79–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–661

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

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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

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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 who

has 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.

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(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

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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.

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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.—

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(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 reguVerDate 11-MAY-2000 08:57 Jun 09, 2000 Jkt 079006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6603 E:\HR\OC\A661HR.002 pfrm02 PsN: A661HR
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latory 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.

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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.

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(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.

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(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.

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(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

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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,

14

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.

(15)

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.

Æ