House Report 106-877 - ELECTRONIC COMMERCE ENHANCEMENT ACT OF 2000

[House Report 106-877]
[From the U.S. Government Publishing Office]

106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-877

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

ELECTRONIC COMMERCE ENHANCEMENT ACT OF 2000

_______

September 21, 2000.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed

_______

Mr. Sensenbrenner, from the Committee on Science, submitted the
following

R E P O R T

[To accompany H.R. 4429]

[Including cost estimate of the Congressional Budget Office]

The Committee on Science, to whom was referred the bill (H.R.
4429) to require the Director of the National Institute of
Standards and Technology to assist small and medium-sized
manufacturers and other such businesses to successfully
integrate and utilize electronic commerce technologies and
business practices, having considered the same, report
favorably thereon with amendments and recommend that the bill
as amended do pass.

CONTENTS

Page
I. Amendment.......................................................2
II. Purpose of the Bill.............................................4
III. Background and Need for the Legislation.........................4
IV. Summary of Hearings.............................................5
V. Committee Actions...............................................7
VI. Summary of Major Provisions of the Bill.........................8
VII. Section-By-Section Analysis (By Title and Section)/Committee
Views...........................................................9
VIII. Cost Estimate..................................................12
IX. Congressional Budget Office Cost Estimate......................13
X. Compliance with Public Law 104-4 (Unfunded Mandates)...........14
XI. Committee Oversight Findings and Recommendations...............14
XII. Oversight Findings and Recommendations by the Committee on
Government Reform and Oversight................................14
XIII. Constitutional Authority Statement.............................14
XIV. Federal Advisory Committee Statement...........................15
XV. Congressional Accountability Act...............................15
XVI. Statement on Preemption of State, Local, or Tribal Law.........15
XVII. Changes in Existing Law Made by the Bill, As Reported..........15
XVIII.Committee Recommendations......................................15

XIX. Proceedings of Full Committee Markup...........................15

The amendments are as follows:

I. Amendment

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Electronic Commerce Enhancement Act of
2000''.

TITLE I--ELECTRONIC COMMERCE

SEC. 101. FINDINGS.

The Congress finds the following:
(1) Commercial transactions on the Internet, whether retail
business-to-customer or business-to-business, are commonly
called electronic commerce.
(2) In the United States, business-to-business transactions
between small and medium-sized manufacturers and other such
businesses and their suppliers is rapidly growing, as many of
these businesses begin to use Internet connections for supply-
chain management, after-sales support, and payments.
(3) Small and medium-sized manufacturers and other such
businesses play a critical role in the United States economy.
(4) Electronic commerce can help small and medium-sized
manufacturers and other such businesses develop new products
and markets, interact more quickly and efficiently with
suppliers and customers, and improve productivity by increasing
efficiency and reducing transaction costs and paperwork. Small
and medium-sized manufacturers and other such businesses who
fully exploit the potential of electronic commerce activities
can use it to interact with customers, suppliers, and the
public, and for external support functions such as personnel
services and employee training.
(5) The National Institute of Standards and Technology's
Manufacturing Extension Partnership program has a successful
record of assisting small and medium-sized manufacturers and
other such businesses. In addition, the Manufacturing Extension
Partnership program, working with the Small Business
Administration, successfully assisted United States small
enterprises in remediating their Y2K computer problems.
(6) A critical element of electronic commerce is the ability
of different electronic commerce systems to exchange
information. The continued growth of electronic commerce will
be enhanced by the development of private voluntary
interoperability standards and testbeds to ensure the
compatibility of different systems.

SEC. 102. REPORT ON THE UTILIZATION OF ELECTRONIC COMMERCE.

(a) Advisory Panel.--The Director of the National Institute of
Standards and Technology (in this title referred to as the
``Director'') shall establish an Advisory Panel to report on the
challenges facing small and medium-sized manufacturers and other such
businesses in integrating and utilizing electronic commerce
technologies and business practices. The Advisory Panel shall be
comprised of representatives of the Technology Administration, the
National Institute of Standards and Technology's Manufacturing
Extension Partnership program established under sections 25 and 26 of
the National Institute of Standards and Technology Act (15 U.S.C. 278k
and 278l), the Small Business Administration, and other relevant
parties as identified by the Director.
(b) Initial Report.--Within 12 months after the date of enactment of
this Act, the Advisory Panel shall report to the Director and to the
Committee on Science of the House of Representatives and the Committee
on Commerce, Science, and Transportation of the Senate on the immediate
requirements of small and medium-sized manufacturers and other such
businesses to integrate and utilize electronic commerce technologies
and business practices. The report shall--
(1) describe the current utilization of electronic commerce
practices by small and medium-sized manufacturers and other
such businesses, detailing the different levels between
business-to-retail customer and business-to-business
transactions;
(2) describe and assess the utilization and need for
encryption and electronic authentication components and
electronically stored data security in electronic commerce for
small and medium-sized manufacturers and other such businesses;
(3) identify the impact and problems of interoperability to
electronic commerce, and include an economic assessment; and
(4) include a preliminary assessment of the appropriate role
of, and recommendations for, the Manufacturing Extension
Partnership program to assist small and medium-sized
manufacturers and other such businesses to integrate and
utilize electronic commerce technologies and business
practices.
(c) Final Report.--Within 18 months after the date of enactment of
this Act, the Advisory Panel shall report to the Director and to the
Committee on Science of the House of Representatives and the Committee
on Commerce, Science, and Transportation of the Senate a 3-year
assessment of the needs of small and medium-sized manufacturers and
other such businesses to integrate and utilize electronic commerce
technologies and business practices. The report shall include--
(1) a 3-year planning document for the Manufacturing
Extension Partnership program in the field of electronic
commerce; and
(2) recommendations, if necessary, for the National Institute
of Standards and Technology to address interoperability issues
in the field of electronic commerce.

SEC. 103. ELECTRONIC COMMERCE PILOT PROGRAM.

The National Institute of Standards and Technology's Manufacturing
Extension Partnership program, in consultation with the Small Business
Administration, shall establish a pilot program to assist small and
medium-sized manufacturers and other such businesses in integrating and
utilizing electronic commerce technologies and business practices. The
goal of the pilot program shall be to provide small and medium-sized
manufacturers and other such businesses with the information they need
to make informed decisions in utilizing electronic commerce-related
goods and services. Such program shall be implemented through a
competitive grants program for existing Regional Centers for the
Transfer of Manufacturing Technology established under section 25 of
the National Institute of Standards and Technology Act (15 U.S.C.
278k). In carrying out this section, the Manufacturing Extension
Partnership program shall consult with the Advisory Panel and utilize
the Advisory Panel's reports.

TITLE II--ENTERPRISE INTEGRATION

SEC. 201. ENTERPRISE INTEGRATION ASSESSMENT AND PLAN.

(a) Assessment.--The Director shall work to identify critical
enterprise integration standards and implementation activities for
major manufacturing industries underway in the United States. For each
major manufacturing industry, the Director shall work with industry
representatives and organizations currently engaged in enterprise
integration activities and other appropriate representatives as
necessary. They shall assess the current state of enterprise
integration within the industry, identify the remaining steps in
achieving enterprise integration, and work toward agreement on the
roles of the National Institute of Standards and Technology and of the
private sector in that process. Within 90 days after the date of the
enactment of this Act, the Director shall report to the Congress on
these matters and on anticipated related National Institute of
Standards and Technology activities for the then current fiscal year.
(b) Plans and Reports.--Within 180 days after the date of the
enactment of this Act, the Director shall submit to the Congress a plan
for enterprise integration for each major manufacturing industry,
including milestones for the National Institute of Standards and
Technology portion of the plan, the dates of likely achievement of
those milestones, and anticipated costs to the Government and industry
by fiscal year. Updates of the plans and a progress report for the past
year shall be submitted annually until for a given industry, in the
opinion of the Director, enterprise integration has been achieved.

SEC. 202. DEFINITIONS.

Amend the title so as to read:

A bill to require the Director of the National Institute
of Standards and Technology to assist small and medium-sized
manufacturers and other such businesses to successfully
integrate and utilize electronic commerce technologies and
business practices, and to authorize the National Institute of
Standards and Technology to assess critical enterprise
integration standards and implementation activities for major
manufacturing industries and to develop a plan for enterprise
integration for each major manufacturing industry.

II. Purpose of the Bill

The purpose of the bill is to require the Director of the
National Institute of Standards and Technology (NIST) to assist
small and medium-sized manufacturers to successfully integrate
and utilize electronic commerce technologies and business
practices, and to authorize NIST to assess critical enterprise
integration standards and implementation activities for major
manufacturing industries and to develop a plan for enterprise
integration for each major manufacturing industry.

III. Background and Need for the legislation

Small and medium-sized manufacturers, typically defined as
those with less than 500 employees, contribute greatly to our
nation's economic growth, creating thousands of new jobs each
year and providing all Americans with quality manufactured
goods. According to statistics compiled by the National
Association of Manufacturers and the Modernization Forum, small
manufacturers make up over 98 percent of all U.S. manufacturers
and employ 1 of every 10 American workers. In addition, it is
estimated that over 90 percent of all exporting manufacturers
are small to medium-sized firms. Recognizing the vital role
these businesses play in the United States, 1999 was declared
the ``Year of the Small Manufacturer.''
Commerical transactions on the Internet, whether it be
business-to-customer or business-to-business, are most commonly
referred to as electronic commerce, or eCommerce. It is
estimated that sales in electronic commerce alone will reach
nearly $3.2 trillion by the year 2003. Successfully
implemented, eCommerce business strategies have the potential
to significantly increase productivity and revenues for many
small and medium-sized manufacturers. Electronic commerce can
help small and medium-sized manufacturers develop new products
and markets, interact more quickly and efficiently with
suppliers and customers, and improve productivity by increasing
efficiency and reducing transaction costs and paperwork. In
addition, small and medium-sized manufacturers who fully
exploit the potential of eCommerce can use it to interact with
customers, suppliers, and the public, and for external support
functions such as personnel services and employees training.
With all the benefits eCommerce has to offer, small and
medium-sized manufacturers face numerous challenges in
intergrating successful electronic commerce strategies. The
first and most basic obstacle facing small and medium-sized
manufacturers is access to basic information on assessing their
eCommerce needs and evaluating different options. The high
costs associated with implementing even the most basic
eCommerce strategies coupled with the ever changing technology
options leave small and medium-sized manufacturers at risk for
investing in expensive systems which may soon be quickly
rendered obsolete. In addition, many small and medium-sized
manufacturers who have ventured into the eCommerce arena have
found that they have invested in expensive technology products
only to discover that they are incompatible with those of their
suppliers and customers.
In small and medium-sized manufacturers are going to
continue to contribute significantly towards our nation's
economic growth in the information age, many industry analysts
agree that strategies must be developed now that will help
these businesses address the challenges associated with
integrating successful eCommerce policies. H.R. 4429 was
introduced to help achieve this goal.
Enterprise integration may also play an important role in
the future success of many small and medium-sized
manufacturers. Enterprise integration involves the electronic
linkage of manufacturers, assemblers, and suppliers to enable
them to exchange product, manufacturing, and other business
data within the supply chain. Many Industry analysts agree that
more needs to be done to better determine the importance of
enterprise integration for the manufacturing industry.
One federal program aimed at assisting small manufacturing
is the National Institute of Standard and Technology's (NIST)
Manufacturing and Extension Partnership (MEP). MEP is a
national network of over 400 not-for-profit centers that
provide small manufacturers with cost-effective access to a
variety of services ranging from financial planning and product
development to quality management and human resource direction.
MEP centers are located in all 50 states, the District of
Columbia, and Puerto Rico. Therefore, MEP centers have
expertise to assist our small and medium-sized manufacturers,
address the challenges of eCommerce, and assess the importance
of enterprise integration.
Federal funding for the MEP centers are matched by state,
local and private dollars with the federal share decreasing as
the center matures. In the first three years of operation, the
Federal Government supports 50 percent of a MEP center's
operating costs. In year four it is 40 percent and limited to
one third the total operating cost thereafter. Federal funding
for the MEP program in Fiscal Year 2000 was $104.8 million.

IV. Summary of Hearings

On September 23, 1999, the Subcommittee on Technology held
a hearing entitled ``Small Manufacturers and the Challenges of
the New Millenium.'' The hearing examined the challenges facing
small manufacturers in the 21st Century and reviewed the
appropriate role of government, industry, and academia in
helping to ensure continued growth in the important sector of
our economy. Witnesses included, The Honorable Ray Kammer,
Director, National Institute of Standards and Technology,
Gaithersburg, MD; Mr. Jerry Jasinowski, President, National
Association of Manufacturers, Washington, DC; Mr. John
Churchill, Quality Assurance Director, Wilcoxin Research,
Gaithersburg, MD; Mr. Norm Braddock, President, Saginaw
Remanufacturing, Saginaw, MI.
Mr. Raymond Kammer testified the National Institute of
Standards and Technology (NIST), the National Association of
Manufacturers Forum had recently convened a national summit on
small manufacturing in Washington, DC. The Summit examined four
topics of importance to small manufacturers: electronic
commerce, workforce, international trade, and sustainable
manufacturing. He also stated that NIST's Manufacturing
Extension Partner (MEP) program provides hands-on assistance to
small manufacturers. He said that through the MEP network of
local extension centers, which are each linked to public and
private organizations with complementing expertise, small
manufacturers have access to comprehensive sets of technology
and business assistance. He also gave examples of specific
small manufacturing companies that have been assisted by MEP.
Finally, Mr. Kammer described other programs at NIST, such as
the Measurements and Standards Laboratories, that help benefit
small manufacturers.
Mr. Jerry Jasinowski discussed in detail the four topics
addressed at the National Summit on Small Manufacturing. He
said the number one issue facing small manufacturing is finding
qualified workers to fill employment slots. He said many small
manufacturers want to hire more minorities and older Americans
but lack the resources to adequately train them. On the subject
of eCommerce, Mr. Jasinowski suggested that NIST MEP institute
a website that will provide small manufacturers with advice on
getting started in eCommerce. Mr. Jasinowski testified that
many small manufacturers were not participating to their
fullest extent in international trade because of daunting trade
barriers. He said programs such as the Export-Import bank were
important for small manufacturers. Mr. Jasinowski also said
that we need greater flexibility and cooperation in
environmental quality enhancement between the Federal
Government and the private sector. Finally, he stated that he
supported the work of NIST MEP and looked forward to working in
partnership with them to ensure small manufacturers continue to
thrive.
Mr. John Churchill stated that he had utilized the services
of his local MEP affilated office on many occasions. He
testified that advise from the MEP affiliate helped to decrease
his company's products failure rates and product warrant
returns, thus affecting about 50 percent of their sales.
Mr. Norm Braddock described for the Subcommittee his
experience with the Saginaw Valley State University's Center
for Manufacturing Improvement (an affiliate of Michigan MEP).
He stated that their expertise helped him to better understand
how the production process contributes to the overall cost of
the product, thus allowing him to provide more accurate quotes
to potential customers. Mr. Braddock testified that he gained a
great deal of knowledge from the national summit and
appreciated the opportunity to discuss with other small
manufacturers ways to improve their businesses. He also
stressed the importance and difficulties facing small
manufacturers coming ``on-line.''
On June 22, 2000 the Subcommittee on Technology held a
hearing entitled, ``E-commerce: A Review of Standards and
Technology to Support Interoperability.'' This hearing examined
the impact of standards and emerging technologies that support
electronic commerce. Witnesses included: Dr. Karen Brown,
Deputy Director, National Institute of Standards and
Technology, Gaithersburg, MD; Mr. Keith Krach, Chief Executive
Officer and Chairman of the Board, Ariba, Inc., Mountain View,
CA; Mr. Ken Baker, President, ERIM, Ann Arbor, MI.
Dr. Karen Brown, Deputy Director, National Institute of
Standards and Technology, discussed NIST's role in eCommerce,
which is to work closely with the private sector and to provide
tools such as: measurements and standards for the hardware,
software and networks that comprise the eCommerce
infrastructure; direct hands-on assistance through MEP to U.S.
small manufactures who need help to thrive in the eCommerce
economy; and co-funding private sector research through the ATP
to develop new technologies that will enable future advances in
the eCommerce infrastructure. NIST is leading the global effort
to develop the Advanced Encryption Standard, which will be used
to ensure that encrypted sensitive documents can not be decoded
by anyone but the intended parties. They are also helping to
develop Public Key Infrastructure (PKI) standards that ensure
accurate identification of the parties in an Internet
transaction. Dr. Brown states that NIST has proposed a FY 2001
eCommerce initiative with three components: MEP eCommerce
outreach ($9 million plus $6 million reprogramming, totaling
$15 million), Manufacturing Interoperability ($4 million), and
Wireless Technologies ($1 million).
Mr. Keith Krach, Chief Executive Officer and Chairman of
the Board, Ariba Inc., stated that business to business
eCommerce spending is necessary spending, not discretionary. It
enables small companies to leverage the Internet economy by
giving them a chance to work with larger businesses that they
might have never encountered. Furthermore, Mr. Krach believes
that the Federal Government could support business to business
eCommerce by becoming a broad user of eCommerce and derive many
of the same benefits that businesses gain. In closing Mr. Krach
believes that Government's information technology spending
should be directed towards implementing the infrastructure that
will enable the Government to participate in the business-to-
business marketplace.
Mr. Ken Baker, President, ERIM, testified that the problem
of interoperability in the U.S. industrial supply chain costs
the American automotive industry more than $1 billion each
year. ERIM's center for Electronic Commerce has been working on
interoperability issues for over 10 years. They have also
worked with the Automotive Industry Action Group (AIAG) and
NIST to conduct pilots to improve the quality and timeliness of
data exchange among current automotive manufactures and their
suppliers. Mr. Baker added that the industry lacks the third
party leadership to reach common agreement on standards.

V. Committee Actions

On July 26, 2000, the Committee on Science convened to
mark-up H.R. 4429, The Electronic Commerce Enhancement Act of
2000. A substitute amendment was offered and adopted by voice
vote. No additional amendments were offered to the substitute.
1. Mrs. Morella and Mr. Barcia offered a substitute
amendment making several changes to the bill. The substitute
streamlines the findings contained in the original text,
modifies the make-up of the Advisory Panel to allow the
Director of NIST to select relevant outside parties to
participate on the Advisory Panel rather than name specific
organizations in the bill, and better defines the goals of the
electronic commerce pilot program. In addition, the substitute
creates a new title to the bill to address the issue of
enterprise integration. The new title requires the Director of
NIST to conduct an assessment to identify critical enterprise
integration standards and implementation activities for major
manufacturing industries underway in the United States and to
report to Congress within 90 days of enactment on these
matters. The new title also requires the Director of NIST
within 180 days of enactment of the bill to submit a plan for
enterprise integration for each major manufacturing industry,
including milestones for NIST's part of the plan, and
anticipated costs to the Government and industry by fiscal
year. Finally, the new title requires yearly updates of these
plans until the Director of NIST determines that enterprise
integration for a particular industry has been achieved. The
substitute was adopted by voice vote.
With a quorum present, Mr. Hall moved the H.R. 4429, as
amended, be reported. The motion was adopted by a voice vote.

VI. Summary of Major Provisions of the Bill

Major provisions of H.R. 4429 are directed towards
assisting small and medium-sized manufacturers to successfully
integrate eCommerce into their business practices. The
legislation:
1. Requires the Director of the National Institute of
Standards and Technology (NIST) to establish an Advisory Panel
to report on the challenges facing small and medium size
manufacturers in integrating and utilizing electronic commerce
technologies. The Advisory Panel is to be comprised of
representatives of the technology Administration, the NIST's
Manufacturing Extension Partnership (MEP) program, the Small
Business Administration, and other relative parties as
identified by the Director.
2. Requires the Advisory Panel to submit an initial report
within 12 months from the date of enactment of the bill to the
Director of NIST, the House Science Committee, and the Senate
Committee on Commerce, Science, and Transportation detailing
the Advisory Panel's preliminary findings and recommendations.
3. Requires the Advisory Panel to issue a final report to
the Director of NIST, the House Science Committee, and the
Senate Committee on Commerce, Science, and Transportation
within 18 months of enactment of the Act. Requires the report
to contain a three-year planning document for NIST's MEP
program in the field of electronic commerce.
4. Allows the NIST MEP program, in conjunction with the
Small Business Administration, to establish a pilot program to
assist small and medium-sized manufacturers and other
businesses in integrating and utilizing electronic commerce
technologies and business practices. Requires the program to be
implemented through a competitive grants program to be awarded
among the existing MEP Regional Centers. Directs the MEP
program to consult with the Advisory Panel and utilize the
Advisory Panel's reports.
5. Requires the Director to conduct an assessment to
identify critical enterprise integration standards and
implementation activities for major manufacturing industries
underway in the U.S. Working in consultation with industry
representatives, the Director will identify the current state
of enterprise integration within the industry and detail the
remaining steps to be taken in achieving enterprise
integration. Requires the Director within 90 days after the
date of enactment of the bill to report to Congress on these
matters and on anticipated related NIST activities for the
current fiscal year.
6. Requires the Director within 180 days after the date of
enactment of the bill to submit a plan to Congress for
enterprise integration for each major manufacturing industry,
including milestones for NIST's part of the plan, and
anticipated costs to the Government and industry by fiscal
year. Requires that updates of the plans and a progress report
for the past year shall be submitted annually until for a given
industry, in the option of the Director, enterprise integration
has been achieved.

VII. Section-by-Section Analysis (By Title and Section)

Section 1. Short title

The Act's title is the ``Electronic Commerce Enhancement
Act of 2000.''

Title I: Electronic Commerce

Section 101. Findings

The Congress finds the following:
(1) Commercial transactions on the Internet, whether retail
business-to-customer or business-to-business, are commonly
called electronic commerce.
(2) In the United States, business-to-business transactions
between small and medium-sized manufacturers and other such
business and their suppliers is rapidly growing, as many of
these businesses begin to use Internet connections for supply-
chain management, after-sales support, and payments.
(3) Small and medium-sized manufacturers and other such
businesses play a critical role in the United States economy.
(4) Electronic commerce can help small and medium-sized
manufacturers and other such businesses develop new products
and markets, interact more quickly and efficiently with
suppliers and customers, and improve productivity by increasing
efficiency and reducing transaction costs and paperwork. Small
and medium-sized manufacturers and other such businesses who
fully exploit the potential of electronic commerce activities
can use it to interact with customers, suppliers, and the
public, for external support functions such as personnel
services and employee training.
(5) The National Institute of Standards and Technology's
Manufacturing Extension Partnership program has a successful
record assisting small and medium-sized manufacturers and other
such businesses. In addition, the Manufacturing Extension
Partnership program, working with the Small Business
Administration, successfully assisted United States small
enterprises in remediating their Y2K computer problems.
(6) A critical element of electronic commerce is the
ability of different electronic commerce systems to exchange
information. The continued growth of electronic commerce will
be enhanced by the development of private voluntary
interoperability standards and testbeds to ensure the
compatibility of different systems.

Section 102. Report on the utilization of electronic commerce

(a) Requires the Director of the National Institute of
Standards and Technology (NIST) to establish an Advisory Panel
to report on the challenges facing small and medium size
businesses in integrating and utilizing electronic commerce
technologies. The advisory Panel is to be comprised of
representatives of the Technology Administration, the NIST's
Manufacturing Extension Partnership (MEP) program, the Small
Business Administration, and other relative parties as
identified by the Director.
(b) Requires the Advisory Panel to submit an initial report
within 12 months from the date of enactment of the bill to the
Director of NIST, the House Science Committee, and the Senate
Committee on Commerce, Science, and Transportation. The report
should:
(1) describe the current utilization of electronic
commerce practices by small and medium-size
manufacturers and other businesses, detailing the
different levels between business-to-retail customers
and business-to-business transactions;
(2) describe and assess the utilization and need for
encryption and electronic authentication technologies,
and the security needs for electronically stored data
in electronic commerce for small and medium-sized
manufacturers and other businesses;
(3) identify the impact and problems of
interoperability to electronic commerce, and include an
economic assessment; and
(4) include a preliminary assessment of the
appropriate role of, and recommendations for, NIST's
MEP program to assist small and medium-sized
manufacturers and other businesses to integrate and
utilize electronic commerce technologies and business
practices.
(c) Requires the Advisory Panel to issue a final report to
the Director of NIST, the House Science Committee, and the
Senate Committee on Commerce, Science, and Transportation
within 18 months of enactment of the Act. The final report
shall include:
(1) a three-year planning document for the NIST MEP
program in the field of electronic commerce; and
(2) recommendations, if necessary, for NIST to
address interoperability issues in the field of
electronic commerce.
Committee views
The Committee believes that NIST can play an important role
in assisting small and medium-sized manufacturers in
integrating and utilizing electronic commerce technologies. By
creating the Advisory Panel, the Committee intends this body to
be an independent entity that can provide guidance to the
Director of NIST in deciding the best programs and policies to
implement that will be most beneficial to small and medium-
sized manufacturers. The Committee believes that the Director
should draw heavily on the expertise of outside, private sector
entities in creating the Advisory Panel. The preliminary report
required by the legislation should address the needs of the
industry and should be relied upon in drafting a more complete
plan for future NIST activities in this area. The Committee has
included a requirement that the Advisory Panel include a three-
year planning document for NIST in its final report. The
Committee believes it is important for NIST to have a solid
plan in place before moving forward with any initiatives to
help small and medium-sized manufacturers in electronic
commerce.

Section 103. Electronic Commerce Pilot Program

Allows the NIST MEP program, in conjunction with the Small
Business Administration, to establish a pilot program to assist
small and medium-sized manufacturers and other businesses in
integrating and utilizing electronic technologies and business
practices. Requires the program to be implemented through a
competitive grants program to be awarded among the existing MEP
Regional Centers. Directs the MEP program to consult with the
Advisory Panel and utilize the Advisory Panel's reports.
Committee views
The purpose of the pilot program is to create a testbed for
different practices and ideas to determine which work best. The
pilot program should take into account the regional needs of
different manufacturing sectors. Rather than put in place a
one-size-fits-all federal program, the Committee believes the
pilot program can be used to determine which practices work
best in each geographic and industry sector. It is the intent
of the Committee that no single MEP Regional Center is singled-
out for participation in the pilot program through this
legislation, but that the program is implemented through a
competitive awards process. The Committee does not intend, nor
does it support, the creation of any new MEP Regional Centers
to take part in the pilot program. The legislation does not
authorize new federal dollars to implement the pilot program
and it is the intent of the Committee that it be funded
utilizing existing MEP funding.

Title II--Enterprise Integration

Section 201. Enterprise integration assessment and plan

(a) Requires the Director to conduct an assessment to
identify critical enterprise integration standards and
implementation activities for major manufacturing industries
underway in the U.S. Working in consultation with industry
representatives, the Director will identify the current state
of enterprise integration within the industry and detail the
remaining steps to be taken in achieving enterprise
integration. Requires the Director within 90 days after the
date of enactment of the bill to report to Congress on these
matters and on anticipated related NIST activities for the
current fiscal year.
(b) Requires the Director within 180 days after the date of
enactment of the bill to submit a plan to Congress for
enterprise integration for each major manufacturing industry,
including milestones for NIST's part of the plan, and
anticipated costs to the Government and industry by fiscal
year. Requires that updates of the plans and a progress report
for the past year shall be submitted annually until for a given
industry, in the opinion of the Director, enterprise
integration has been achieved.
Committee views
Preliminary evidence indicates that adoption of electronic
commerce based supply chains can significantly reduce business
costs in the manufacturing industry. The Committee believes the
assessment required in this section of the legislation will
help to better determine the importance of enterprise
integration and how it impacts small and medium-sized
manufacturers. Working together with industry, the Committee
believes NIST should develop a concrete plan before moving
forward with any enterprise integration initiatives. The
legislation requires, and the Committee expects, NIST to submit
its findings to Congress and to provide an annual update to
Congress on any activities NIST plans to undertake in a given
fiscal year regarding enterprise integration.

Section 202. Definitions

1. The term ``Director'' means the Director of the National
Institute of Standards and Technology.
2. The term ``enterprise integration'' means the electronic
linkage of manufacturers, assemblers, and suppliers to enable
the electronic exchange of product, manufacturing, and other
business data among all businesses in a product supply chain,
and such terms include related application protocols and other
related standards.
3. The term ``major manufacturing industry'' includes the
aerospace, automotive, electronics, ship building,
construction, home building, furniture, textile, and apparel
industries and such other industries as the Director
designates.

VIII. Cost Estimate

Rule XIII, clause 3(d)(2) of the House of Representatives
requires each committee report accompanying each bill or joint
resolution of a public character to contain: (1) an estimate,
made by such committee, of the costs which would be incurred in
carrying out such bill or joint resolution in the fiscal year
in which it is reported, and in each of the five fiscal years
following such fiscal year (or for the authorized duration of
any program authorized by such bill or joint resolution, if
less than five years); (2) a comparison of the estimate of
costs described in subparagraph (1) of this paragraph made by
such committee with an estimate of such costs made by any
Government agency and submitted to such committee; and (3) when
practicable, a comparison of the total estimated funding level
for the relevant program (or programs) with the appropriate
levels under current law. However, House rule XIII, clause
3(d)(3)(B) provides that this requirement does not apply when a
cost estimate and comparison prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974 has been timely submitted
prior to the filing of the report and included in the report
pursuant to House rule XIII, clause 3(c)(3). A cost estimate
and comparison prepared by the Director of the Congressional
Budget Office under section 402 of the Congressional Budget Act
of 1974 has been timely submitted to the Committee on Science
prior to the filing of this report and is included in this
report pursuant to House rule XIII, clause 3(c)(3).
Rule XIII, clause 3(c)(2) of the House of Representatives
requires each committee report that accompanies a measure
providing new budget authority (other than continuing
appropriations), new spending authority, or new credit
authority, or changes in revenues or tax expenditures to
contain a cost estimate, as required by section 308(a)(1) of
the Congressional Budget Act of 1974 and, when practicable with
respect to estimates of new budget authority, a comparison of
the total estimated funding level for the relevant program (or
programs) to the appropriate levels under current law. H.R.
4429 does not contain any new budget authority, credit
authority, or changes in revenues or tax expenditures. H.R.
4429 does not authorize additional discretionary spending.

IX. Congressional Budget Office Cost Estimate

U.S. Congress,
Congressional Budget Office,
Washington, DC, August 22, 2000.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on Science,
House of Representatives, Washington, DC.
Dear Mr. Chairman: As you requested, the Congressional
Budget Office has prepared the enclosed cost estimate for H.R.
4429, the Electronic Commerce Enhancement Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Taman
Morris and Kathleen Gramp.
Sincerely,
Steven Lieberman
(For Dan L. Crippen, Director).
Enclosure.

H.R. 4429--Electronic Commerce Enhancement Act of 2000

Summary: H.R. 4429 would authorize the National Institute
of Standards and Technology (NIST) to implement various
initiatives related to electronic commerce. The bill would
direct NIST to establish an advisory board on challenges facing
small and medium-sized businesses in using electronic commerce
technology and require that the board submit several reports
within 18 months after enactment. The bill also would direct
NIST to help small and medium-sized companies incorporate
electronic commerce technologies in their business practices
through a pilot program that would be implemented by grants to
Manufacturing Extension Partnership (MEP) centers. Other
provisions would direct NIST to assess standards and protocols
for electronically integrating data among major manufacturing
enterprises.
CBO estimates that implementing the bill would cost $10
million over the 2001-2005 period, assuming appropriation of
the necessary amounts. H.R. 4429 would not affect direct
spending or receipts; therefore, pay-as-you-go procedures would
not apply. The bill contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA) and would have no impact on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 4429 is shown in the following table.
For this estimate, CBO assumes that H.R. 4429 will be enacted
near the start of fiscal year 2001 and that the necessary
amounts will be appropriated each year. Estimated outlays are
based on historical spending patterns for NIST and information
provided by the agency. The cost of this legislation would fall
within budget function 370 (commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------
2001 2002 2003 2004 2005
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...................................... 6 4 0 0 0
Estimated Outlays.................................................. 1 4 3 1 1
----------------------------------------------------------------------------------------------------------------

According to NIST, most of the activities authorized by
this bill would be implemented in fiscal years 2001 and 2002
and would cost a total of about $10 million. Of that total,
about $1 million would be used in 2001 to administer both the
advisory board and the electronic commerce pilot program. CBO
estimates that NIST would dedicate $4 million in each of the
fiscal years 2001 and 2002 for grants to MEP centers as part of
the pilot program. Finally, we estimate that another $1 million
would be needed in 2001 to evaluate standards for data
integration among industries.
Pay-as-you-go considerations: None.
Integovernmental and private-sector impact: H.R. 4429
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal costs: Taman Morris and
Kathleen Gramp; impact on State, local, and tribal governments:
Victoria Heid Hall; impact on the private sector: Lauren Marks.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.

X. compliance with public law 104-4

H.R. 4429 contains no unfunded mandates.

XI. committee oversight findings and recommendations

Rule XIII, clause 3(c)(1) of the House of Representatives
requires each committee report to include oversight findings
and recommendations required pursuant to clause 2(b)(1) of rule
X. The Committee on Science's oversight findings and
recommendations are reflected in the body of this report.

XII. Oversight findings and recommendations by the committee on
government reform

Rule XIII, clause 3(c)(4) of the House of Representatives
requires each committee report to contain a summary of the
oversight findings and recommendations made by the House
Government Reform Committee pursuant to clause 4(c)(2) of rule
X, whenever such findings and recommendations have been
submitted to the Committee in a timely fashion. The Committee
on Science has received no such findings or recommendations
from the Committee on Government Reform.

XIII. Constitutional authority statement

Rule XIII, clause 3(d)(1) of the House of Representatives
requires each report of a committee on a bill or joint
resolution of a public character to include a statement citing
the specific powers granted to the Congress in the Constitution
to enact the law proposed by the bill or joint resolution.
Article I, section 8 of the Constitution of the United States
grants Congress the authority to enact H.R. 4429.

XIV. Federal advisory committee statement

The functions of the advisory committee established by H.R.
4429 are not currently being nor could they be performed by one
or more agencies or by enlarging the mandate of another
existing advisory committee.

XV. Congressional accountability act

The Committee finds that H.R. 4429 does not relate to the
terms and conditions of employment or access to public services
or accommodations within the meaning of section 102(b)(3) of
the Congressional Accountability Act (Public Law 104-1).

XVI. Statement on preemption of State, Local, or Tribal law

This bill is not intended to preempt any state, local, or
tribal law.

XVII. Changes in existing law made by the bill, as reported

Clause 3 of rule XIII of the Rules of the House of
Representatives requires that changes in existing law made by
the bill, as reported, be included in the report.
This bill makes no direct amendments to any Act.

XVIII. Committee Recommendations

On July 26, 2000, a quorum being present, the Committee on
Science favorably reported H.R. 4299, The Electronic Commerce
Enhancement Act of 2000, by a voice vote, and recommends its
enactment.

XIX. Proceedings of the Full Committee markup

BUSINESS MEETING

WEDNESDAY, JULY 26, 2000

House of Representatives,
Committee on Science,
Washington, DC.
The committee met, pursuant to call, at 2:04 p.m. in room
2318, Rayburn House Office Building, Hon. F. James
Sensenbrenner, Jr. [chairman of the committee] presiding.
Chairman Sensenbrenner. The Committee on Science will come
to order.
The Chair notes the presence of a working quorum. And
pursuant to notice, the Committee on Science will consider
today the following measures: First, H.R. 2413, the Computer
Security Enhancement Act of 1999, as amended by the
Subcommittee on Technology; H.R. 4429, the Electronic Commerce
Enhancement Act of 2000; and H.R. 4271, the National Science
Education Act.
At this time, I ask unanimous consent for the authority to
recess at any point. And without objection, it is so ordered.
We will now consider H.R. 2413, the Computer Security
Enhancement Act of 1999, as amended by the Subcommittee on
Technology. And the Subcommittee Chair is not here.
So, we will try the next bill, which is H.R. 4429, the
Electronic Commerce Enhancement Act of 2000. Does the gentleman
from Texas move to adjourn?
Mr. Hall. It would be a good idea. [Laughter.]
Chairman Sensenbrenner. Well, let's do H.R. 4429. This
should go fairly quickly. Yes? You are asking me to put aside a
Democratic bill for a Republican bill? Let's do the Democratic
bill, okay.
This bill was introduced by the Ranking Member of the
Technology Subcommittee, Mr. Barcia, and the Chairman of the
Energy and Environment Subcommittee, Mr. Calvert, on May 11th
of this year. The legislation addresses the needs of small and
medium-sized manufacturers in implementing the successful
electronic commerce business practices. I would ask unanimous
consent that all members may submit opening statements at this
point.
[A copy of the bill H.R. 4429 follows:]

Chairman Sensenbrenner. And at this time, I yield to the
gentleman from Texas, Mr. Hall, for whatever statement he would
like to make.
Mr. Hall. Mr. Chairman, thank you. I also consider H.R.
4429 to be very important legislation and wish to compliment
Congressman Barcia for his persistence in focusing the
Committee on the impacts that electronic commerce is having on
small business throughout our country.
Competing as a small businessman can be very tough under
the best of circumstances, and it gets just that much harder
during times of rapid change. Today, computers and e-commerce
are turning many small businessmen's world on its head. And I
compliment Mr. Barcia and his cosponsors for writing
legislation to make sure that the small businesses have the
information and expertise available to them through the
Manufacturing Extension Program to make intelligent decisions
as they move into the Internet.
Congressmen Barcia, Rivers, and Stabenow have also
introduced H.R. 4906 this week that aggressively addresses
another small business problem that is just around the corner.
According to recent testimony before the Technology
Subcommittee, European governments are spending over $45
million per year to develop standards that will permit
companies to exchange manufacturing data instantaneously and,
in effect, establish vital manufacturing enterprises.
H.R. 4906 provides for a meaningful U.S. role in the
development of these standards and for developing the tools
that small businesses will need to participate in this new way
of doing business. Two subsections from H.R. 4906 are being
added to the bill before us, and we appreciate the Chairman's
willingness to work with us further on this important problem
as the legislation progresses.
At this time, I yield the balance of my time to Mr. Barcia.
[The prepared statement of Mr. Hall follows:]

Statement of Hon. Ralph M. Hall

Mr. Chairman, I also consider H.R. 4429 to be very
important legislation and wish to complement Congressman Barcia
for his persistence in focusing this Committee on the impacts
that electronic commerce is having on small businesses
throughout this country. Competing as a small businessman can
be tough under the best of circumstances and it gets just that
much harder during times of rapid change. Today, computers and
e-commerce are turning many small businessmen's worlds on their
heads.
I complement Mr. Barcia and his cosponsors for writing
legislation to make sure that small business have the
information and expertise available to them through the
Manufacturing Extension Program to make intelligent decisions
as they move onto the Internet.
Congressmen Barcia, Rivers, and Stabenow also introduced
H.R. 4906 this week that aggressively addressed another small
business problem that is just around the corner. According to
recent testimony before the Technology Subcommittee, European
governments are spending over $45 million per year to develop
standards that will permit companies to exchange manufacturing
data instantaneously and in effect establish virtual
manufacturing enterprises. H.R. 4906 provides for a meaningful
U.S. role in the development of these standards and for
developing the tools that small business will need to
participate in this new way of doing business. Two subsections
from H.R. 4906 are being added to the bill before us. We
appreciate the Chairman's willingness to work with us further
on this important problem as the legislation progresses.
I yield the balance of my time to Mr. Barcia.

Mr. Barcia. Thank you very much, Ranking Member Hall. I
want to begin by thanking Chairman Sensenbrenner, yourself, and
Chairwoman Morella for bringing this bill before the Committee.
H.R. 4429, the Electronic Commerce Enhancement Act, is a
bipartisan effort to assist small and medium-sized
manufacturers bring their businesses on line. I introduced this
bill, along with Representatives Calvert, Baird, Doyle, and
Udall, earlier this year. This bill is the result of Technology
Subcommittee hearings and a district event I held on the e-
commerce needs of small and medium-sized manufacturers.
As large companies move their business transactions on
line, small manufacturers must go on line, too. Unfortunately,
many of these smaller manufacturers do not have the information
they need to make informed decisions on e-commerce-related
purchases and services. As one small manufacturer put it, ``I
know whether I need a $20,000 or a $30,000 truck. But I do not
have any idea of whether I need a $5,000 or a $50,000 e-mail
server.''
The goal of this legislation is to provide our small
businesses with the information and knowledge they need to make
these business decisions. This bill builds upon the successful
Manufacturing Extension Partnership, or MEP program. The bill
authorizes the establishment of an advisory panel to determine
the e-commerce needs of small businesses. The panel will then
report to Congress on its findings and will prepare a planning
document for the MEP to follow. The MEP, working with this
advisory panel, will begin to establish a pilot program at MEP
centers. The goal of this pilot program is to allow MEP centers
to provide small manufacturers with the information they need
to make informed purchases of e-commerce products and services.
I want to thank Chairwoman Morella for the series of
hearings she has held on e-commerce during the past year. These
hearings focused my attention on this issue and highlighted the
challenges facing our small manufactures. I believe this bill
represents sound and reasonable policy and builds upon the
successful track record of the Manufacturing Extension
Partnership program, and I urge my colleagues to support it.
Thank you very much, Mr. Chairman.
Chairman Sensenbrenner. The gentleman from Texas has 40
seconds left. Do you yield back?
Mr. Hall. Unless the gentleman wants to make a motion about
his bill.
Chairman Sensenbrenner. Well, we have got one amendment we
have got to offer.
Mr. Hall. I yield back my time. Thank you, Mr. Chairman.
Chairman Sensenbrenner. The one amendment the Chair is
aware of is an amendment in the nature of a substitute by Mrs.
Morella and Mr. Barcia. And at this time, the Chair recognizes
the gentlewoman from Maryland in order to offer her substitute.
Mrs. Morella. Thank you, Mr. Chairman. I have an amendment
at the desk.
Chairman Sensenbrenner. The Clerk will report the
amendment.
The Clerk. Amendment in the nature of a substitute to H.R.
4429, offered by Mrs. Morella and Mr. Barcia.
Mrs. Morella. Mr. Chairman, I move that the amendment be
considered as read.
Chairman Sensenbrenner. Without objection.
Mrs. Morella. Thank you.
Chairman Sensenbrenner. The gentlewoman is recognized for
five minutes.
Mrs. Morella. Thank you. I want to thank the Chairman for
convening this markup of H.R. 4429, the Electronic Commerce
Enhancement Act of 2000. I want to thank my colleague, Mr.
Barcia, for the work that he has done and for introducing this
important legislation, and the other cosponsors, and this
Committee, and our Technology Subcommittee.
As amended by the substitute, H.R. 4429 seeks to help small
and medium-sized manufacturers from across the country to fully
integrate and utilize electronic commerce in their everyday
business practices. Last fall, the Technology Subcommittee
convened a hearing looking at the challenges and the
opportunities facing small and medium-sized manufacturers in
the coming decade, and implementing successful electronic
commerce strategies emerged as one of the industry's top
priorities. We had a number of small manufacturers testify as
well as the president of the National Association of
Manufacturers, Mr. Jerry Jazonowski. They all agreed that we
need to address this issue and that NIST can play an important
role in helping to achieve this goal.
So I urge my colleagues to join in supporting the
Electronic Commerce Enhancement Act of 2000, this substitute
amendment.
I yield back, Mr. Chairman.
[The amendment in the nature of a substitute offered by
Mrs. Morella follows:]
Chairman Sensenbrenner. Any further discussion on the
amendment?
The gentleman from Michigan, Mr. Barcia?
Mr. Barcia. Mr. Chairman, I want to just take----
Chairman Sensenbrenner. You are recognized for five
minutes.
Mr. Barcia. I certainly won't take that long. I just want
to thank Chairwoman Morella and yourself for working together
on this amendment and I urge its adoption. I think it is a
great improvement to the bill, and I thank both of you.
Chairman Sensenbrenner. Does the gentleman yield back.
Is there further discussion on the amendment?
[No response.]
Chairman Sensenbrenner. Hearing none, all those in favor of
the amendment in the nature of a substitute will signify by
saying aye.
[Chorus of ayes.]
Chairman Sensenbrenner. Opposed, no.
[No response.]
Chairman Sensenbrenner. The ayes appear to have it. The
ayes have it, and the amendment is agreed to.
Are there any further amendments to the bill?
[No response.]
Chairman Sensenbrenner. If not, the Chair recognizes the
gentleman from Michigan to make a motion.
Mr. Barcia. Yes, Mr. Chairman, I move that the Committee
favorably report H.R. 4429, as amended, to the House with the
recommendation that the bill as amended do pass.
Further, I move that staff be instructed to prepare the
legislative report and make necessary technical and conforming
amendments and that the Chairman take all necessary steps to
bring the bill before the House for consideration.
Chairman Sensenbrenner. Is there any discussion on the
motion of the gentleman from Michigan?
[No response.]
Chairman Sensenbrenner. If not, the Chair notes the
presence of a reporting quorum. Those in favor will signify by
saying aye.
[Chorus of ayes.]
Chairman Sensenbrenner. Opposed, no.
[No response.]
Chairman Sensenbrenner. The ayes appear to have it. The
ayes have it, and the bill is reported.
Without objection, the Chair will be given authority to
move to conference pursuant to Rule 20 of the Rules of the
House of Representatives, Rule 22, excuse me.
Without objection, the staff will be given the authority to
make any necessary technical and conforming changes. And
pursuant to the rules, any member or the minority will have two
calendar days in which to submit additional dissenting or
supplemental views for the Committee Report.

Committee on Science Full Committee Markup, July 26, 2000--Amendment
Roster for H.R. 4429, Electronic Commerce Enhancement Act of 2000

No. and Sponsor, description, results:
1. Mrs. Morella and Mr. Barcia, amendment in the nature of
a substitute to H.R. 4429, adopted by a voice vote.
------

Amendment in the Nature of a Substitute to H.R. 4429 Offered by Mrs.
Morella and Mr. Barcia

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Electronic Commerce Enhancement Act of
2000''.

TITLE I--ELECTRONIC COMMERCE

SEC. 101. FINDINGS.

SEC. 102. REPORT ON THE UTILIZATION OF ELECTRONIC COMMERCE.

SEC. 103. ELECTRONIC COMMERCE PILOT PROGRAM.

TITLE II--ENTERPRISE INTEGRATION

SEC. 201. ENTERPRISE INTEGRATION ASSESSMENT AND PLAN.

SEC. 202. DEFINITIONS.

For purposes of this title--
(1) the term ``Director'' means the Director of the National
Institute of Standards and Technology;
(2) the term ``enterprise integration'' means the electronic
linkage of manufacturers, assemblers, and suppliers to enable
the electronic exchange of product, manufacturing, and other
business data among all businesses in a product supply chain,
and such term includes related application protocols and other
related standards; and
(3) the term ``major manufacturing industry'' includes the
aerospace, automotive, electronics, shipbuilding, construction,
home building, furniture, textile, and apparel industries and
such other industries as the Director designates.
Amend the title so as to read: ``A bill to require the Director
of the National Institute of Standards and Technology to assist small
and medium-sized manufacturers and other such businesses to
successfully integrate and utilize electronic commerce technologies and
business practices, and to authorize the National Institute of
Standards and Technology to assess critical enterprise integration
standards and implementation activities for major manufacturing
industries and to develop a plan for enterprise integration for each
major manufacturing industry.