[House Report 106-462]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 106-462
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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.
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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.