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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 761 Enrolled Bill (ENR)]

        S.761

                       One Hundred Sixth Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Monday,
             the twenty-fourth day of January, two thousand

                                 An Act

 
To facilitate the use of electronic records and signatures in interstate 
                          or foreign commerce.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

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

         TITLE I--ELECTRONIC RECORDS AND SIGNATURES IN COMMERCE

SEC. 101. GENERAL RULE OF VALIDITY.

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

SEC. 102. EXEMPTION TO PREEMPTION.

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

SEC. 103. SPECIFIC EXCEPTIONS.  

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

SEC. 104. APPLICABILITY TO FEDERAL AND STATE GOVERNMENTS.

    (a) Filing and Access Requirements.--Subject to subsection (c)(2), 
nothing in this title limits or supersedes any requirement by a Federal 
regulatory agency, self-regulatory organization, or State regulatory 
agency that records be filed with such agency or organization in 
accordance with specified standards or formats.
    (b) Preservation of Existing Rulemaking Authority.--
        (1) Use of authority to interpret.--Subject to paragraph (2) 
    and subsection (c), a Federal regulatory agency or State regulatory 
    agency that is responsible for rulemaking under any other statute 
    may interpret section 101 with respect to such statute through--
            (A) the issuance of regulations pursuant to a statute; or
            (B) to the extent such agency is authorized by statute to 
        issue orders or guidance, the issuance of orders or guidance of 
        general applicability that are publicly available and published 
        (in the Federal Register in the case of an order or guidance 
        issued by a Federal regulatory agency).
    This paragraph does not grant any Federal regulatory agency or 
    State regulatory agency authority to issue regulations, orders, or 
    guidance pursuant to any statute that does not authorize such 
    issuance.
        (2) Limitations on interpretation authority.--Notwithstanding 
    paragraph (1), a Federal regulatory agency shall not adopt any 
    regulation, order, or guidance described in paragraph (1), and a 
    State regulatory agency is preempted by section 101 from adopting 
    any regulation, order, or guidance described in paragraph (1), 
    unless--
            (A) such regulation, order, or guidance is consistent with 
        section 101;
            (B) such regulation, order, or guidance does not add to the 
        requirements of such section; and
            (C) such agency finds, in connection with the issuance of 
        such regulation, order, or guidance, that--
                (i) there is a substantial justification for the 
            regulation, order, or guidance;
                (ii) the methods selected to carry out that purpose--

                    (I) are substantially equivalent to the 
                requirements imposed on records that are not electronic 
                records; and
                    (II) will not impose unreasonable costs on the 
                acceptance and use of electronic records; and

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

SEC. 105. STUDIES.

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

SEC. 106. DEFINITIONS.

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

SEC. 107. EFFECTIVE DATE.

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

                     TITLE II--TRANSFERABLE RECORDS

SEC. 201. TRANSFERABLE RECORDS.

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

SEC. 202. EFFECTIVE DATE.

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

       TITLE III--PROMOTION OF INTERNATIONAL ELECTRONIC COMMERCE

    SEC. 301. PRINCIPLES GOVERNING THE USE OF ELECTRONIC SIGNATURES IN 
      INTERNATIONAL TRANSACTIONS.
    (a) Promotion of Electronic Signatures.--
        (1) Required actions.--The Secretary of Commerce shall promote 
    the acceptance and use, on an international basis, of electronic 
    signatures in accordance with the principles specified in paragraph 
    (2) and in a manner consistent with section 101 of this Act. The 
    Secretary of Commerce shall take all actions necessary in a manner 
    consistent with such principles to eliminate or reduce, to the 
    maximum extent possible, the impediments to commerce in electronic 
    signatures, for the purpose of facilitating the development of 
    interstate and foreign commerce.
        (2) Principles.--The principles specified in this paragraph are 
    the following:
            (A) Remove paper-based obstacles to electronic transactions 
        by adopting relevant principles from the Model Law on 
        Electronic Commerce adopted in 1996 by the United Nations 
        Commission on International Trade Law.
            (B) Permit parties to a transaction to determine the 
        appropriate authentication technologies and implementation 
        models for their transactions, with assurance that those 
        technologies and implementation models will be recognized and 
        enforced.
            (C) Permit parties to a transaction to have the opportunity 
        to prove in court or other proceedings that their 
        authentication approaches and their transactions are valid.
            (D) Take a nondiscriminatory approach to electronic 
        signatures and authentication methods from other jurisdictions.
    (b) Consultation.--In conducting the activities required by this 
section, the Secretary shall consult with users and providers of 
electronic signature products and services and other interested 
persons.
    (c) Definitions.--As used in this section, the terms ``electronic 
record'' and ``electronic signature'' have the same meanings provided 
in section 106 of this Act.

            TITLE IV--COMMISSION ON ONLINE CHILD PROTECTION

SEC. 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.''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
```