[House Report 106-661]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-661

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       ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT

                                _______
                                

                  June 8, 2000.--Ordered to be printed

                                _______
                                

 Mr. Bliley, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                         [To accompany S. 761]

    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 other purposes, having met, after full and free 
conference, have agreed to recommend and do recommend to their 
respective Houses as follows:
    That the Senate recede from its disagreement to the 
amendment of the House to the text of the bill and agree to the 
same with an amendment as follows:
    In lieu of the matter proposed to be inserted by the House 
amendment, insert the following:

SECTION 1. SHORT TITLE.

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

         TITLE I--ELECTRONIC RECORDS AND SIGNATURES IN COMMERCE

SEC. 101. GENERAL RULE OF VALIDITY.

    (a) In General.--Notwithstanding any statute, regulation, 
or other rule of law (other than this title and title II), with 
respect to any transaction in or affecting interstate or 
foreign commerce--
            (1) a signature, contract, or other record relating 
        to such transaction may not be denied legal effect, 
        validity, or enforceability solely because it is in 
        electronic form; and
            (2) a contract relating to such transaction may not 
        be denied legal effect, validity, or enforceability 
        solely because an electronic signature or electronic 
        record was used in its formation.
    (b) Preservation of Rights and Obligations.--This title 
does not--
            (1) 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; 
        or
            (2) require any person to agree to use or accept 
        electronic records or electronic signatures, other than 
        a governmental agency with respect to a record other 
        than a contract to which it is a party.
    (c) Consumer Disclosures.--
            (1) Consent to electronic records.--Notwithstanding 
        subsection (a), if a statute, regulation, or other rule 
        of law requires that information relating to a 
        transaction or transactions in or affecting interstate 
        or foreign commerce be provided or made available to a 
        consumer in writing, the use of an electronic record to 
        provide or make available (whichever is required) such 
        information satisfies the requirement that such 
        information be in writing if--
                    (A) the consumer has affirmatively 
                consented to such use and has not withdrawn 
                such consent;
                    (B) the consumer, prior to consenting, is 
                provided with a clear and conspicuous 
                statement--
                            (i) informing the consumer of (I) 
                        any right or option of the consumer to 
                        have the record provided or made 
                        available on paper or in nonelectronic 
                        form, and (II) the right of the 
                        consumer to withdraw the consent to 
                        have the record provided or made 
                        available in an electronic form and of 
                        any conditions, consequences (which may 
                        include termination of the parties' 
                        relationship), or fees in the event of 
                        such withdrawal;
                            (ii) informing the consumer of 
                        whether the consent applies (I) only to 
                        the particular transaction which gave 
                        rise to the obligation to provide the 
                        record, or (II) to identified 
                        categories of records that may be 
                        provided or made available during the 
                        course of the parties' relationship;
                            (iii) describing the procedures the 
                        consumer must use to withdraw consent 
                        as provided in clause (i) and to update 
                        information needed to contact the 
                        consumer electronically; and
                            (iv) informing the consumer (I) 
                        how, after the consent, the consumer 
                        may, upon request, obtain a paper copy 
                        of an electronic record, and (II) 
                        whether any fee will be charged for 
                        such copy;
                    (C) the consumer--
                            (i) prior to consenting, is 
                        provided with a statement of the 
                        hardware and software requirements for 
                        access to and retention of the 
                        electronic records; and
                            (ii) 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; and
                    (D) after the consent of a consumer in 
                accordance with subparagraph (A), if a change 
                in the hardware or software requirements needed 
                to access or retain electronic records creates 
                a material risk that the consumer will not be 
                able to access or retain a subsequent 
                electronic record that was the subject of the 
                consent, the person providing the electronic 
                record--
                            (i) provides the consumer with a 
                        statement of (I) the revised hardware 
                        and software requirements for access to 
                        and retention of the electronic 
                        records, and (II) the right to withdraw 
                        consent without the imposition of any 
                        fees for such withdrawal and without 
                        the imposition of any condition or 
                        consequence that was not disclosed 
                        under subparagraph (B)(i); and
                            (ii) again complies with 
                        subparagraph (C).
            (2) Other rights.--
                    (A) Preservation of consumer protections.--
                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.
                    (B) Verification or acknowledgement.--If a 
                law that was enacted prior to this Act 
                expressly requires a record to be provided or 
                made available by a specified method that 
                requires verification or acknowledgment of 
                receipt, the record may be provided or made 
                available electronically only if the method 
                used provides verification or acknowledgment of 
                receipt (whichever is required).
            (3) Effect of failure to obtain electronic consent 
        or confirmation of consent.--The legal effectiveness, 
        validity, or enforceability of any contract executed by 
        a consumer shall not be denied solely because of the 
        failure to obtain electronic consent or confirmation of 
        consent by that consumer in accordance with paragraph 
        (1)(C)(ii).
            (4) Prospective effect.--Withdrawal of consent by a 
        consumer shall not affect the legal effectiveness, 
        validity, or enforceability of electronic records 
        provided or made available to that consumer in 
        accordance with paragraph (1) prior to implementation 
        of the consumer's withdrawal of consent. A consumer's 
        withdrawal of consent shall be effective within a 
        reasonable period of time after receipt of the 
        withdrawal by the provider of the record. Failure to 
        comply with paragraph (1)(D) may, at the election of 
        the consumer, be treated as a withdrawal of consent for 
        purposes of this paragraph.
            (5) Prior consent.--This subsection does not apply 
        to any records that are provided or made available to a 
        consumer whohas consented prior to the effective date 
of this title to receive such records in electronic form as permitted 
by any statute, regulation, or other rule of law.
            (6) Oral communications.--An oral communication or 
        a recording of an oral communication shall not qualify 
        as an electronic record for purposes of this subsection 
        except as otherwise provided under applicable law.
    (d) Retention of Contracts and Records.--
            (1) Accuracy and accessibility.--If a statute, 
        regulation, or other rule of law requires that a 
        contract or other record relating to a transaction in 
        or affecting interstate or foreign commerce be 
        retained, that requirement is met by retaining an 
        electronic record of the information in the contract or 
        other record that--
                    (A) accurately reflects the information set 
                forth in the contract or other record; and
                    (B) remains accessible to all persons who 
                are entitled to access by statute, regulation, 
                or rule of law, for the period required by such 
                statute, regulation, or rule of law, in a form 
                that is capable of being accurately reproduced 
                for later reference, whether by transmission, 
                printing, or otherwise.
            (2) Exception.--A requirement to retain a contract 
        or other record in accordance with paragraph (1) does 
        not apply to any information whose sole purpose is to 
        enable the contract or other record to be sent, 
        communicated, or received.
            (3) Originals.--If a statute, regulation, or other 
        rule of law requires a contract or other record 
        relating to a transaction in or affecting interstate or 
        foreign commerce to be provided, available, or retained 
        in its original form, or provides consequences if the 
        contract or other record is not provided, available, or 
        retained in its original form, that statute, 
        regulation, or rule of law is satisfied by an 
        electronic record that complies with paragraph (1).
            (4) Checks.--If a statute, regulation, or other 
        rule of law requires the retention of a check, that 
        requirement is satisfied by retention of an electronic 
        record of the information on the front and back of the 
        check in accordance with paragraph (1).
    (e) Accuracy and Ability To Retain Contracts and Other 
Records.--Notwithstanding subsection (a), if a statute, 
regulation, or other rule of law requires that a contract or 
other record relating to a transaction in or affecting 
interstate or foreign commerce be in writing, the legal effect, 
validity, or enforceability of an electronic record of such 
contract or other record may be denied if such electronic 
record is not in a form that is capable of being retained and 
accurately reproduced for later reference by all parties or 
persons who are entitled to retain the contract or other 
record.
    (f) Proximity.--Nothing in this title affects the proximity 
required by any statute, regulation, or other rule of law with 
respect to any warning, notice, disclosure, or other record 
required to be posted, displayed, or publicly affixed.
    (g) Notarization and Acknowledgment.--If a statute, 
regulation, or other rule of law requires a signature or record 
relating to a transaction in or affecting interstate or foreign 
commerce to be notarized, acknowledged, verified, or made under 
oath, that requirement is satisfied if the electronic signature 
of the person authorized to perform those acts, together with 
all other information required to be included by other 
applicable statute, regulation, or rule of law, is attached to 
or logically associated with the signature or record.
    (h) Electronic Agents.--A contract or other record relating 
to a transaction in or affecting interstate or foreign commerce 
may not be denied legal effect, validity, or enforceability 
solely because its formation, creation, or delivery involved 
the action of one or more electronic agents so long as the 
action of any such electronic agent is legally attributable to 
the person to be bound.
    (i) Insurance.--It is the specific intent of the Congress 
that this title and title II apply to the business of 
insurance.
    (j) Insurance Agents and Brokers.--An insurance agent or 
broker acting under the direction of a party that enters into a 
contract by means of an electronic record or electronic 
signature may not be held liable for any deficiency in the 
electronic procedures agreed to by the parties under that 
contract if--
            (1) the agent or broker has not engaged in 
        negligent, reckless, or intentional tortious conduct;
            (2) the agent or broker was not involved in the 
        development or establishment of such electronic 
        procedures; and
            (3) the agent or broker did not deviate from such 
        procedures.

SEC. 102. EXEMPTION TO PREEMPTION.

    (a) In General.--A State statute, regulation, or other rule 
of law may modify, limit, or supersede the provisions of 
section 101 with respect to State law only if such statute, 
regulation, or rule of law--
            (1) constitutes an enactment or adoption of the 
        Uniform Electronic Transactions Act as approved and 
        recommended for enactment in all the States by the 
        National Conference of Commissioners on Uniform State 
        Laws in 1999, except that any exception to the scope of 
        such Act enacted by a State under section 3(b)(4) of 
        such Act shall be preempted to the extent such 
        exception is inconsistent with this title or title II, 
        or would not be permitted under paragraph (2)(A)(ii) of 
        this subsection; or
            (2)(A) specifies the alternative procedures or 
        requirements for the use or acceptance (or both) of 
        electronic records or electronic signatures to 
        establish the legal effect, validity, or enforceability 
        of contracts or other records, if--
                    (i) such alternative procedures or 
                requirements are consistent with this title and 
                title II; and
                    (ii) such alternative procedures or 
                requirements do not require, or accord greater 
                legal status or effect to, the implementation 
                or application of a specific technology or 
                technical specification for performing the 
                functions of creating, storing, generating, 
                receiving, communicating, or authenticating 
                electronic records or electronic signatures; 
                and
            (B) if enacted or adopted after the date of the 
        enactment of this Act, makes specific reference to this 
        Act.
    (b) Exceptions for Actions by States as Market 
Participants.--Subsection (a)(2)(A)(ii) shall not apply to the 
statutes, regulations, or other rules of law governing 
procurement by any State, or any agency or instrumentality 
thereof.
    (c) Prevention of Circumvention.--Subsection (a) does not 
permit a State to circumvent this title or title II through the 
imposition of nonelectronic delivery methods under section 
8(b)(2) of the Uniform Electronic Transactions Act.

SEC. 103. SPECIFIC EXCEPTIONS.  

    (a) Excepted Requirements.--The provisions of section 101 
shall not apply to a contract or other record to the extent it 
is governed by--
            (1) a statute, regulation, or other rule of law 
        governing the creation and execution of wills, 
        codicils, or testamentary trusts;
            (2) a State statute, regulation, or other rule of 
        law governing adoption, divorce, or other matters of 
        family law; or
            (3) the Uniform Commercial Code, as in effect in 
        any State, other than sections 1-107 and 1-206 and 
        Articles 2 and 2A.
    (b) Additional Exceptions.--The provisions of section 101 
shall not apply to--
            (1) court orders or notices, or official court 
        documents (including briefs, pleadings, and other 
        writings) required to be executed in connection with 
        court proceedings;
            (2) any notice of--
                    (A) the cancellation or termination of 
                utility services (including water, heat, and 
                power);
                    (B) default, acceleration, repossession, 
                foreclosure, or eviction, or the right to cure, 
                under a credit agreement secured by, or a 
                rental agreement for, a primary residence of an 
                individual;
                    (C) the cancellation or termination of 
                health insurance or benefits or life insurance 
                benefits (excluding annuities); or
                    (D) recall of a product, or material 
                failure of a product, that risks endangering 
                health or safety; or
            (3) any document required to accompany any 
        transportation or handling of hazardous materials, 
        pesticides, or other toxic or dangerous materials.
    (c) Review of Exceptions.--
            (1) Evaluation required.--The Secretary of 
        Commerce, acting through the Assistant Secretary for 
        Communications and Information, shall review the 
        operation of the exceptions in subsections (a) and (b) 
        to evaluate, over a period of 3 years, whether such 
        exceptions continue to be necessary for the protection 
        of consumers. Within 3 years after the date of 
        enactment of this Act, the Assistant Secretary shall 
        submit a report to the Congress on the results of such 
        evaluation.
            (2) Determinations.--If a Federal regulatory 
        agency, with respect to matter within its jurisdiction, 
        determines after notice and an opportunity for public 
        comment, and publishes a finding, that one or more such 
        exceptions are no longer necessary for the protection 
        of consumers and eliminating such exceptions will not 
        increase the material risk of harm to consumers, such 
        agency may extend the application of section 101 to the 
        exceptions identified in such finding.

SEC. 104. APPLICABILITY TO FEDERAL AND STATE GOVERNMENTS.

    (a) Filing and Access Requirements.--Subject to subsection 
(c)(2), nothing in this title limits or supersedes any 
requirement by a Federal regulatory agency, self-regulatory 
organization, or State regulatory agency that records be filed 
with such agency or organization in accordance with specified 
standards or formats.
    (b) Preservation of Existing Rulemaking Authority.--
            (1) Use of authority to interpret.--Subject to 
        paragraph (2) and subsection (c), a Federal regulatory 
        agency or State regulatory agency that is responsible 
        for rulemaking under any other statute may interpret 
        section 101 with respect to such statute through--
                    (A) the issuance of regulations pursuant to 
                a statute; or
                    (B) to the extent such agency is authorized 
                by statute to issue orders or guidance, the 
                issuance of orders or guidance of general 
                applicability that are publicly available and 
                published (in the Federal Register in the case 
                of an order or guidance issued by a Federal 
                regulatory agency).

        This paragraph does not grant any Federal regulatory 
        agency or State regulatory agency authority to issue 
        regulations, orders, or guidance pursuant to any 
        statute that does not authorize such issuance.
            (2) Limitations on interpretation authority.--
        Notwithstanding paragraph (1), a Federal regulatory 
        agency shall not adopt any regulation, order, or 
        guidance described in paragraph (1), and a State 
        regulatory agency is preempted by section 101 from 
        adopting any regulation, order, or guidance described 
        in paragraph (1), unless--
                    (A) such regulation, order, or guidance is 
                consistent with section 101;
                    (B) such regulation, order, or guidance 
                does not add to the requirements of such 
                section; and
                    (C) such agency finds, in connection with 
                the issuance of such regulation, order, or 
                guidance, that--
                            (i) there is a substantial 
                        justification for the regulation, 
                        order, or guidance;
                            (ii) the methods selected to carry 
                        out that purpose--
                                    (I) are substantially 
                                equivalent to the requirements 
                                imposed on records that are not 
                                electronic records; and
                                    (II) will not impose 
                                unreasonable costs on the 
                                acceptance and use of 
                                electronic records; and
                            (iii) the methods selected to carry 
                        out that purpose do not require, or 
                        accord greater legal status or effect 
                        to, the implementation or application 
                        of a specific technology or technical 
                        specification for performing the 
                        functions of creating, storing, 
                        generating, receiving, communicating, 
                        or authenticating electronic records or 
                        electronic signatures.
            (3) Performance standards.--
                    (A) Accuracy, record integrity, 
                accessibility.--Notwithstanding paragraph 
                (2)(C)(iii), a Federal regulatory agency or 
                State regulatory agency may interpret section 
                101(d) to specify performance standards to 
                assure accuracy, record integrity, and 
                accessibility of records that are required to 
                be retained. Such performance standards may be 
                specified in a manner that imposes a 
                requirement in violation of paragraph 
                (2)(C)(iii) if the requirement (i) serves an 
                important governmental objective; and (ii) is 
                substantially related to the achievement of 
                that objective. Nothing in this paragraph shall 
                be construed to grant any Federal regulatory 
                agency or State regulatory agency authority to 
                require use of a particular type of software or 
                hardware in order to comply with section 
                101(d).
                    (B) Paper or printed form.--Notwithstanding 
                subsection (c)(1), a Federal regulatory agency 
                or State regulatory agency may interpret 
                section 101(d) to require retention of a record 
                in a tangible printed or paper form if--
                            (i) there is a compelling 
                        governmental interest relating to law 
                        enforcement or national security for 
                        imposing such requirement; and
                            (ii) imposing such requirement is 
                        essential to attaining such interest.
            (4) Exceptions for actions by government as market 
        participant.--Paragraph (2)(C)(iii) shall not apply to 
        the statutes, regulations, or other rules of law 
        governing procurement by the Federal or any State 
        government, or any agency or instrumentality thereof.
    (c) Additional Limitations.--
            (1) Reimposing paper prohibited.--Nothing in 
        subsection (b) (other than paragraph (3)(B) thereof) 
        shall be construed to grant any Federal regulatory 
        agency or State regulatory agency authority to impose 
        or reimpose any requirement that a record be in a 
        tangible printed or paper form.
            (2) Continuing obligation under government 
        paperwork elimination act.--Nothing in subsection (a) 
        or (b) relieves any Federal regulatory agency of its 
        obligations under the Government Paperwork Elimination 
        Act (title XVII of Public Law 105-277).
    (d) Authority To Exempt From Consent Provision.--
            (1) In general.--A Federal regulatory agency may, 
        with respect to matter within its jurisdiction, by 
        regulation or order issued after notice and an 
        opportunity for public comment, exempt without 
        condition a specified category or type of record from 
        the requirements relating to consent in section 101(c) 
        if such exemption is necessary to eliminate a 
        substantial burden on electronic commerce and will not 
        increase the material risk of harm to consumers.
            (2) Prospectuses.--Within 30 days after the date of 
        enactment of this Act, the Securities and Exchange 
        Commission shall issue a regulation or order pursuant 
        to paragraph (1) exempting from section 101(c) any 
        records that are required to be provided in order to 
        allow advertising, sales literature, or other 
        information concerning a security issued by an 
        investment company that is registered under the 
        Investment Company Act of 1940, or concerning the 
        issuer thereof, to be excluded from the definition of a 
        prospectus under section 2(a)(10)(A) of the Securities 
        Act of 1933.
    (e) Electronic Letters of Agency.--The Federal 
Communications Commission shall not hold any contract for 
telecommunications service or letter of agency for a preferred 
carrier change, that otherwise complies with the Commission's 
rules, to be legally ineffective, invalid, or unenforceable 
solely because an electronic record or electronic signature was 
used in its formation or authorization.

SEC. 105. STUDIES.

    (a) Delivery.--Within 12 months after the date of the 
enactment of this Act, the Secretary of Commerce shall conduct 
an inquiry regarding the effectiveness of the delivery of 
electronic records to consumers using electronic mail as 
compared with delivery of written records via the United States 
Postal Service and private express mail services. The Secretary 
shall submit a report to the Congress regarding the results of 
such inquiry by the conclusion of such 12-month period.
    (b) Study of Electronic Consent.--Within 12 months after 
the date of the enactment of this Act, the Secretary of 
Commerce and the Federal Trade Commission shall submit a report 
to the Congress evaluating any benefits provided to consumers 
by the procedure required by section 101(c)(1)(C)(ii); any 
burdens imposed on electronic commerce by that provision; 
whether the benefits outweigh the burdens; whether the absence 
of the procedure required by section 101(c)(1)(C)(ii) would 
increase the incidence of fraud directed against consumers; and 
suggesting any revisions to the provision deemed appropriate by 
the Secretary and the Commission. In conducting this 
evaluation, the Secretary and the Commission shall solicit 
comment from the general public, consumer representatives, and 
electronic commerce businesses.

SEC. 106. DEFINITIONS.

    For purposes of this title:
            (1) Consumer.--The term ``consumer'' means an 
        individual who obtains, through a transaction, products 
        or services which are used primarily for personal, 
        family, or household purposes, and also means the legal 
        representative of such an individual.
            (2) Electronic.--The term ``electronic'' means 
        relating to technology having electrical, digital, 
        magnetic, wireless, optical, electromagnetic, or 
        similar capabilities.
            (3) Electronic agent.--The term ``electronic 
        agent'' means a computer program or an electronic or 
        other automated means used independently to initiate an 
        action or respond to electronic records or performances 
        in whole or in part without review or action by an 
        individual at the time of the action or response.
            (4) Electronic record.--The term ``electronic 
        record'' means a contract or other record created, 
        generated, sent, communicated, received, or stored by 
        electronic means.
            (5) Electronic signature.--The term ``electronic 
        signature'' means an electronic sound, symbol, or 
        process, attached to or logically associated with a 
        contract or other record and executed or adopted by a 
        person with the intent to sign the record.
            (6) Federal regulatory agency.--The term ``Federal 
        regulatory agency'' means an agency, as that term is 
        defined in section 552(f) of title 5, United States 
        Code.
            (7) Information.--The term ``information'' means 
        data, text, images, sounds, codes, computer programs, 
        software, databases, or the like.
            (8) Person.--The term ``person'' means an 
        individual, corporation, business trust, estate, trust, 
        partnership, limited liability company, association, 
        joint venture, governmental agency, public corporation, 
        or any other legal or commercial entity.
            (9) 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.
            (10) Requirement.--The term ``requirement'' 
        includes a prohibition.
            (11) Self-regulatory organization.--The term 
        ``self-regulatory organization'' means an organization 
        or entity that is not a Federal regulatory agency or a 
        State, but that is under the supervision of a Federal 
        regulatory agency and is authorized under Federal law 
        to adopt and administer rules applicable to its members 
        that are enforced by such organization or entity, by a 
        Federal regulatory agency, or by another self-
        regulatory organization.
            (12) State.--The term ``State'' includes the 
        District of Columbia and the territories and 
        possessions of the United States.
            (13) Transaction.--The term ``transaction'' means 
        an action or set of actions relating to the conduct of 
        business, consumer, or commercial affairs between two 
        or more persons, including any of the following types 
        of conduct:
                    (A) the sale, lease, exchange, licensing, 
                or other disposition of (i) personal property, 
                including goods and intangibles, (ii) services, 
                and (iii) any combination thereof; and
                    (B) the sale, lease, exchange, or other 
                disposition of any interest in real property, 
                or any combination thereof.

SEC. 107. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this 
title shall be effective on October 1, 2000.
    (b) Exceptions.--
            (1) Record Retention.--
                    (A) In general.--Subject to subparagraph 
                (B), this title shall be effective on March 1, 
                2001, with respect to a requirement that a 
                record be retained imposed by--
                            (i) a Federal statute, regulation, 
                        or other rule of law, or
                            (ii) a State statute, regulation, 
                        or other rule of law administered or 
                        promulgated by a State regulatory 
                        agency.
                    (B) Delayed effect for pending 
                rulemakings.--If on March 1, 2001, a Federal 
                regulatory agency or State regulatory agency 
                has announced, proposed, or initiated, but not 
                completed, a rulemaking proceeding to prescribe 
                a regulation under section 104(b)(3) with 
                respect to a requirement described in 
                subparagraph (A), this title shall be effective 
                on June 1, 2001, with respect to such 
                requirement.
            (2) Certain guaranteed and insured loans.--With 
        regard to any transaction involving a loan guarantee or 
        loan guarantee commitment (as those terms are defined 
        in section 502 of the Federal Credit Reform Act of 
        1990), or involving a program listed in the Federal 
        Credit Supplement, Budget of the United States, FY 
        2001, this title applies only to such transactions 
        entered into, and to any loan or mortgage made, 
        insured, or guaranteed by the United States Government 
        thereunder, on and after one year after the date of 
        enactment of this Act.
            (3) Student loans.--With respect to any records 
        that are provided or made available to a consumer 
        pursuant to an application for a loan, or a loan made, 
        pursuant to title IV of the Higher Education Act of 
        1965, section 101(c) of this Act shall not apply until 
        the earlier of--
                    (A) such time as the Secretary of Education 
                publishes revised promissory notes under 
                section 432(m) of the Higher Education Act of 
                1965; or
                    (B) one year after the date of enactment of 
                this Act.

                     TITLE II--TRANSFERABLE RECORDS

SEC. 201. TRANSFERABLE RECORDS.

    (a) Definitions.--For purposes of this section:
            (1) Transferable record.--The term ``transferable 
        record'' means an electronic record that--
                    (A) would be a note under Article 3 of the 
                Uniform Commercial Code if the electronic 
                record were in writing;
                    (B) the issuer of the electronic record 
                expressly has agreed is a transferable record; 
                and
                    (C) relates to a loan secured by real 
                property.
        A transferable record may be executed using an 
        electronic signature.
            (2) Other definitions.--The terms ``electronic 
        record'', ``electronic signature'', and ``person'' have 
        the same meanings provided in section 106 of this Act.
    (b) Control.--A person has control of a transferable record 
if a system employed for evidencing the transfer of interests 
in the transferable record reliably establishes that person as 
the person to which the transferable record was issued or 
transferred.
    (c) Conditions.--A system satisfies subsection (b), and a 
person is deemed to have control of a transferable record, if 
the transferable record is created, stored, and assigned in 
such a manner that--
            (1) a single authoritative copy of the transferable 
        record exists which is unique, identifiable, and, 
        except as otherwise provided in paragraphs (4), (5), 
        and (6), unalterable;
            (2) the authoritative copy identifies the person 
        asserting control as--
                    (A) the person to which the transferable 
                record was issued; or
                    (B) if the authoritative copy indicates 
                that the transferable record has been 
                transferred, the person to which the 
                transferable record was most recently 
                transferred;
            (3) the authoritative copy is communicated to and 
        maintained by the person asserting control or its 
        designated custodian;
            (4) copies or revisions that add or change an 
        identified assignee of the authoritative copy can be 
        made only with the consent of the person asserting 
        control;
            (5) each copy of the authoritative copy and any 
        copy of a copy is readily identifiable as a copy that 
        is not the authoritative copy; and
            (6) any revision of the authoritative copy is 
        readily identifiable as authorized or unauthorized.
    (d) Status as Holder.--Except as otherwise agreed, a person 
having control of a transferable record is the holder, as 
defined in section 1-201(20) of the Uniform Commercial Code, of 
the transferable record and has the same rights and defenses as 
a holder of an equivalent record or writing under the Uniform 
Commercial Code, including, if the applicable statutory 
requirements under section 3-302(a), 9-308, or revised section 
9-330 of the Uniform Commercial Code are satisfied, the rights 
and defenses of a holder in due course or a purchaser, 
respectively. Delivery, possession, and endorsement are not 
required to obtain or exercise any of the rights under this 
subsection.
    (e) Obligor Rights.--Except as otherwise agreed, an obligor 
under a transferable record has the same rights and defenses as 
an equivalent obligor under equivalent records or writings 
under the Uniform Commercial Code.
    (f) Proof of Control.--If requested by a person against 
which enforcement is sought, the person seeking to enforce the 
transferable record shall provide reasonable proof that the 
person is in control of the transferable record. Proof may 
include access to the authoritative copy of the transferable 
record and related business records sufficient to review the 
terms of the transferable record and to establish the identity 
of the person having control of the transferable record.
    (g) UCC References.--For purposes of this subsection, all 
references to the Uniform Commercial Code are to the Uniform 
Commercial Code as in effect in the jurisdiction the law of 
which governs the transferable record.

SEC. 202. EFFECTIVE DATE.

    This title shall be effective 90 days after the date of 
enactment of this Act.

       TITLE III--PROMOTION OF INTERNATIONAL ELECTRONIC COMMERCE

SEC. 301. PRINCIPLES GOVERNING THE USE OF ELECTRONIC SIGNATURES IN 
                    INTERNATIONAL TRANSACTIONS.

    (a) Promotion of Electronic Signatures.--
            (1) Required actions.--The Secretary of Commerce 
        shall promote the acceptance and use, on an 
        international basis, of electronic signatures in 
        accordance with the principles specified in paragraph 
        (2) and in a manner consistent with section 101 of this 
        Act. The Secretary of Commerce shall take all 
        actions necessary in a manner consistent with such principles 
        to eliminate or reduce, to the maximum extent possible, the 
        impediments to commerce in electronic signatures, for the 
        purpose of facilitating the development of interstate and 
        foreign commerce.
            (2) Principles.--The principles specified in this 
        paragraph are the following:
                    (A) 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.
                    (B) 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.
                    (C) 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.
                    (D) Take a nondiscriminatory approach to 
                electronic signatures and authentication 
                methods from other jurisdictions.
    (b) Consultation.--In conducting the activities required by 
this section, the Secretary shall consult with users and 
providers of electronic signature products and services and 
other interested persons.
    (c) Definitions.--As used in this section, the terms 
``electronic record'' and ``electronic signature'' have the 
same meanings provided in section 106 of this Act.

            TITLE IV--COMMISSION ON ONLINE CHILD PROTECTION

SECTION 401. AUTHORITY TO ACCEPT GIFTS.

    Section 1405 of the Child Online Protection Act (47 U.S.C. 
231 note) is amended by inserting after subsection (g) the 
following new subsection:
    ``(h) Gifts, Bequests, and Devises.--The Commission may 
accept, use, and dispose of gifts, bequests, or devises of 
services or property, both real (including the use of office 
space) and personal, for the purpose of aiding or facilitating 
the work of the Commission. Gifts or grants not used at the 
termination of the Commission shall be returned to the donor or 
grantee.''.
    And the House agree to the same.
    That the Senate recede from its disagreement to the 
amendment of the House to the title of the bill and agree to 
the same.

                                   Tom Bliley,
                                   Billy Tauzin,
                                   Michael G. Oxley,
                                   John D. Dingell,
                                   Edward J. Markey,
                                 Managers on the Part of the House.

                From the Committee on Commerce, Science, and 
                Transportation:
                                   John McCain,
                                   Conrad Burns,
                                   Ted Stevens,
                                   Slade Gorton,
                                   Spencer Abraham,
                                   Ernest F. Hollings,
                                   Daniel K. Inouye,
                                   Jay Rockefeller,
                                   John F. Kerry,
                                   Ron Wyden,
                From the Committee on Banking, Housing, and 
                Urban Affairs, for items within their 
                jurisdiction:

                                   Paul S. Sarbanes,

                From the Committee on the Judiciary, for items 
                within their jurisdiction:
                                   Orrin Hatch,
                                   Patrick Leahy,
                                Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and Senate at the 
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, submit the following joint statement to the House and 
the Senate in explanation of the effect of the action agreed 
upon by the managers and recommended in the accompanying 
conference report:
      The House amendment to the text of the bill struck all of 
the Senate bill after the enacting clause, and inserted a 
substitute text.
      The Senate recedes from its disagreement to the amendment 
of the House with an amendment that is a substitute for the 
Senate bill and House amendment.
      The managers on the part of the House and Senate met on 
May 18, 2000, and reconciled the differences between the two 
bills.
                                   Tom Bliley,
                                   Billy Tauzin,
                                   Michael G. Oxley,
                                   John D. Dingell,
                                   Edward J. Markey,
                                 Managers on the Part of the House.

                From the Committee on Commerce, Science, and 
                Transportation:
                                   John McCain,
                                   Conrad Burns,
                                   Ted Stevens,
                                   Slade Gorton,
                                   Spencer Abraham,
                                   Ernest F. Hollings,
                                   Daniel K. Inouye,
                                   Jay Rockefeller,
                                   John F. Kerry,
                                   Ron Wyden,
                From the Committee on Banking, Housing, and 
                Urban Affairs, for items within their 
                jurisdiction:
                                   Paul S. Sarbanes,
                From the Committee on the Judiciary, for items 
                within their jurisdiction:
                                   Orrin Hatch,
                                   Patrick Leahy,
                                Managers on the Part of the Senate.

                                  
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