[House Report 106-462]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-462

======================================================================



 
PROVIDING FOR THE CONSIDERATION OF H.R. 1714, ELECTRONIC SIGNATURES IN 
                    GLOBAL AND NATIONAL COMMERCE ACT

                                _______
                                

  November 8, 1999.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

    Mr. Dreier, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 366]

    The Committee on Rules, having had under consideration 
House Resolution 366, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                  summary of provisions of resolution

    The resolution provides for the consideration of H.R. 1714, 
the Electronic Signatures in Global and National Commerce Act, 
under a structured role. The rule provides one hour of general 
debate divided equally between the chairman and ranking 
minority member of the Committee on Commerce.
    The rule makes in order as an original bill for the purpose 
of amendment the amendment in the nature of a substitute 
printed in the Congressional Record of November 8 and numbered 
1. The rule provides for consideration of only the amendments 
printed in this report. The rule further provides that the 
amendments may be offered only in the order listed in this 
report, may be offered only by a Member designated in this 
report, shall be considered as read, shall not be subject to a 
demand for a division of the question, shall be debatable for 
the time specified in the report equally divided and controlled 
by the proponent and an opponent and shall not be subject to 
amendment. The rule also allows the Chairman of the Committee 
of the Whole to postpone votes during consideration of the 
bill, and to reduce voting time to five minutes on a postponed 
question if the vote follows a fifteen minute vote. Finally, 
the rule provides one motion to recommit with or without 
instructions.

 Summary of amendments made in order under the rule for h.r. 1714, the 
       electronic signatures in global and national commerce act

    1. Inslee/Eshoo/Smith (WA)/Dooley/Moran (VA)/Roukema: 
Expands the bill's requirements that consumers affirmatively 
consent to receive electronic records by requiring that the 
consent be conspicuous and visually separate from other terms; 
provides that, prior to consenting, the consumer must be 
provided with an explanation of how to access and retain 
electronic records; requires providers of electronic records to 
explain any requirements to access and receive electronic 
records; requires the consumer to affirmatively acknowledge, 
with the acknowledgement being conspicuous and visually 
separate from other terms, as part of the consumer's consent, 
that (1) the consumer has the obligation to notify the 
electronic records provider of any change in the consumer's 
email address to which records are intended to be sent, and (2) 
if the consumer withdraws his or her consent, the consumer must 
notify the provider of electronic records of the mailing 
address to which future records are to be provided; requires 
that consumers be able to review, retain and print electronic 
records that they have consented to receive; provides consumer 
with the ability to withdraw his or her consent to receive the 
document electronically; clarifies that all federal and state 
consumer protection laws are unchanged by this act; preserves 
responsibility of disclosures; clarifies that consumers are not 
required to use or accept electronic records or electronic 
signatures; clarifies that states will have a continuing 
ability to require notices in connection with public health and 
safety be given in paper form; and promotes uniform treatment 
of electronic signatures and records; requires the Secretary of 
Commerce to study the effectiveness of the delivery of 
electronic records to consumers using electronic mail compared 
with the delivery of records via the U.S. Postal Service or 
private express mail services. (30 minutes)
    2. Dingell/Conyers/LaFalce/Gephardt: Amendment in the 
nature of a substitute--Promotes the growth of electronic 
commerce by recognizing the validity of electronic signatures 
and contracts; provides that in any commercial transaction 
affecting interstate commerce, a contract may not be denied 
legal effect or enforceability solely because an electronic 
signature or electronic record was used in its formation; and 
permits parties to a transaction to determine the appropriate 
electronic signature technologies for their transaction, and 
the means of implementing such technologies. (30 minutes)
    Text of the Amendments made in Order under the rule:

 1. An Amendment To Be Offered by Representative Inslee of Washington, 
or Representative Eshoo of California, or a designee, Debatable for 30 
                                minutes.

  In section 101(b), strike paragraph (2) and insert the 
following:
          (2) Consent to electronic records.--Notwithstanding 
        subsection (a) and paragraph (1) of this subsection--
                  (A) if a statute, regulation, or other rule 
                of law requires that a record be provided or 
                made available to a consumer in writing, that 
                requirement shall be satisfied by an electronic 
                record if--
                          (i) the consumer has affirmatively 
                        consented, by means of a consent that 
                        is conspicuous and visually separate 
                        from other terms, to the provision or 
                        availability (whichever is required) of 
                        such record (or identified groups of 
                        records that include such record) as an 
                        electronic record, and has not 
                        withdrawn such consent;
                          (ii) prior to consenting, the 
                        consumer is provided with a statement 
                        of the hardware and software 
                        requirements for access to and 
                        retention of electronic records; and
                          (iii) the consumer affirmatively 
                        acknowledges, by means of an 
                        acknowledgement that is conspicuous and 
                        visually separate from other terms, 
                        that--
                                  (I) the consumer has an 
                                obligation to notify the 
                                provider of electronic records 
                                of any change in the consumer's 
                                electronic mail address or 
                                other location to which the 
                                electronic records may be 
                                provided; and
                                  (II) if the consumer 
                                withdraws consent, the consumer 
                                has the obligation to notify 
                                the provider to notify the 
                                provider of electronic records 
                                of the electronic mail address 
                                or other location to which the 
                                records may be provided; and
                  (B) the record is capable of review, 
                retention, and printing by the recipient if 
                accessed using the hardware and software 
                specified in the statement under subparagraph 
                (A)(ii) at the time of the consumer's consent; 
                and
                  (C) if such statute, regulation, or other 
                rule of law requires that a record be retained, 
                that requirement shall be satisfied if such 
                record complies with the requirements of 
                subparagraphs (A) and (B) of subsection (c)(1).
  At the end of section 101, add the following new subsections:
  (d) Ability to Contest Signatures and Charges.--Nothing in 
this section shall be construed to limit or otherwise affect 
the rights of any person to assert that an electronic signature 
is a forgery, is used without authority, or otherwise is 
invalid for reasons that would invalidate the effect of a 
signature in written form. The use or acceptance of an 
electronic record or electronic signature by a consumer shall 
not constitute a waiver of any substantive protections afforded 
consumers under the Consumer Credit Protection Act.
  (e) Scope.--This Act is intended to clarify the legal status 
of electronic records and electronic signatures in the context 
of writing and signing requirements imposed by law. Nothing in 
this Act affects the content or timing of any disclosure 
required to be provided to any consumer under any statute, 
regulation, or other rule of law.
  In section 102(c), strike ``safety or health of an individual 
consumer'' and insert ``public health or safety of consumers''.
  In section 104, add at the end the following new subsection:
  (c) Additional Study of Delivery.--Within 18 months after the 
date of enactment of this Act, the Secretary of Commerce shall 
conduct an inquiry regarding the effectiveness of the delivery 
of electronic records to consumers using electronic mail as 
compared with delivery of written records via the United States 
Postal Service and private express mail services. The Secretary 
shall submit a report to the Congress regarding the results of 
such inquiry by the conclusion of such 18-month period.
                              ----------                              


2. An Amendment To Be Offered by Representative Dingell of Michigan, or 
  Representative Conyers of Michigan, or a Designee, Debatable for 30 
                                Minutes

  Strike out all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

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

SEC. 2. FINDINGS.

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

SEC. 3. PURPOSES.

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

SEC. 4. DEFINITIONS.

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

SEC. 5. INTERSTATE CONTRACT CERTAINTY.

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

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

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

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

  (a) Barriers.--Each Federal agency shall, not later than 6 
months after the date of enactment of this Act, provide a 
report to the Director of the Office of Management and Budget 
and the Secretary of Commerce identifying any provision of law 
administered by such agency, or any regulations issued by such 
agency and in effect on the date of enactment of this Act, that 
may impose a barrier to electronic transactions, or otherwise 
to the conduct of commerce online or by electronic means. Such 
barriers include, but are not limited to, barriers imposed by a 
law or regulation directly or indirectly requiring that 
signatures, or records of transactions, be accomplished or 
retained in other than electronic form. In its report, each 
agency shall identify the barriers among those identified whose 
removal would require legislative action, and shall indicate 
agency plans to undertake regulatory action to remove such 
barriers among those identified as are caused by regulations 
issued by the agency.
  (b) Report to Congress.--The Secretary of Commerce, in 
consultation with the Director of the Office of Management and 
Budget, shall, within 18 months after the date of enactment of 
this Act, and after the consultation required by subsection (c) 
of this section, report to the Congress concerning--
          (1) legislation needed to remove barriers to 
        electronic transactions or otherwise to the conduct of 
        commerce online or by electronic means; and
          (2) actions being taken by the Executive Branch and 
        individual Federal agencies to remove such barriers as 
        are caused by agency regulations or policies.
  (c) Consultation.--In preparing the report required by this 
section, the Secretary of Commerce shall consult with the 
General Services Administration, the National Archives and 
Records Administration, and the Attorney General concerning 
matters involving the authenticity of records, their storage 
and retention, and their usability for law enforcement 
purposes.
  (d) Include Findings If No Recommendations.--If the report 
required by this section omits recommendations for actions 
needed to fully remove identified barriers to electronic 
transactions or to online or electronic commerce, it shall 
include a finding or findings, including substantial reasons 
therefore, that such removal is impracticable or would be 
inconsistent with the implementation or enforcement of 
applicable laws.

                                  
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