SECTION 1. SHORT TITLE.

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

SEC. 2. FINDINGS.

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

SEC. 3. PURPOSES.

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

SEC. 4. DEFINITIONS.

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

SEC. 5. INTERSTATE CONTRACT CERTAINTY.

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

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

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

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

    (a) Barriers.--Each Federal agency shall, not later than 6 months 
after the date of enactment of this Act, provide a report to the 
Director of the Office of Management and Budget and the Secretary of 
Commerce identifying any provision of law administered by such agency, 
or any regulations issued by such agency and in effect on the date of 
enactment of this Act, that may impose a barrier to electronic 
transactions, or otherwise to the conduct of commerce online or be 
electronic means. Such barriers include, but are not limited to, 
barriers imposed by a law or regulation directly or indirectly 
requiring that signatures, or records of transactions, be accomplished 
or retained in other than electronic form. In its report, each agency 
shall identify the barriers among those identified whose removal would 
require legislative action, and shall indicate agency plans to 
undertake regulatory action to remove such barriers among those 
identified as are caused by regulations issued by the agency.
    (b) Report to Congress.--The Secretary of Commerce, in consultation 
with the Director of the Office of Management and Budget, shall, within 
18 months after the date of enactment of this Act, and after the 
consultation required by subsection (c) of this section, report to the 
Congress concerning--
            (1) legislation needed to remove barriers to electronic 
        transactions or otherwise to the conduct of commerce online or 
        by electronic means; and
            (2) actions being taken by the Executive Branch and 
        individual Federal agencies to remove such barriers as are 
        caused by agency regulations or policies.
    (c) Consultation.--In preparing the report required by this 
section, the Secretary of Commerce shall consult with the General 
Services Administration, the National Archives and Records 
Administration, and the Attorney General concerning matters involving 
the authenticity of records, their storage and retention, and their 
usability for law enforcement purposes.
    (d) Include Findings If No Recommendations.--If the report required 
by this section omits recommendations for actions needed to fully 
remove identified barriers to electronic transactions or to online or 
electronic commerce, it shall include a finding or findings, including 
substantial reasons therefore, that such removal is impracticable or 
would be inconsistent with the implementation or enforcement of 
applicable laws.
Authorizes parties to an interstate transaction to determine the appropriate electronic signature technologies for their transaction, and the means of implementing such technologies. Denies the legal effect of an electronic record of a contract required by law to be in writing, unless it is delivered to all parties in a form that can be: (1) retained for later reference; and (2) used to prove agreement terms. Provides exclusions. Prohibits a contract relating to a commercial transaction from being denied legal effect solely because its formation involved electronic agents (computers or other automated means). States as the specific intent of Congress that this section apply to the business of insurance.
Directs the Federal Government, to the extent practicable, to observe certain principles governing the use of electronic signatures in international commercial transactions, including to: (1) remove paper-based obstacles to electronic transactions by adopting relevant principles from the Model Law on Electronic Commerce adopted in 1996 by the UN Commission on International Trade Law (UNCITRAL); (2) permit parties to a transaction to determine the appropriate authentication technologies for such transactions, with assurance that they will be recognized and enforced; (3) permit such parties to have the opportunity to prove in court that such authentication approaches and transactions are valid; and (4) take a nondiscriminatory approach to electronic signatures and authentication methods from other jurisdictions.
Directs each Federal agency to report to the Director of the Office of Management and Budget and the Secretary of Commerce on any provision of law administered, or regulation issued, by it that imposes a barrier to electronic transactions. Requires the Secretary to report to Congress concerning any legislation needed or Executive or Federal agency action being taken to remove such barriers.
Millennium Digital Commerce Act