Calendar No. 581

105TH CONGRESS

2D SESSION S. 2107

[Report No. 105–335]

A BILL

To enhance electronic commerce by promoting the

other purposes.standards for electronic communication, and foractions through establishing authenticationreliability and integrity of commercial transSEPTEMBER 17, 1998

Reported with an amendment
II

Calendar No. 581

105TH CONGRESS

2D SESSION S. 2107

[Report No. 105–335]

To enhance electronic commerce by promoting the reliability and integrity

of commercial transactions through establishing authentication standards

for electronic communication, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 21, 1998

Mr. ABRAHAM (for himself, Mr. WYDEN, Mr. MCCAIN, Mr. REED, Mr. COCHRAN, Mr. LOTT, and Mr. BURNS) introduced the following bill; which was

read twice and referred to the Committee on Commerce, Science, and

Transportation

SEPTEMBER 17, 1998

Reported by Mr. MCCAIN, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To enhance electronic commerce by promoting the reliability

and integrity of commercial transactions through establishing authentication standards for electronic communication, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Government Paper3 work Elimination Act’’.

4 SEC. 2 STUDIES ON USE OF DIGITAL SIGNATURES TO EN5 HANCE ELECTRONIC COMMERCE.

6 The Assistant Secretary shall conduct an ongoing

7 study of the enhancement of electronic commerce due to

8 the use of digital signatures pursuant to this Act, and

9 shall report findings to the Commerce Committee of the

10 House and to the Commerce, Science, and Transportation

11 Committee of the Senate not later than—

12 (1) 12 months; and

13 (2) 60 months; after the date of enactment of

14 this Act.

15 SEC. 3. ELECTRONIC AVAILABILITY OF FORMS.

16 The Director, in accordance with technical standards

17 provided by the Assistant Secretary under section 6, shall

18 not later than 12 months after the date of enactment of

19 this Act establish a method for each Federal agency to

20 make its forms available electronically. Such forms shall

21 be—

22 (1) available for electronic submission (through

23 use of a digital signature when necessary);

24 (2) substantially identical in content and re25 quirements to any corresponding paper versions;
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1 (3) available on an Internet web site controlled

2 by the Federal Government that contains an elec3 tronic link to the website described in section 6(f) of

4 this Act;

5 (4) available for downloading and printing;

6 (5) available for electronic storage by employers

7 that are required by law to collect, store, or file

8 paper versions of forms completed by employees; and

9 (6) acknowledged upon receipt by an agency

10 through prompt issuance of an electronic receipt.

11 SEC. 4. PAYMENTS.

12 Under the method established under section 2—

13 (1) any payment associated with a form submit14 ted electronically shall be no greater than the pay15 ment associated with any corresponding printed ver16 sion of such form;

17 (2) not less than 2 means of electronic payment

18 shall be provided, but such payment may not be re19 quired to precede submission of a form; and

20 (3) a prompt receipt for electronic payment

21 shall be issued electronically to each person who sub22 mits a payment electronically.
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1 SEC. 5. USE OF DIGITAL SIGNATURES BY FEDERAL OFFI2 CIALS.

3 (a) AGENCY EMPLOYEES TO RECEIVE DIGITAL SIG4 NATURES.—The head of each agency shall issue guidelines

5 for determining how and which employees in each respec6 tive agency shall be provided digitalsignatures for use

7 within the scope of their employment.

8 (b) AVAILABILITY OF ELECTRONIC NOITCE.—An

9 agency may provide a person entitled to receive written

10 notice of a particular matter with the opportunity to re11 ceive electronic notice instead.

12 SEC. 6. CERTIFICATES FOR DIGITAL SIGNATURES.

13 (a) GUIDELINES FOR ACCEPTANCE OF CERTIFI14 CATES.—The Director shall issue guidelines governing the

15 manner in which agencies may accept certificates.

16 (b) ACCREDITATION.—Under the guidelines issued

17 under subsection (a), an agency shall accept certificates

18 issued by—

19 (1) the agency; or

20 (2) a trusted third party that is licensed or ac21 credited by—

22 (A) a State or local government; or

23 (B) an appropriate accreditation body.

24 (c) TRUSTED THIRD PARTY LIABILITY.—Under the

25 guidelines issued under subsection (a), an agency may ac26 cept a certificate only from a trusted third party that, in
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1 accordance with commercially reasonable standards, ac2 cepts liability for and is insured against negligent issuance

3 or handling of certificates.

4 (d) FOREIGN TRUSTED THIRD PARTY.—The Sec5 retary of State shall determine from which foreign coun6 tries agencies may accept certificates.

7 (e) AGENCY ESTABLISHMENT OF TRUSTED THIRD

8 PARTY.—No agency may establish a trusted third party

9 except to—

10 (1) provide digital signatures to its employees;

11 (2) issue certificates relating to messages sent

12 by such employees; or

13 (3) act as a reliable authority on behalf on an14 other trusted third party.

15 (f) DIRECTORY OF QUALIFIED TRUSTED THIRD

16 PARTIES.—The Assistant Secretary shall compile and post

17 on a website controlled by the Federal Government a list

18 of trusted third parties (along with an electronic link, if

19 any, to a web site controlled by each trusted third party)

20 that are qualified under this section to issue certificates.

21 SEC. 7. STANDARDS FOR DIGITAL SIGNATURES; EFFECT OF

22 DIGITAL SIGNATURES.

23 (a) TECHNICAL STANDARDS FOR DIGITAL SIGNA24 TURES.—The Assistant Secretary shall provide to the Di25 rector technical standards for the digital signatures ac-
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1 cepted for purposes of the method established under sec2 tion 2 or provided under section 4.

3 (b) COMPATIBILITY WITH PRIVATE SECTOR.—The

4 standards referred to in subsection (a) shall be compatible

5 with standards and technology for digital signatures used

6 in commerce and industry and by State governments.

7 (c) STANDARDS SHALL BE TECHNOLOGY NEU8 TRAL.—The Secretary, in setting standards for digital sig9 nature technologies to be used by the Federal Govern10 ment, shall take all steps necessary to ensure that such

11 standards do not inappropriately favor one industry.

12 (d) RELIABILITY OF DIGITAL SIGNATURES.—Under

13 the standards referred to in subsection (a), a digital signa14 ture shall be as reliable as is appropriate for the purpose

15 for which an electronic message containing a digital signa16 ture is generated, in light of all the circumstances, includ17 ing any relevant agreement.

18 (e) LEGAL SIGNIFICANCE OF DIGITAL SIGNA19 TURES.—For purposes of digital signed forms accepted

20 under section 2, a digital signature shall have the same

21 force and effect as a written signature.

22 SEC. 8. EMPLOYER ELECTRONIC STORAGE OF FORMS.

23 If an employer is required by law to collect, store,

24 or file paper forms that are completed by employees, such
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1 employer may store such formselectronically if such forms

2 are submitted electronically.

3 SEC. 9. IMPLEMENTATION BY AGENCIES.

4 (a) IMPLEMENTATION.—Not later than 36 months

5 after the date of enactment of this Act, each agency shall

6 implement the method established under section 2 of this

7 Act and the guidelines issued under section 4 of this Act.

8 (b) REPORT TO CONGRESS.—Not later than 12

9 months after the date of enactment of this Act, the Assist10 ant Secretary shall submit a report to the Commerce Com11 mittee of the House and to the Commerce, Science, and

12 Transportation Committee of the Senate that details the

13 technical standards described in section 6.

14 SEC. 10. SENSE OF THE CONGRESS.

15 Because there is no meaningful difference between

16 contracts executed in the digital world and contracts exe17 cuted in the analog world, it is the sense of the Congress

18 that such contracts should be treated similarly under fed19 eral law. It is further the sense of the Congress that such

20 contracts should be treated similarly under state law.

21 SEC. 11. DEFINITIONS.

22 For purposes of this Act:

23 (1) ASSISTANT SECRETARY.—The term ‘Assist24 ant Secretary’ means the Assistant Secretary for

25 Communications and Information (the head of the
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1 National Telecommunications and Information Ad2 ministration) of the Department of Commerce.

3 (2) AGENCY.—The term ‘agency’ has the mean4 ing given the term ‘executive agency’ in section 105

5 of title 5, United States Code.

6 (3) CERTIFICATE.—(A) The term ‘certificate’

7 means a statement meeting the requirements of sub8 paragraph (B) that permits a person holding such

9 statement to determine that a digital signed mes10 sage—

11 (i) was signed by the person whose digital

12 signature appears to be attached to the mes13 sage; and

14 (ii) has not been altered since the digital

15 signature was attached.

16 (B) For purposes of subparagraph (A), the

17 statement must—

18 (i) identify the trusted third party or agen19 cy issuing such statement;

20 (ii) identify the person whose digital signa21 ture the trusted third party or agency is au22 thenticating with such statement;

23 (iii) specify the operational period of such

24 statement; and
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1 (iv) be digitally signed by the trusted third

2 party or agency issuing such statement.

3 (4) DIGITAL SIGNATURE.—The term ‘digital

4 signature’ means a method of signing an electronic

5 message that—

6 (A) identifies a particular person as the

7 source of such electronic message; and

8 (B) indicates such person’s approval of the

9 information contained in such electronic mes10 sage.

11 (5) DIRECTOR.—The term ‘Director’ means the

12 Director of the Office of Management and Budget.

13 (6) FORM.—The term ‘form’ means a document

14 produced by an agency—

15 (A) that is used by the agency to facilitate

16 interaction between the agency and persons;

17 (B) that is completed by a person by in18 serting information as required by the agency;

19 (C) that is submitted to an agency more

20 than 1,000 times per year; and

21 (D) that is not required to be completed in

22 the presence of a Federal official or at a par23 ticular location.

24 (7) RELIABLE AUTHORITY.—The term ‘reliable

25 authority’ means an entity licensed to serve as a no-
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1 tary that vouches to a trusted third party for the

2 identity of a person who seeks a certificate to be

3 issued on such person’s behalf.

4 (8) TRUSTED THIRD PARTY.—The term ‘trust5 ed third party’ means an entity (other than an agen6 cy) that issues a certificate.

7 SECTION 1. SHORT TITLE.

8 This Act may be cited as the ‘‘Government Paperwork

9 Elimination Act’’.

10 SEC. 2. STUDIES ON USE OF ELECTRONIC SIGNATURES TO

11 ENHANCE ELECTRONIC COMMERCE.

12 The Secretary shall conduct an ongoing study of the

13 enhancement of electronic commerce and the impact on in14 dividual privacy due to the use of electronic signatures pur15 suant to this Act, and shall report findings to the Commerce

16 Committee of the House and to the Commerce, Science, and

17 Transportation Committee of the Senate not later than 18

18 months after the date of enactment of this Act.

19 SEC. 3. ELECTRONIC AVAILABILITY OF FORMS.

20 (a) NEW FORMS, QUESTIONNAIRES, AND SURVEYS.—

21 The head of an agency or operating unit shall provide for

22 the availability to the affected public in electronic form for

23 downloading or printing through the Internet or other suit24 able medium of any agency form, questionnaire, or survey

25 created after the date of enactment of this Act that is to
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1 be submitted to the agency by more than 1,000 non-govern2 ment persons or entities per year, except where the head

3 of the agency or operating unit determines by a finding

4 that providing for such availability would be impracticable

5 or otherwise unreasonable.

6 (b) ALL FORMS, QUESTIONNAIRES, AND SURVEYS.—

7 As soon as practicable, but not later than 18 months after

8 the date of enactment of this Act, each Federal agency shall

9 make all of its forms, questionnaires, and surveys that are

10 expected to be submitted to such agency by more than 1,000

11 non-government persons or entities per year available to the

12 affected public for downloading or printing through the

13 Internet or other suitable electronic medium. This require14 ment shall not apply where the head of an agency or operat15 ing unit determines that providing such availability for

16 particular form, questionnaire or survey documents would

17 be impracticable or otherwise unreasonable.

18 (c) APPLICABILITY OF SECTION.—The requirements of

19 this section shall not apply to surveys that are both distrib20 uted and collected one-time only or that are provided di21 rectly to respondents by the agency.

22 (d) AVAILABILITY.—Forms subject to this section shall

23 be available for electronic submission (with an electronic

24 signature when necessary) under the provisions of section
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1 8, and shall be available for electronic storage by employers

2 as described in section 7.

3 (e) PAPER FORMS TO BE AVAILABLE.—Each agency

4 and operating unit shall continue to make forms, question5 naires, and surveys available in paper form.

6 SEC. 4. PAYMENTS.

7 In conjunction with the process required by section 8—

8 (1) where they deem such action appropriate and

9 practicable, and subject to standards or guidance of

10 the Department of the Treasury concerning Federal

11 payments or collections, agencies shall seek to develop

12 or otherwise provide means whereby persons submit13 ting documents electronically are accorded the option

14 of making any payments associated therewith by elec15 tronic means.

16 (2) payments associated with forms, applica17 tions, or similar documents submitted electronically,

18 other than amounts relating to additional costs asso19 ciated with the electronic submission such as charges

20 imposed by merchants in connection with credit card

21 transactions, shall be no greater than the payments

22 associated with the corresponding printed version of

23 such documents.
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1 SEC. 5. USE OF ELECTRONIC SIGNATURES BY FEDERAL

2 AGENCIES.

3 (a) AGENCY EMPLOYEES TO RECEIVE ELECTRONIC

4 SIGNATURES.—The head of each agency shall issue guide5 lines for determining how and which employees in each re6 spective agency shall be permitted to use electronic signa7 tures within the scope of their employment.

8 (b) AVAILABILITY OF ELECTRONIC NOTICE.—An agen9 cy may provide a person entitled to receive written notice

10 of a particular matter with the opportunity to receive elec11 tronic notice instead.

12 (c) PROCEDURES FOR ACCEPTANCE OF ELECTRONIC

13 SIGNATURES.—The Director, in consultation with the Sec14 retary, shall coordinate agency actions to comply with the

15 provisions of this Act and shall develop guidelines concern16 ing agency use and acceptance of electronic signatures, and

17 such use and acceptance shall be supported by the issuance

18 of such guidelines as may be necessary or appropriate by

19 the Secretary.

20 (1) The procedures shall be compatible with

21 standards and technology for electronic signatures as

22 may be generally used in commerce and industry and

23 by State governments, based upon consultation with

24 appropriate private sector and State government

25 standard setting bodies.
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1 (2) Such procedures shall not inappropriately

2 favor one industry or technology.

3 (3) Under the procedures referred to in sub4 section (a), an electronic signature shall be as reliable

5 as is appropriate for the purpose, and efforts shall be

6 made to keep the information submitted intact.

7 (4) Successful submission of an electronic form

8 shall be electronically acknowledged.

9 (5) In accordance with all other sections of the

10 Act, to the extent feasible and appropriate, and de11 scribed in a written finding, an agency, when it re12 ceives electronically 50,000 submittals of a particular

13 form, shall take all steps necessary to ensure that

14 multiple formats of electronic signatures are made

15 available for submitting such forms.

16 SEC. 6. ENFORCEABILITY AND LEGAL EFFECT OF ELEC17 TRONIC RECORDS.

18 Electronic records submitted or maintained in accord19 ance with agency procedures and guidelines established pur20 suant to the Act, or electronic signatures or other forms of

21 electronic authentication used in accordance with such pro22 cedures and guidelines, shall not be denied legal effect, va23 lidity or enforceability because they are in electronic form.
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1 SEC. 7. EMPLOYER ELECTRONIC STORAGE OF FORMS.

2 If an employer is required by any Federal law or regu3 lation to collect or store, or to file with a Federal agency

4 forms containing information pertaining to employees, such

5 employer may, after 18 months after enactment of this Act,

6 store such forms electronically unless the relevant agency

7 determines by regulation that storage of a particular form

8 in an electronic format is inconsistent with the efficient se9 cure or proper administration of an agency program. Such

10 forms shall also be accepted in electronic form by agencies

11 as provided by section 8.

12 SEC. 8. IMPLEMENTATION BY AGENCIES.

13 (a) IMPLEMENTATION.—Consistent with the Privacy

14 Protection Act of 1980 (42 U.S.C. 2000aa) and after con15 sultation with the Attorney General, and subject to applica16 ble laws and regulations pertaining to the Department of

17 the Treasury concerning Federal payments and collections

18 and the National Archives and Records Administration

19 concerning the proper maintenance and preservation of

20 agency records, Federal agencies shall, not later than 18

21 months after the enactment of this Act, establish and imple22 ment policies and procedures under which they will use and

23 authorize the use of electronic technologies in the transmit24 tal of forms, applications, and similar documents or

25 records, and where appropriate, for the creation and trans-
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1 mission of such documents or records and their storage for

2 their required retention period.

3 (b) ESTABLISHMENT OF A TIMELINE FOR IMPLEMEN4 TATION.—Within 18 months after the date of enactment of

5 this Act, Federal agencies shall establish timelines for the

6 implementation of the requirements of subsection (a).

7 (c) GENERAL ACCOUNTING OFFICE REPORT.—The

8 Comptroller General shall report to the Senate Committee

9 on Commerce, Science, and Transportation and the House

10 of Representatives Committee on Commerce 21 months after

11 the date of enactment of this Act on the proposed implemen12 tation policies and timelines described in subsections (a)

13 and (b).

14 (d) IMPLEMENTATION DEADLINE.—Except where an

15 agency makes a written finding that electronic filing of a

16 form is either technically infeasible, economically unreason17 able, or may compromise national security, all Federal

18 forms must be made available for electronic submission

19 within 60 months after the date of enactment of this Act.

20 SEC. 9. SENSE OF THE CONGRESS.

21 Because there is no meaningful difference between con22 tracts executed in the electronic world and contracts exe23 cuted in the analog world, it is the sense of the Congress

24 that such contracts should be treated similarly under Fed-
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1 eral law. It is further the sense of the congress that such

2 contracts should be treated similarly under State law.

3 SEC. 10. APPLICATION WITH OTHER LAWS.

4 Nothing in this this Act shall apply to the Department

5 of the Treasury or the Internal Revenue Service, to the ex6 tent that—

7 (1) it involves the administration of the internal

8 revenue laws; and

9 (2) it conflicts with any provision of the Internal

10 Revenue Service Restructuring and Reform Act of

11 1998 or the Internal Revenue Code of 1986.

12 SEC. 11. DEFINITIONS.

13 For purposes of this Act:

14 (1) SECRETARY.—The term ‘‘Secretary’’ means

15 the Secretary of Commerce.

16 (2) AGENCY.—The term ‘‘agency’’ means execu17 tive agency, as that term is defined in section 105 of

18 title 5, United States Code.

19 (3) ELECTRONIC SIGNATURE.—The term ‘‘elec20 tronic signature’’ means a method of signing an elec21 tronic message that—

22 (A) identifies a particular person as the

23 source of such electronic message; and
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1 (B) indicates such person’s approval of the

2 information contained in such electronic mes3 sage.

4 (4) DIRECTOR.—The term ‘‘Director’’ means the

5 Director of the Office of Management and Budget.

6 (5) FORM, QUESTIONNAIRE, OR SURVEY.—The

7 terms ‘‘form’’, ‘‘questionnaire’’, and ‘‘survey’’ include

8 documents produced by an agency to facilitate inter9 action between an agency and non-government per10 sons.