106TH CONGRESS

2D SESSION S. 761

AMENDMENTS
In the House of Representatives, U. S.,

February 16, 2000.

Resolved, That the bill from the Senate (S. 761) entitled

‘‘An Act 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’’, do pass with the following

AMENDMENTS:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Electronic Signatures

3 in Global and National Commerce Act’’.

4 TITLE I—VALIDITY OF ELEC5 TRONIC RECORDS AND SIG6 NATURES FOR COMMERCE

7 SEC. 101. GENERAL RULE OF VALIDITY.

8 (a) GENERAL RULE.—With respect to any contract,

9 agreement, or record entered into or provided in, or affect10 ing, interstate or foreign commerce, notwithstanding any

11 statute, regulation, or other rule of law, the legal effect, va12 lidity, or enforceability of such contract, agreement, or

13 record shall not be denied—
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1 (1) on the ground that the contract, agreement,

2 or record is not in writing if the contract, agreement,

3 or record is an electronic record; or

4 (2) on the ground that the contract, agreement,

5 or record is not signed or is not affirmed by a signa6 ture if the contract, agreement, or record is signed or

7 affirmed by an electronic signature.

8 (b) AUTONOMY OF PARTIES IN COMMERCE.—

9 (1) IN GENERAL.—With respect to any contract,

10 agreement, or record entered into or provided in, or

11 affecting, interstate or foreign commerce—

12 (A) the parties to such contract, agreement,

13 or record may establish procedures or require14 ments regarding the use and acceptance of elec15 tronic records and electronic signatures accept16 able to such parties;

17 (B) the legal effect, validity, or enforce18 ability of such contract, agreement, or record

19 shall not be denied because of the type or method

20 of electronic record or electronic signature se21 lected by the parties in establishing such proce22 dures or requirements; and

23 (C) nothing in this section requires any

24 party to use or accept electronic records or elec25 tronic signatures.
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1 (2) CONSENT TO ELECTRONIC RECORDS.—Not2 withstanding subsection (a) and paragraph (1) of this

3 subsection—

4 (A) if a statute, regulation, or other rule of

5 law requires that a record be provided or made

6 available to a consumer in writing, that require7 ment shall be satisfied by an electronic record

8 if—

9 (i) the consumer has affirmatively con10 sented, by means of a consent that is con11 spicuous and visually separate from other

12 terms, to the provision or availability

13 (whichever is required) of such record (or

14 identified groups of records that include

15 such record) as an electronic record, and

16 has not withdrawn such consent;

17 (ii) prior to consenting, the consumer

18 is provided with a statement of the hard19 ware and software requirements for access

20 to and retention of electronic records; and

21 (iii) the consumer affirmatively ac22 knowledges, by means of an acknowledge23 ment that is conspicuous and visually sepa24 rate from other terms, that—
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1 (I) the consumer has an obliga2 tion to notify the provider of electronic

3 records of any change in the con4 sumer’s electronic mail address or

5 other location to which the electronic

6 records may be provided; and

7 (II) if the consumer withdraws

8 consent, the consumer has the obliga9 tion to notify the provider to notify the

10 provider of electronic records of the

11 electronic mail address or other loca12 tion to which the records may be pro13 vided; and

14 (B) the record is capable of review, reten15 tion, and printing by the recipient if accessed

16 using the hardware and software specified in the

17 statement under subparagraph (A)(ii) at the

18 time of the consumer’s consent; and

19 (C) if such statute, regulation, or other rule

20 of law requires that a record be retained, that re21 quirement shall be satisfied if such record com22 plies with the requirements of subparagraphs (A)

23 and (B) of subsection (c)(1).

24 (c) RETENTION OF CONTRACTS, AGREEMENTS, AND

25 RECORDS.—
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1 (1) ACCURACY AND ACCESSIBILITY.—If a statute,

2 regulation, or other rule of law requires that a con3 tract, agreement, or record be in writing or be re4 tained, that requirement is met by retaining an elec5 tronic record of the information in the contract,

6 agreement, or record that—

7 (A) accurately reflects the information set

8 forth in the contract, agreement, or record after

9 it was first generated in its final form as an

10 electronic record; and

11 (B) remains accessible, for the period re12 quired by such statute, regulation, or rule of law,

13 for later reference, transmission, and printing.

14 (2) EXCEPTION.—A requirement to retain a con15 tract, agreement, or record in accordance with para16 graph (1) does not apply to any information whose

17 sole purpose is to enable the contract, agreement, or

18 record to be sent, communicated, or received.

19 (3) ORIGINALS.—If a statute, regulation, or

20 other rule of law requires a contract, agreement, or

21 record to be provided, available, or retained in its

22 original form, or provides consequences if the con23 tract, agreement, or record is not provided, available,

24 or retained in its original form, that statute, regula-
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1 tion, or rule of law is satisfied by an electronic record

2 that complies with paragraph (1).

3 (4) CHECKS.—If a statute, regulation, or other

4 rule of law requires the retention of a check, that re5 quirement is satisfied by retention of an electronic

6 record of all the information on the front and back

7 of the check in accordance with paragraph (1).

8 (d) ABILITY TO CONTEST SIGNATURES AND

9 CHARGES.—Nothing in this section shall be construed to

10 limit or otherwise affect the rights of any person to assert

11 that an electronic signature is a forgery, is used without

12 authority, or otherwise is invalid for reasons that would

13 invalidate the effect of a signature in written form. The use

14 or acceptance of an electronic record or electronic signature

15 by a consumer shall not constitute a waiver of any sub16 stantive protections afforded consumers under the Consumer

17 Credit Protection Act.

18 (e) SCOPE.—This Act is intended to clarify the legal

19 status of electronic records and electronic signatures in the

20 context of writing and signing requirements imposed by

21 law. Nothing in this Act affects the content or timing of

22 any disclosure required to be provided to any consumer

23 under any statute, regulation, or other rule of law.
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1 SEC. 102. AUTHORITY TO ALTER OR SUPERSEDE GENERAL

2 RULE.

3 (a) PROCEDURE TO ALTER OR SUPERSEDE.—Except

4 as provided in subsection (b), a State statute, regulation,

5 or other rule of law may modify, limit, or supersede the

6 provisions of section 101 if such statute, regulation, or rule

7 of law—

8 (1)(A) constitutes an enactment or adoption of

9 the Uniform Electronic Transactions Act as reported

10 to the State legislatures by the National Conference of

11 Commissioners on Uniform State Laws; or

12 (B) specifies the alternative procedures or re13 quirements for the use or acceptance (or both) of elec14 tronic records or electronic signatures to establish the

15 legal effect, validity, or enforceability of contracts,

16 agreements, or records; and

17 (2) if enacted or adopted after the date of the en18 actment of this Act, makes specific reference to this

19 Act.

20 (b) LIMITATIONS ON ALTERATION OR SUPERSES21 SION.—A State statute, regulation, or other rule of law (in22 cluding an insurance statute, regulation, or other rule of

23 law), regardless of its date of the enactment or adoption,

24 that modifies, limits, or supersedes section 101 shall not be

25 effective to the extent that such statute, regulation, or rule—
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1 (1) discriminates in favor of or against a spe2 cific technology, process, or technique of creating, stor3 ing, generating, receiving, communicating, or authen4 ticating electronic records or electronic signatures;

5 (2) discriminates in favor of or against a spe6 cific type or size of entity engaged in the business of

7 facilitating the use of electronic records or electronic

8 signatures;

9 (3) is based on procedures or requirements that

10 are not specific or that are not publicly available; or

11 (4) is otherwise inconsistent with the provisions

12 of this title.

13 (c) EXCEPTION.—Notwithstanding subsection (b), a

14 State may, by statute, regulation, or rule of law enacted

15 or adopted after the date of the enactment of this Act, re16 quire specific notices to be provided or made available in

17 writing if such notices are necessary for the protection of

18 the public health or safety of consumers. A consumer may

19 not, pursuant to section 101(b)(2), consent to the provision

20 or availability of such notice solely as an electronic record.

21 SEC. 103. SPECIFIC EXCLUSIONS.

22 (a) EXCEPTED REQUIREMENTS.—The provisions of

23 section 101 shall not apply to a contract, agreement, or

24 record to the extent it is governed by—
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1 (1) a statute, regulation, or other rule of law

2 governing the creation and execution of wills, codicils,

3 or testamentary trusts;

4 (2) a statute, regulation, or other rule of law

5 governing adoption, divorce, or other matters of fam6 ily law;

7 (3) the Uniform Commercial Code, as in effect in

8 any State, other than sections 1-107 and 1-206 and

9 Articles 2 and 2A;

10 (4) any requirement by a Federal regulatory

11 agency or self-regulatory organization that records be

12 filed or maintained in a specified standard or stand13 ards (including a specified format or formats), except

14 that nothing in this paragraph relieves any Federal

15 regulatory agency of its obligations under the Govern16 ment Paperwork Elimination Act (title XVII of Pub17 lic Law 105–277);

18 (5) the Uniform Anatomical Gift Act; or

19 (6) the Uniform Health-Care Decisions Act.

20 (b) ADDITIONAL EXCEPTIONS.—The provisions of sec21 tion 101 shall not apply to—

22 (1) any contract, agreement, or record entered

23 into between a party and a State agency if the State

24 agency is not acting as a market participant in or

25 affecting interstate commerce;
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1 (2) court orders or notices, or official court docu2 ments (including briefs, pleadings, and other

3 writings) required to be executed in connection with

4 court proceedings; or

5 (3) any notice concerning—

6 (A) the cancellation or termination of util7 ity services (including water, heat, and power);

8 (B) default, acceleration, repossession, fore9 closure, or eviction, or the right to cure, under

10 a credit agreement secured by, or a rental agree11 ment for, a primary residence of an individual;

12 or

13 (C) the cancellation or termination of

14 health insurance or benefits or life insurance

15 benefits (excluding annuities).

16 SEC. 104. STUDY.

17 (a) FOLLOWUP STUDY.—Within 5 years after the date

18 of the enactment of this Act, the Secretary of Commerce,

19 acting through the Assistant Secretary for Communications

20 and Information, shall conduct an inquiry regarding any

21 State statutes, regulations, or other rules of law enacted or

22 adopted after such date of the enactment pursuant to section

23 102(a), and the extent to which such statutes, regulations,

24 and rules comply with section 102(b).
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1 (b) REPORT.—The Secretary shall submit a report to

2 the Congress regarding the results of such inquiry by the

3 conclusion of such 5-year period.

4 (c) ADDITIONAL STUDY OF DELIVERY.—Within 18

5 months after the date of the enactment of this Act, the Sec6 retary of Commerce shall conduct an inquiry regarding the

7 effectiveness of the delivery of electronic records to con8 sumers using electronic mail as compared with delivery of

9 written records via the United States Postal Service and

10 private express mail services. The Secretary shall submit

11 a report to the Congress regarding the results of such in12 quiry by the conclusion of such 18-month period.

13 SEC. 105. DEFINITIONS.

14 For purposes of this title:

15 (1) ELECTRONIC RECORD.—The term ‘‘electronic

16 record’’ means a writing, document, or other record

17 created, stored, generated, received, or communicated

18 by electronic means.

19 (2) ELECTRONIC SIGNATURE.—The term ‘‘elec20 tronic signature’’ means information or data in elec21 tronic form, attached to or logically associated with

22 an electronic record, and executed or adopted by a

23 person or an electronic agent of a person, with the in24 tent to sign a contract, agreement, or record.
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1 (3) ELECTRONIC.—The term ‘‘electronic’’ means

2 of or relating to technology having electrical, digital,

3 magnetic, optical, electromagnetic, or similar capa4 bilities regardless of medium.

5 (4) ELECTRONIC AGENT.—The term ‘‘electronic

6 agent’’ means a computer program or an electronic or

7 other automated means used independently to initiate

8 an action or respond to electronic records in whole or

9 in part without review by an individual at the time

10 of the action or response.

11 (5) RECORD.—The term ‘‘record’’ means infor12 mation that is inscribed on a tangible medium or

13 that is stored in an electronic or other medium and

14 is retrievable in perceivable form.

15 (6) FEDERAL REGULATORY AGENCY.—The term

16 ‘‘Federal regulatory agency’ means an agency, as that

17 term is defined in section 552(f) of title 5, United

18 States Code, that is authorized by Federal law to im19 pose requirements by rule, regulation, order, or other

20 legal instrument.

21 (7) SELF-REGULATORY ORGANIZATION.—The

22 term ‘‘self-regulatory organization’’ means an organi23 zation or entity that is not a Federal regulatory agen24 cy or a State, but that is under the supervision of a

25 Federal regulatory agency and is authorized under
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1 Federal law to adopt and administer rules applicable

2 to its members that are enforced by such organization

3 or entity, by a Federal regulatory agency, or by an4 other self-regulatory organization.

5 TITLE II—DEVELOPMENT AND

6 ADOPTION OF ELECTRONIC

7 SIGNATURE PRODUCTS AND

8 SERVICES

9 SEC. 201. TREATMENT OF ELECTRONIC SIGNATURES IN

10 INTERSTATE AND FOREIGN COMMERCE.

11 (a) INQUIRY REGARDING IMPEDIMENTS TO COM12 MERCE.—

13 (1) INQUIRIES REQUIRED.—Within 180 days

14 after the date of the enactment of this Act, and bien15 nially thereafter, the Secretary of Commerce, acting

16 through the Assistant Secretary for Communications

17 and Information, shall complete an inquiry to—

18 (A) identify any domestic and foreign im19 pediments to commerce in electronic signature

20 products and services and the manners in which

21 and extent to which such impediments inhibit

22 the development of interstate and foreign com23 merce;

24 (B) identify constraints imposed by foreign

25 nations or international organizations that con-
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1 stitute barriers to providers of electronic signa2 ture products or services; and

3 (C) identify the degree to which other na4 tions and international organizations are com5 plying with the principles in subsection (b)(2).

6 (2) SUBMISSION.—The Secretary shall submit a

7 report to the Congress regarding the results of each

8 such inquiry within 90 days after the conclusion of

9 such inquiry. Such report shall include a description

10 of the actions taken by the Secretary pursuant to sub11 section (b) of this section.

12 (b) PROMOTION OF ELECTRONIC SIGNATURES.—

13 (1) REQUIRED ACTIONS.—The Secretary of Com14 merce, acting through the Assistant Secretary for

15 Communications and Information, shall promote the

16 acceptance and use, on an international basis, of elec17 tronic signatures in accordance with the principles

18 specified in paragraph (2) and in a manner con19 sistent with section 101 of this Act. The Secretary of

20 Commerce shall take all actions necessary in a man21 ner consistent with such principles to eliminate or re22 duce, to the maximum extent possible, the impedi23 ments to commerce in electronic signatures, including

24 those identified in the inquiries under subsection (a)
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1 for the purpose of facilitating the development of

2 interstate and foreign commerce.

3 (2) PRINCIPLES.—The principles specified in

4 this paragraph are the following:

5 (A) Free markets and self-regulation, rather

6 than Government standard-setting or rules,

7 should govern the development and use of elec8 tronic records and electronic signatures.

9 (B) Neutrality and nondiscrimination

10 should be observed among providers of and tech11 nologies for electronic records and electronic sig12 natures.

13 (C) Parties to a transaction should be per14 mitted to establish requirements regarding the

15 use of electronic records and electronic signatures

16 acceptable to such parties.

17 (D) Parties to a transaction—

18 (i) should be permitted to determine

19 the appropriate authentication technologies

20 and implementation models for their trans21 actions, with assurance that those tech22 nologies and implementation models will be

23 recognized and enforced; and

24 (ii) should have the opportunity to

25 prove in court or other proceedings that
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1 their authentication approaches and their

2 transactions are valid.

3 (E) Electronic records and electronic signa4 tures in a form acceptable to the parties should

5 not be denied legal effect, validity, or enforce6 ability on the ground that they are not in writ7 ing.

8 (F) De jure or de facto imposition of stand9 ards on private industry through foreign adop10 tion of regulations or policies with respect to

11 electronic records and electronic signatures

12 should be avoided.

13 (G) Paper-based obstacles to electronic

14 transactions should be removed.

15 (c) CONSULTATION.—In conducting the activities re16 quired by this section, the Secretary shall consult with users

17 and providers of electronic signature products and services

18 and other interested persons.

19 (d) PRIVACY.—Nothing in this section shall be con20 strued to require the Secretary or the Assistant Secretary

21 to take any action that would adversely affect the privacy

22 of consumers.

23 (e) DEFINITIONS.—As used in this section, the terms

24 ‘‘electronic record’’ and ‘‘electronic signature’’ have the
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1 meanings provided in section 104 of the Electronic Signa2 tures in Global and National Commerce Act.

3 TITLE III—USE OF ELECTRONIC

4 RECORDS AND SIGNATURES

5 UNDER FEDERAL SECURITIES

6 LAW

7 SEC. 301. GENERAL VALIDITY OF ELECTRONIC RECORDS

8 AND SIGNATURES.

9 Section 3 of the Securities Exchange Act of 1934 (15

10 U.S.C. 78c) is amended by adding at the end the following

11 new subsection:

12 ‘‘(h) REFERENCES TO WRITTEN RECORDS AND SIGNA13 TURES.—

14 ‘‘(1) GENERAL VALIDITY OF ELECTRONIC

15 RECORDS AND SIGNATURES.—Except as otherwise

16 provided in this subsection—

17 ‘‘(A) if a contract, agreement, or record (as

18 defined in subsection (a)(37)) is required by the

19 securities laws or any rule or regulation there20 under (including a rule or regulation of a self21 regulatory organization), and is required by

22 Federal or State statute, regulation, or other rule

23 of law to be in writing, the legal effect, validity,

24 or enforceability of such contract, agreement, or

25 record shall not be denied on the ground that the
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1 contract, agreement, or record is not in writing

2 if the contract, agreement, or record is an elec3 tronic record;

4 ‘‘(B) if a contract, agreement, or record is

5 required by the securities laws or any rule or

6 regulation thereunder (including a rule or regu7 lation of a self-regulatory organization), and is

8 required by Federal or State statute, regulation,

9 or other rule of law to be signed, the legal effect,

10 validity, or enforceability of such contract, agree11 ment, or record shall not be denied on the ground

12 that such contract, agreement, or record is not

13 signed or is not affirmed by a signature if the

14 contract, agreement, or record is signed or af15 firmed by an electronic signature; and

16 ‘‘(C) if a broker, dealer, transfer agent, in17 vestment adviser, or investment company enters

18 into a contract or agreement with, or accepts a

19 record from, a customer or other counterparty,

20 such broker, dealer, transfer agent, investment

21 adviser, or investment company may accept and

22 rely upon an electronic signature on such con23 tract, agreement, or record, and such electronic

24 signature shall not be denied legal effect, valid-
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1 ity, or enforceability because it is an electronic

2 signature.

3 ‘‘(2) IMPLEMENTATION.—

4 ‘‘(A) REGULATIONS.—The Commission may

5 prescribe such regulations as may be necessary to

6 carry out this subsection consistent with the pub7 lic interest and the protection of investors.

8 ‘‘(B) NONDISCRIMINATION.—The regulations

9 prescribed by the Commission under subpara10 graph (A) shall not—

11 ‘‘(i) discriminate in favor of or against

12 a specific technology, method, or technique

13 of creating, storing, generating, receiving,

14 communicating, or authenticating electronic

15 records or electronic signatures; or

16 ‘‘(ii) discriminate in favor of or

17 against a specific type or size of entity en18 gaged in the business of facilitating the use

19 of electronic records or electronic signatures.

20 ‘‘(3) EXCEPTIONS.—Notwithstanding any other

21 provision of this subsection—

22 ‘‘(A) the Commission, an appropriate regu23 latory agency, or a self-regulatory organization

24 may require that records be filed or maintained

25 in a specified standard or standards (including
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1 a specified format or formats) if the records are

2 required to be submitted to the Commission, an

3 appropriate regulatory agency, or a self-regu4 latory organization, respectively, or are required

5 by the Commission, an appropriate regulatory

6 agency, or a self-regulatory organization to be

7 retained; and

8 ‘‘(B) the Commission may require that con9 tracts, agreements, or records relating to pur10 chases and sales, or establishing accounts for

11 conducting purchases and sales, of penny stocks

12 be manually signed, and may require such man13 ual signatures with respect to transactions in

14 similar securities if the Commission determines

15 that such securities are susceptible to fraud and

16 that such fraud would be deterred or prevented

17 by requiring manual signatures.

18 ‘‘(4) RELATION TO OTHER LAW.—The provisions

19 of this subsection apply in lieu of the provisions of

20 title I of the Electronic Signatures in Global and Na21 tional Commerce Act to a contract, agreement, or

22 record (as defined in subsection (a)(37)) that is re23 quired by the securities laws.

24 ‘‘(5) SAVINGS PROVISION.—Nothing in this sub25 section applies to any rule or regulation under the se-
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1 curities laws (including a rule or regulation of a self2 regulatory organization) that is in effect on the date

3 of the enactment of the Electronic Signatures in Glob4 al and National Commerce Act and that requires a

5 contract, agreement, or record to be in writing, to be

6 submitted or retained in original form, or to be in a

7 specified standard or standards (including a specified

8 format or formats).

9 ‘‘(6) DEFINITIONS.—As used in this subsection:

10 ‘‘(A) ELECTRONIC RECORD.—The term ‘elec11 tronic record’ means a writing, document, or

12 other record created, stored, generated, received,

13 or communicated by electronic means.

14 ‘‘(B) ELECTRONIC SIGNATURE.—The term

15 ‘‘electronic signature’’ means information or

16 data in electronic form, attached to or logically

17 associated with an electronic record, and exe18 cuted or adopted by a person or an electronic

19 agent of a person, with the intent to sign a con20 tract, agreement, or record.

21 ‘‘(C) ELECTRONIC.—The term ‘electronic’

22 means of or relating to technology having elec23 trical, digital, magnetic, optical, electromagnetic,

24 or similar capabilities regardless of medium.’’.
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Amend the title so as to read ‘‘An Act to facilitate

the use of electronic records and signatures in interstate

or foreign commerce.’’.

Attest:

Clerk.