. And, 
like any business, the Federal government and the States also have the 
ability to establish procedures and standards for procuring goods and 
services online.
  The bill directs the Department of Commerce and Office of Management 
and Budget to report on Federal laws and regulations that might pose 
barriers to e-commerce and report back to Congress on the impact of 
such provisions and provide suggestions for reform. Such a report will 
serve as the basis for Congressional action, or inaction, in the 
future.
  This was one of the final sections of the language to be modified in 
response to my concerns. The original proposal by the Administration to 
deny legal validity for records required to be retained by Federal or 
State law or regulation until October 1, of 2001 was, in my opinion, 
needlessly excessive and punitive to those consumers and businesses 
prepared to leap now into the electronic age. I maintained that Federal 
and State agencies should be provided only six months time to develop 
standards to ensure document validity and integrity, so as to not 
inappropriately burden the private sector. Objective individuals 
outside the process with experience in developing and implementing 
regulations at the Federal and State level assured me that six months 
was feasible. In the end, however, we effectively agreed upon an eight-
month delayed implementation. And finally, language which House 
negotiators insisted upon which would have needlessly created an uneven 
playing field for the financial services industry was also dropped at 
my request.
  Since the Internet is inherently an international medium, 
consideration must be given to the manner in which the U.S. will 
conduct business with overseas governments and businesses. This 
legislation therefore sets forth a series of principles for the 
international use of electronic signatures. In the last year, U.S. 
negotiators have been meeting with the European Commissioners to 
discuss electronic signatures in international commerce. In these 
negotiations, the U.S. Department of Commerce and the State Department 
have worked in support of an open system governing the use of 
authentication technologies. Some European nations oppose this concept, 
however. For example, Germany insists that electronic transactions 
involving a German company must utilize a German electronic signature 
application. I applaud the Administration for their steadfast 
opposition to that approach. This bill will bolster and strengthen the 
U.S. position in these international negotiations by establishing the 
following principles as the will of the Congress:

  One, paper-based obstacles to electronic transactions must be 
eliminated.
  Two, parties to an electronic transaction should choose the 
electronic authentication technology.
  Three, parties to a transaction should have the opportunity to prove 
in court that their authentication approach and transactions are valid.
  Four, the international approach to electronic signatures should take 
a non-discriminatory approach to electronic signature. This will allow 
the free market--not a government--to determine the type of 
authentication technologies used in international commerce.
  Mr. President, it is my hope that adoption of these principles will 
increase the likelihood of an open, market-based international 
framework for electronic commerce.
  Mr. President, two years ago I believed that if we, as a body, could 
maintain a spirit of bipartisanship and a strong commitment to 
principles of free commerce, that we were poised to produce the 
landmark accomplishment of this Congress. Well we took these 
commitments seriously, and I believe our work product will be hailed 
for generations to come as the grounds upon which the dream of a 
prosperous

[[Page 10970]]

new economy became a reality--and well beyond our expectations.
  I am pleased to say that we have already begun work on the next 
legislative effort to help this nation shift to the electronic world, 
addressing the apportionment of liability for violations of duty and 
trust, and the protection of information and user confidentiality in 
electronic commerce. Mr. President, I welcome the help of my colleagues 
who have been with me in the effort to protect electronic signatures 
and records, I look forward to again working closely with the states 
and industry, and I hope to deliver to the American public 
corresponding legislation that is as well-contemplated and effective as 
S. 761 in the next Congress.
  Before I close, there are a number of individuals whom I would like 
to thank for their hard work, and without exception, for their 
endurance. First, I would like to recognize Chairman McCain for his 
assistance and dedication to this effort. The Chairman was one of the 
original cosponsors of this legislation, and lent a great deal of 
support well before any of the current attention was being paid to the 
issue of the legal certainty of electronic commerce. Senator McCain's 
constant momentum eliminated many obstacles over the past 18 months and 
kept this process moving forward.
  Without his efforts and those of Mark Buse and Maureen McLaughlin of 
the Senate Commerce Committee staff, I certainly wouldn't be making 
this statement today.
  I would also like to sincerely thank my friend, Senator Phil Gramm, 
Chairman of our Banking Committee, whose dedication to those important 
principles of economic freedom was a key ingredient in guiding our 
legislation through the past year and a half.
  The expertise which he and his staffers Geoff Gray and Wayne 
Abernathy brought to the table was absolutely indispensable. Senator 
Gramm ensured that this legislation's propound impact on the financial 
services industry will be a positive one.
  I also want to acknowledge our Judiciary chairman, Senator Hatch, who 
I understand will not be participating in the final vote on this 
legislation tomorrow due to another commitment, but he and his staff 
likewise worked very closely with us throughout this effort.
  The support and counsel of Senator Wyden, my partner in introducing 
this bipartisan bill last year, has also been essential to bridging the 
conceptual differences between colleagues on both sides of the aisle. 
Despite the different approaches we occasionally endorsed, I could 
always count on his sincere efforts to find common ground on this 
legislation. Senator Wyden and his legislative director, Carole 
Grunberg did yeoman's work on this bill, and for that I wish to express 
my true appreciation.
  I also commend Senator Pat Leahy and his counsel, Julie Katzman for 
their contributions to this bill. Indeed, we worked hard in putting 
together the ingredients that made up the Senate version of this 
legislation, the final amendment which was adopted by the Senate when 
we passed this last year. Senator Leahy's continuing interest, 
involvement, and support were very important to our success.
  I must also express my gratitude to the Senate leadership for their 
patience as well as their persistence in moving this legislation. I 
truly appreciate the assistance of Dave Hoppe, Jack Howard, Jim 
Sartucci, and Rene Bennett of the Senate Majority Leader's staff.
  I would also like to give thanks to Massachusetts Governor Paul 
Cellucci for his assistance and support through the process of drafting 
this legislation. Massachusetts should be proud of the work done by 
their Governor and his staff on this bill, especially the Governor's 
Special Counsel for e-commerce, Daniel Greenwood, to assure that state 
and federal law governing e-commerce are complimentary.
  Finally, I would like to recognize the efforts of three members of my 
own staff who are here tonight. My legislative assistant, Kevin 
Kolevar, my Judiciary Committee Counsel, Chase Hutto, and my 
Administrative Assistant Cesar Conda.
  I thank them for their tireless efforts and loyalty, and recognize 
they possess both the tremendous vision necessary to conceive of this 
legislation back in November of 1998, and the dedication to bring it to 
the point of final passage today.
  I would just indicate that without these three gentleman and their 
hard work, numerous impasses that seemed to have doomed this 
legislation would not have been surmounted. Their willingness to 
creatively examine the problems we were confronting and come up with 
new approaches that offered all the participants an opportunity to work 
together to find a common ground were absolutely indispensable to this 
success. I certainly can attest to the long hours that were put in by 
these individuals to make sure that we completed this project and that 
we are in a position to pass this legislation.
  As people look back on this effort, and I think they will with a 
sense that this was an important achievement, all three of these 
individuals will be accorded the praise they deserve for their efforts.
  In closing, let me urge my colleagues to support final passage of the 
conference report tomorrow morning. I believe that we are passing a 
very important, landmark piece of legislation that will provide a 
stimulus to the new economy the likes of which we have not previously 
seen. I believe it is one of the most important steps we can take as a 
Congress to remove some of the barriers and impediments that might 
prevent us from fully enjoying the benefits of the new technologies, 
and I believe that as it becomes the law of the land, and subsequently 
as it is used as a basis for the entering into of transactions through 
e-commerce, we will look back on these achievements with great pride. I 
am happy to have been part of it. I thank all of my colleagues who made 
this possible.
  Mr. ROBB. Mr. President, I rise today in strong support of the 
conference report on the Millennium Digital Commerce Act, a bill which 
I believe will help us remove one of the most imposing barriers to the 
growth of electronic commerce--the lack of a way to verify the validity 
of contracts entered into over the web.
  As the Internet becomes more ubiquitous in society and the lines 
between paper and electronic worlds blur, it is crucial that we find 
ways to adapt older regulatory structures such as contract law to the 
new world of Internet commerce. By providing a framework for digital 
signatures, the Millenium Digital Commerce Act will do just that, and 
I'm pleased that we're about to send it to the President's desk for 
signature.
  I'm particularly pleased that the conferees were able to work through 
some of the complicated consumer protection issues on this bill. 
Throughout the conference negotiations, there were those who suggested 
that we should use this bill to relax some of our most important 
consumer protection laws. I appreciate the efforts of Senators Leahy, 
McCain, Abraham and others in working to temper these efforts, and 
believe that the final product is much better for it.
  While I strongly support this legislation, I regret that a prior 
commitment will prevent me from being here tomorrow to vote in favor of 
it. In my absence, I urge each of my colleagues to support this 
landmark agreement, which will help the Internet realize its full 
potential.
  Mrs. BOXER. Mr. President, last night the other body overwhelmingly 
approved the conference report accompanying S. 761, the Electronic 
Signatures in Global and National Commerce Act, by a vote of 426-4. The 
Senate is expected to take the report up soon.
  I support the conference report on S. 761 because paper-less 
transactions will give our Information Age economy a boost, and allow 
persons to shop for goods and services once unavailable on the 
Internet.
  The ability to make binding contracts online, that reach across state 
borders, will drive down transaction costs. The financial industry 
alone expects to save millions of dollars a year due to efficiencies 
derived from electronic signatures.

[[Page 10971]]

  Consumers will save money and time, also. With electronic signatures 
persons will no longer need to sign certain contracts in person or 
communicate via mail. Now, persons will be able to enter into contracts 
and purchase items, like care loans, from the comfort of their own 
homes. Certainly, consumers will save money with this new level of 
competition, and save time conducting their daily affairs.
  As people are able to conduct more and more business transactions 
online, I think we'll look back one day and try to remember what it was 
like without electronic signatures.
  Mr. President, I look forward to this bill becoming law.
  Mr. GRAMM, Mr. President, I rise today in support of the conference 
report on S. 761, the Electronic Signatures in Global and National 
Commerce Act, also known as the E-SIGN bill. The bill establishes a 
uniform national standard for treating electronic signatures, contracts 
and disclosures are legally binding in the same way that physical 
signatures, paper contracts and paper disclosures are legally binding. 
The bill will allow American businesses to become more efficient and 
productive through use of the Internet and other forms of electronic 
commerce, rather than being forced to use paper for all binding 
agreements. Further, it will expand for consumers everywhere the 
availability of products and services as well as permit tremendous time 
savings. With consumers no longer bound by expensive and time-absorbing 
requirements to complete transactions through the mail or in person, 
consumer costs will decline and choices will grow. Working from home 
computers, people will increasingly be able to pay bills, apply for 
mortgages, trade securities, and purchase goods and services wherever 
and whenever they choose. The reach of the consumer will extend around 
the globe.
  Mr. President, Senator Spencer Abraham deserves the lion's share of 
the credit for this legislation. He began this process back in 1998, 
fathering not only the Senate bill, but subsequently generating 
interest on the House side. He continued providing technical and 
drafting assistance throughout the process. Without Senator Abraham's 
persistence, and his clear, constant vision of what we need to 
accomplish, there would be no bill.
  This legislation will have a profound impact on the financial 
services industries. ``Electronic records'' is the term in the 
legislation that would encompass the disclosures that banks and other 
financial services companies must provide to consumers. Unlike the 
Senate bill, the House-passed bill included references to ``electronic 
records'' throughout the provisions of the bill. By including 
electronic records along with electronic signatures, the House bill 
extended the scope of the bill to cover disclosures required under 
various laws and regulations.
  Far more than other industries, financial services companies such as 
banks, insurance companies and securities firms are impacted by these 
disclosure laws. Not only these industries, but these disclosure laws 
themselves fall under the jurisdiction of the Banking Committee. I am 
pleased that members of the Banking Committee were able to serve on the 
conference committee to ensure that these provisions were drafted in an 
appropriate and workable fashion.
  There remain some problems with the bill, but I do not believe them 
to be overwhelming. There are those who are fearful of the electronic 
market place, and that fear found its expression in the debates in the 
conference committee. It found its expression in provisions in this 
bill that apply standards to electronic commerce that are not applied 
to paper commerce. That is not unusual. Every major technological 
advance has met with fear before its full benefits were embraced. It 
may seem odd, but not over one hundred years ago there was a very 
spirited congressional debate about whether it was safe to buy an 
automobile for transporting the President. Voices were loudly raised in 
Congress that automobile transportation was not safe, that it was too 
risky to let the President be transported in anything other than a 
horse-drawn carriage. Governments passed restrictions on automobile use 
that should silly to us today.
  I believe that many of the fears that have been raised about 
electronic commerce will very soon sound silly. In fact, many of them 
do not make much sense today. That is why I am pleased that this 
legislation will allow the regulators to remove many of these onerous 
restrictions if the fears prove unfounded, as I expect that they will. 
And as I expect the fear to prove unfounded, I expect the regulators to 
act vigorously to remove unnecessary restrictions and requirements. 
Electronic commerce should labor under no greater regulatory 
restrictions than does the quill pen, if this is to be a system for the 
twenty-first century.
  We will watch very closely the development of electronic commerce. If 
this legislation proves to put an unnecessary burden on electronic 
commerce, and if the regulators fail to act, or if legislation is 
needed, we will then take vigorous action in the Congress to correct 
the situation and make the purposes of this legislation a reality.
  Mr. LAUTENBERG. Mr. President, this bill includes a critical measure 
to make .08 the national drunk driving standard.
  Chairman Shelby and I both care deeply about improving transportation 
across this country, but we also share a commitment to making sure our 
transportation systems are as safe as possible. One of the most 
important things we can do to keep our families safe on our nation's 
roads is to keep drunk drivers off those roads.
  Mr. President, the Senate already voted in favor of the .08 standard 
in 1998. The Senate overwhelming passed the Lautenberg-DeWine .08 
amendment to TEA-21 by a vote of 62-32.
  But, ultimately, the American public did not get the safety 
legislation that they deserved when a national .08 standard was not 
included in the final TEA-21 conference report that was sent to the 
President.
  The TEA-21 conference report removed the Senate-passed .08 standard 
and replaced it with an incentive grant program, that, while well 
intentioned, frankly is not working. Only two states have passed .08 
BAC since TEA-21 was enacted two years ago and it seems very unlikely 
that any other state will be motivated by the incentive grants over the 
next few years.
  Mr. President, we have learned with other effective drunk driving 
legislation such as the minimum 21 drinking age and zero tolerance that 
weak incentive programs do not work--but national standards do.
  I would assure my colleagues that the .08 provisions in this bill 
today do not alter the TEA-21 incentive grant program. So if your state 
is receiving incentive grant funds, you will continue to receive every 
cent you are entitled to under the current program.
  For over a decade--in both Republican and Democratic Administrations, 
the National Highway Traffic Safety Administration has been telling 
Congress that the .08 standard is the best way to ensure safety on our 
roads and lower the number of fatalities which result from drunk 
driving.
  In fact, the National Highway Traffic Safety Administration (NHTSA) 
estimates that a national .08 standard will save approximately 500 
lives per year.
  Make no mistake--drivers at .08 are drunk and should not be on the 
road. According to NHTSA, at .08, drivers are impaired in their ability 
to steer, brake, change lanes, use good judgment and focus their 
attention.
  Their ability to perform these critical tasks may decrease by as much 
as 60 percent.
  We must keep these drivers off the road in order to keep our families 
safe.
  I am grateful to my colleagues for including the .08 provisions in 
this bill today. Now we look to the House of Representatives to follow 
our lead and work with us to produce a conference report that retains 
this critical safety legislation.
  I yield the floor.
  Mr. HOLLINGS. Mr. President, I rise to speak in favor of the passage 
of the conference report on S. 761, the electronic signatures bill. 
This legislation was originally considered and reported

[[Page 10972]]

by the Commerce Committee. The initial purpose of the legislation was 
to legalize the use of digital signatures for contracting 
electronically, mostly via the internet. The States for several years 
had been working on adopting a model law--the Uniform Electronic 
Transaction Act (UETA)--which was to be adopted by the States for the 
purpose of creating uniformity. This process was to be akin to the 
adoption of the Uniform Commercial Code (UCC). However, a number of 
industries, most notably those in the high-tech field, felt that it 
could take years for all States to adopt the model law. Thus, they 
sought Federal preemption. Bills eventually were introduced in both 
Chambers. Senator Abraham introduced the legislation in the Senate, and 
Congressman Bliley introduced legislation in the House (H.R. 1714).
  As noted, the Senate bill--introduced on March 25, 1999--was referred 
to and considered by the Commerce Committee. After holding a hearing on 
May 27, 1999, the committee reported the bill on June 23, 1999. At that 
time, we were advised that the general purpose of the bill was to 
establish a Federal temporary and backup law, so as to ensure the 
national use of electronic signatures until the model law was adopted 
by the States.
  During the committee's consideration of S. 761, I indicated that I 
did not have a problem with establishing uniformity; however, because 
the legislation ultimately affects State contract law, I was concerned 
about preserving the right of States to adopt their own laws, given 
that States already were working on the adoption of a model law. In the 
field of commercial law, the States had a similar experience with the 
UCC. Thus, I saw no reason to prevent the States from adhering to the 
same process with respect to digital signatures. I made it clear to 
Senator Abraham that I would not support the bill--in fact, that I 
would seek to block its passage--if the legislation did not preserve 
the autonomy of States to adopt the model law that they were 
considering. I also sought to make sure States were able to adopt the 
model law in a manner consistent with their consumer protection laws. 
Senator Abraham and I were able to come to an agreement so as to ensure 
that the legislation, as reported by the committee, was consistent with 
these principles. The legislation was unanimously reported by the 
committee on June 23, 1999.
  Once reported, Senator Leahy worked to procure a number of changes 
designed to ensure the non-applicability of the bill to certain 
agreements, including marital and landlord tenant relationships. The 
legislation was passed by the Senate on November 19, 1999.
  I should note that before final passage of the bill, I objected to 
its passage by unanimous consent because of the inclusion of language 
providing that the legislation applied to the business of insurance. I 
objected because that language was not in the Senate bill as reported 
by the Commerce Committee, but more significantly, I objected because 
insurance companies are regulated by the States. Because the matter had 
not been addressed by the Commerce Committee, and because insurance is 
under the jurisdiction of the Commerce Committee, I wanted some 
clarification on the issue, and assurance that the issue of State 
insurance regulation would be addressed in the legislative conference 
on the bill. Senator Abraham, through a colloquy, agreed that the issue 
would be addressed during conference discussions.
  The House bill--H.R. 1714--was passed last November as well. It, 
however, was more extensive, and severe, than the Senate bill. It did 
not provide regulatory flexibility to the States to allow them to adopt 
the model law in conformance with their consumer protection laws; it 
included provisions regarding Government electronic filing and record 
keeping--which was beyond the original purpose of the legislation; and 
provisions specifying the manner in which consumers' consent could be 
obtained for the use of electronic signatures. Reservations and 
opposition to the bill were heard from state officials and the consumer 
community.
  These groups had a right to be concerned about the bill. The 
legislation, pursuant to its ``consent provisions'' would have allowed 
consumers to be easily induced into giving their consent to contract 
electronically, even if they didn't own or have access to a computer. 
In other words, pursuant to certain inducements by a commercial 
entity--i.e., through an offer that the consumer could get the product 
cheaper if he or she agreed to a transaction electronically--consumers 
could have been placed in positions whereby they walked away from a 
commercial agreement in person without any paper or documentation and 
potentially no means of accessing the actual contents of the agreement 
later, including any additional notices or disclosures they're required 
to receive with consumer purchases. With respect to the record 
retention requirements that states impose on commercial entities, such 
as insurance companies, the legislation, would have substantially 
undermined the ability of States to ensure that businesses retained 
important documents, such as financial statements and records, and that 
States retained access to those documents.
  The conference discussions on the bill began between the Senate and 
House immediately after the Senate conferees were appointed in March of 
this year. Subsequently, however, the majority staff of the Senate and 
House began to convene among themselves. On May 15, the majority 
presented a draft conference agreement to the Democratic Members. After 
reviewing the document, I made it clear that not only would I not 
support the proposal, but if offered up, I would do all I could to kill 
the measure. I should note, however, that every other Democratic Member 
of the conference--Senators Leahy, Sarbanes, Wyden, Kerry, Inouye, and 
Rockefeller as well as Congressman Dingell and Congressman Markey--in 
addition to the administration, opposed the measure. In light of this 
opposition, the majority Members, and the high-tech industry, knew they 
would not achieve passage of the proposal.
  The problems with the draft include the following:
  Similar to the House bill, it would have allowed businesses to induce 
consumers into signing and consummating contracts electronically even 
in face to face transactions. Consequently, a person could walk away 
from a major agreement without any paperwork. The actual agreement 
would have been e-mailed to the purchaser. In that situation, however, 
the consumer would have no way of proving that the document that he or 
she received by e-mail is the deal that he or she actually agreed to. 
Moreover, there would be no paperwork on warranties and no guarantee 
that a person could access the documents if that person doesn't own a 
computer or doesn't have the proper computer software of hardware.
  Additionally, the draft provided that after a consumer consented, in 
the event a company changed the hardware or software that prevented the 
consumer from receiving or reviewing the document, the burden would 
have been on the consumer, not the company to purchase the correct 
hardware and software.
  The draft also included the onerous record retention provisions of 
the House bill.
  After the draft was rejected by the Democratic Members, I suggested 
to my friend, Tom Bliley, the chairman of the conference, that the only 
way a bill was going to pass this year was that it had to be an 
agreement of a bipartisan nature. Given that Congressman Bliley's bill 
was so far different from where most Democrats were, I knew that if we 
could come to an agreement, we could achieve a bipartisan measure. He 
agreed. I suggested that he meet with a group of Democratic Members and 
the representatives of the administration to develop a bipartisan draft 
to present to the conference. He agreed to this recommendation as well. 
Subsequently, his staff met with Democratic staff members and 
representatives of the administration and eventually constructed a 
bipartisan conference draft. That document included major revisions of 
the consumer consent, preemption and

[[Page 10973]]

record retention provisions. Those provisions provided significantly 
more protections to consumers and protections of state regulatory 
authority.
  When the draft was first presented to the conference, there were 
objections. However, it led to a second bipartisan discussion between 
the Democratic Members, along with the Administration and the two 
Republican principals, Congressman Bliley and Senator McCain--who also 
recognized the need for a bipartisan consensus. Through the efforts of 
Senator McCain, we eventually were able to agree on a final draft of 
the bipartisan measure.
  I am proud to say that the final conference report includes major 
protections for consumers and the States. Does it include all I would 
have liked for it to? Of course not. However, it does represent a 
commendable effort by Republican and Democratic conferees to put forth 
a law that accomplishes the original goal of establishing a legal 
framework for the new digital world, while maintaining important 
protections for American consumers. I have joined with Senators 
Sarbanes and Wyden introducing an explanatory statement of the 
legislation, which details how the bill affects consumers and State 
governments. I would, however, like to highlight a few important 
provisions:
  (1) The agreement ensures that consumers, when giving consent to do a 
transaction electronically, before their consent can be valid, must be 
informed of their right to receive records in paper, and of the right 
to withdraw their consent once given, and that there be some 
demonstration that the consumer can actually access and retain the 
document.
  (2) It ensures that consumers are able to withdraw consent to receive 
their required notices under the contract in the event the provider 
changes the hardware or software in a manner which prevents the 
consumer from accessing and retaining the document, without costs and 
fees.
  (3) It preserves state unfair and deceptive trade practices laws, so 
as to ensure that the use of electronic signatures and electronic 
transactions cannot be used to evade the requirements and prohibitions 
of these laws.
  (4) It preserves important aspects of Federal and State record 
retention laws and requirements, and gives States some reasonable time 
to conform their regulations in light of the legislation's affirmation 
of electronic record retention by regulated industries.
  Mr. President, I would like to commend Congressman Bliley, and 
Senator McCain for their efforts to forge an agreement on the 
legislation. I also want to commend all my Democratic colleagues and 
their staff, and the representatives of the administration for their 
admirable work on this legislation.
  Mr. SARBANES. Mr. President, I am very pleased to be able to bring to 
the floor of the Senate this conference report of S. 761, the 
Electronic Signatures in Global and National Commerce Act, along with 
my colleagues from the Commerce and Judiciary Committees.
  First and foremost, the success of this effort is the result of the 
leadership of Chairman Bliley and Chairman McCain. Their commitment to 
working in a bipartisan manner ultimately carried the day.
  I also want to thank Senator Hollings, Senator Leahy, Senator Wyden, 
and Representative Dingell. Without the leadership exhibited by these 4 
members, and the long hours, hard work, and dedication of their key 
staff (Moses Boyd, Kevin Kayes, Julie Katzman, Carol Grunberg, Consuela 
Washington, and Bruce Gwinn) we would never have reached this 
agreement.
  Finally, the Administration, through its representatives from the 
Commerce and Treasury Departments (Andy Pincus and Gary Gensler), as 
well as the White House (Sarah Rosen-Wartell), played a crucial and 
constructive role in putting together the package we have before us.
  Mr. President, I support this bipartisan conference report. This new 
law creates a solid legal foundation upon which electronic commerce can 
grow and prosper, with benefits for many consumers and businesses.
  It is apparent to all of us that more and more business will be done 
on-line in the future, and that this will be true both for business-to-
business commerce and for consumer transactions.
  We need to be mindful, however, that while this trend will likely 
continue, many Americans do not today participate in the electronic 
world. Indeed, they cannot participate in this world in any meaningful 
way.
  To make this point, I want to share with my colleagues the findings 
of a July, 1999 Commerce Department report entitled ``Falling Through 
the Net: Defining the Digital Divide.''
  First, about 70 percent of Americans do not yet have access to the 
internet;
  Urban households with incomes of $75,000 and higher are more than 
twenty times more likely to have access to the internet than rural 
households at the lowest income levels and they are more than nine 
times more likely to have a computer at home;
  Whites are more likely to have access to the internet from home than 
Blacks or Hispanics have from any location;
  Regardless of income level, Americans living in rural areas lag on 
internet access. At the lowest income levels, those in urban areas are 
more than twice as likely to have access than rural families with the 
same income.
  These facts are alarming. More distressing, is the fact that, as bad 
as these numbers are, the trends are moving in the wrong direction. The 
Commerce Department reports that the digital divide is actually 
growing.
  For example, the gap between white and minority households has grown 
5 percentage points in just one year, from 1997 to 1998.
  The gap, based both on education and income increased by 25 and 29 
percent in the past year, respectively.
  These dramatic and disturbing findings underline the importance of 
ensuring that, as we move to an electronic world, we make sure that 
longstanding consumer protections survive the transition. Many of us 
made clear from the beginning that our goal was to ensure equivalent 
consumer protections for transactions conducted in the paper and 
electronic worlds. We have largely achieved that goal.
  First among these protections is the common sense provision 
incorporated in the report that consumer consent to engage in 
electronic commerce be given electronically. This is a protection 
against unscrupulous and abusive practices as well as inadvertent 
mistakes by well meaning vendors.
  Electronic consent will greatly enhance the consumer confidence to do 
business on-line, without resulting in additional burden on 
businesses--they are, after all, already committed to communicating 
with the consumer electronically.
  The best demonstration of the importance of electronic consent is the 
fact that the initial conference draft that was provided to Conferees 
was circulated via e-mail. Yet, despite the fact that our staff is more 
technologically sophisticated than the average American consumer, many 
of them were unable to download the document and had to have paper 
copies hand delivered.
  Now, imagine if that was a notice of change in mortgage servicing, or 
a notice that health insurance benefits are being cut back, or that 
auto insurance is being cancelled. That family could very well find 
itself with a sick child on no health insurance.
  Electronic consent would have avoided that problem by ensuring that 
the consumer is able to read the records provided.
  Electronic consent is not, as some people have sought to portray it, 
relevant only for a transitional period. Compatibility among systems is 
always important to check, given the significance of the records being 
transmitted. In addition, the U.S. mail is free to receive and comes to 
your door. You do not need a computer to receive the mail. You do not 
need to pay for an internet service provider, and you do not need to go 
to a public library to fain access to a computer if you don't have one 
at home. For all these reasons, electronic consent will be as important 
in the future as it is today.

[[Page 10974]]

  Other concerns I had have also been addressed in this report.
  We have provided both federal and state agencies with the authority 
to interpret and issue guidance on the proposed law. Providing this 
interpretive authority will provide businesses with a cost-effective 
way of getting guidance in how to implement the new law. Without this 
authority, these questions would have to have been answered by the 
courts, after extensive and expensive litigation. We have avoided that 
problem.
  The conference report gives law enforcement agencies of federal and 
state governments the authority they need to detect and combat fraud, 
including the ability to require the retention of written records in 
paper form if there is a compelling governmental interest in law 
enforcement.
  Let me raise one specific example, among many, of where this 
provision ought to be exercised. The Securities and Exchange Commission 
should use this provision to require brokers to keep written records of 
agreements required to be obtained by the SEC's penny stock rules. 
Investors in the securities markets have been the victims of penny 
stock abuse for more than a decade. The SEC must exercise every tool at 
its disposal to fight this kind of fraud.
  Finally, we narrowed the scope of the legislation to ensure that 
certain notices that simply cannot effectively be made electronically, 
such as documents carried by vehicles hauling hazardous materials, will 
continue to be in paper form.
  As many of you know, it was not at all clear that we were going to be 
able to deliver this bipartisan, largely consensus product to the 
floor. There were many times when negotiations threatened to unravel.
  But we stuck to it; we continued to show a willingness to consider 
and reconsider many issues that came up, even after agreement on many 
of those issues was achieved. Eventually, we were able to close the few 
remaining gaps and come to a final compromise.
  Mr. President, these changes make this a good piece of legislation 
worthy of our support. I urge all my colleagues to do so, and, once 
again, commend the leaders who brought this effort to a successful 
conclusion.
  Finally, I ask unanimous consent to insert for the Record some more 
specific observations on a number of provisions of the legislation on 
behalf of Senator Hollings, Senator, Wyden, and myself. I think this 
will be helpful given the fact that no statement of managers was 
included with the final legislation.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   Statement of Senators Hollings, Wyden, and Sarbanes Regarding the 
       Electronic Signatures in Global and National Commerce Act

       We want to make a number of points about some of the 
     important provisions in the Act we are passing today.
       1. Scope of Requirement. Section 101 (a). In recommending 
     that the Senate vote to pass this legislation, we 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 
     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. Companies and consumers should only be 
     able to agree to reasonable electronic signature 
     technologies. As the definition of the electronic signature 
     makes clear, the electronic signature is only valid under 
     this Act if the person intended to sign the contract. A 
     person accepting an electronic signature should have a duty 
     of care to determine if the signature really was created by 
     the person to whom it is attributed.
       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. As a result, laws or 
     regulations or common law rules that prohibit fraud or unfair 
     trade or deceptive practices or unconscionable contracts are 
     not affected by this Act. The use of the word ``solely'' 
     throughout section 101(a) is intended to ensure a contract, 
     notice or disclosure which is provided electronically gains 
     no additional validity or sanctity against challenge just 
     because it is in electronic form. The validity of a consent 
     obtained as the result of an unfair or deceptive practice can 
     be challenged and found to be invalid, in which case any 
     records which were provided electronically will be deemed to 
     not have been provided to the consumer. 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 consented to the electronic 
     notices and contract 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. The basic rules of good faith 
     and fair dealing apply to electronic commerce.
       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 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 Records. Section 101(c)(1). The House 
     bill included an amendment that required that consumers 
     affirmatively consent before they can receive records 
     (included required notices and disclosures and statements) 
     electronically that are legally required to be provided or 
     made available in writing. Special rules apply to electronic 
     transactions entered into by consumers. It is the Congress' 
     intent that the broadest possible interpretation should be 
     applied to the concept of ``consumer.'' The definition in 
     Section 106(1) is intended to include persons obtaining 
     credit and insurance, even salaries and pensions--because all 
     of these are ``products or services which are used primarily 
     for personal, family or household purposes'' as the word is 
     defined in the Act. Amongst the 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, that they 
     can actually open, read, and retain the records that they 
     will be sent electronically. The

[[Page 10975]]

     Act requires that consumers consent electronically--or 
     confirm their consent electronically--in either case, in a 
     manner that allows the consumer to test his capacity to 
     access and retain the electronic records that will be 
     provided to him. The consumer's consent to receive electronic 
     records is not valid unless it is confirmed electronically in 
     a manner meeting the specific requirements of Section 
     101(c)(1)(C)(ii).
       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. 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 or she 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 do 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.'' State and 
     federal law requirements on delivering documents have not 
     been addressed in this Act. The underlying rules on these 
     issues still prevail. It is our view that records provided 
     electronically to consumers must be provided in a manner that 
     has the same expectation for the consumer's actual receipt as 
     was contemplated when the state law requirement for 
     ``provided'' was passed. 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 if 
     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.
       Section 101(c)(3) is a narrow saving clause to preserve the 
     integrity of electronic contracts: just because the 
     consumer's consent to electronic notices and records was not 
     obtained properly does not mean that the underlying contract 
     itself is invalid. This provision only affects electronic 
     records, it simply means that an electronic consent which 
     fails to meet the requirements of section 101(c) does not 
     create a new basis for invalidating the electronic contract 
     itself.
       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.
       Accuracy and Ability to Retain Contracts and Other Records, 
     101(e). The Conferees added new language in section (e) of 
     101 to establish that a contract or record which is required 
     under other law to be in writing loses its legal validity 
     unless it is provided electronically to each party in a 
     manner which allows each party to retain and use it at a 
     later time to prove the terms of the record.
       Exemptions to Preemption. Section 102(a) allows a state to 
     ``modify, limit or supersede section 101'' in one of two 
     ways: (1) by passing the Uniform Electronic Transactions Act 
     (``UETA'') as approved and recommended for enactment by the 
     National Conferences of Commissioners on Uniform State Laws 
     in 1999, or (2) by passing another law which specifies the 
     requirements for use or acceptance of electronic records and 
     electronic signatures which is consistent with this Act. 
     These choices for states are not mutually exclusive. Of 
     course, the rules for consumer consent and accuracy and 
     retainability of electronic records under this Act shall 
     apply in all states that pass the Uniform Electronic 
     Transaction Act or another law on electronic records and 
     signatures in the future, unless the state affirmatively and 
     expressly displaces the requirements of federal law on these 
     points. A state which passed UETA before the passage of this 
     Act could not have intended to displace these federal law 
     requirements. These states would have to pass another law to 
     supercede or displace the requirements of section 101. In a 
     state which enacts UETA after passage of this Act, without 
     expressly limiting the consent, integrity and retainability 
     subsections of 101, those requirements of this Act would 
     remain in effect. The general provisions of UETA, such as the 
     requirement for agreement to receive electronic records in 
     UETA are not inconsistent with and do not displace the more 
     specific requirements of section 101, such as the requirement 
     for a consumer's consent and disclosure in section 101(c).
       It is important to note that Section 103(b) lists certain 
     notices which are exempted from the coverage of section 101 
     (such as notices of cancellation of utility service or 
     insurance coverage). The legal result is that section 101 
     simply does not apply to the notices listed in section 103. 
     Under section 102(a) a state only has the authority to 
     modify, limit or supercede the coverage of section 101. We 
     specifically intend that a state may not use its authority 
     under section 102, to authorize solely electronic records of 
     those notices listed in section 103.
       Prevention of Circumvention. Section 
     102. Section 8(b)(2) of UETA allows 
     States to impose delivery requirements for electronic 
     records. Section 102(c) has the limited purpose of ensuring 
     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.
       We believe that Title II of this Act separately addresses 
     transferable records by establishing rules for creating, 
     retaining and providing these records electronically. This 
     Act places no limitation on a state's right to add consumer 
     protections to transferable records.
       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 that 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 loans 
     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

[[Page 10976]]

     regulations or guidance interpreting section 101 will 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, and 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.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. ABRAHAM. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________