IIB
106TH CONGRESS
1ST SESSION
H. R. 1714
IN THE SENATE OF THE UNITED STATES
NOVEMBER 10, 1999
Received
NOVEMBER 19, 1999
Read twice and referred to the Committee on Commerce, Science, and
Transportation
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 Representa-
tives of the United States of America in Congress assembled,
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quirements regarding the use and acceptance of
electronic records and electronic signatures ac-
ceptable to such parties;
(B) the legal effect, validity, or enforce-
ability of such contract, agreement, or record
shall not be denied because of the type or meth-
od of electronic record or electronic signature
selected by the parties in establishing such pro-
cedures or requirements; and
(C) nothing in this section requires any
party to use or accept electronic records or elec-
tronic signatures.
(2) CONSENT TO ELECTRONIC RECORDS.—Not-
withstanding subsection (a) and paragraph (1) of
this subsection—
(A) if a statute, regulation, or other rule of
law requires that a record be provided or made
available to a consumer in writing, that require-
ment shall be satisfied by an electronic record
if—
(i) the consumer has affirmatively
consented, by means of a consent that is
conspicuous and visually separate from
other terms, to the provision or availability
(whichever is required) of such record (or
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identified groups of records that include
such record) as an electronic record, and
has not withdrawn such consent;
(ii) prior to consenting, the consumer
is provided with a statement of the hard-
ware and software requirements for access
to and retention of electronic records; and
(iii) the consumer affirmatively ac-
knowledges, by means of an acknowledge-
ment that is conspicuous and visually sepa-
rate from other terms, that—
(I) the consumer has an obliga-
tion to notify the provider of elec-
tronic records of any change in the
consumer’s electronic mail address or
other location to which the electronic
records may be provided; and
(II) if the consumer withdraws
consent, the consumer has the obliga-
tion to notify the provider to notify
the provider of electronic records of
the electronic mail address or other
location to which the records may be
provided; and
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(B) the record is capable of review, reten-
tion, and printing by the recipient if accessed
using the hardware and software specified in
the statement under subparagraph (A)(ii) at
the time of the consumer’s consent; and
(C) if such statute, regulation, or other
rule of law requires that a record be retained,
that requirement shall be satisfied if such
record complies with the requirements of sub-
paragraphs (A) and (B) of subsection (c)(1).
(c) RETENTION OF CONTRACTS, AGREEMENTS, AND
RECORDS.—
(1) ACCURACY AND ACCESSIBILITY.—If a stat-
ute, regulation, or other rule of law requires that a
contract, agreement, or record be in writing or be
retained, that requirement is met by retaining an
electronic record of the information in the contract,
agreement, or record that—
(A) accurately reflects the information set
forth in the contract, agreement, or record after
it was first generated in its final form as an
electronic record; and
(B) remains accessible, for the period re-
quired by such statute, regulation, or rule of
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law, for later reference, transmission, and print-
ing.
(2) EXCEPTION.—A requirement to retain a
contract, agreement, or record in accordance with
paragraph (1) does not apply to any information
whose sole purpose is to enable the contract, agree-
ment, or record to be sent, communicated, or re-
ceived.
(3) ORIGINALS.—If a statute, regulation, or
other rule of law requires a contract, agreement, or
record to be provided, available, or retained in its
original form, or provides consequences if the con-
tract, agreement, or record is not provided, avail-
able, 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 re-
quirement is satisfied by retention of an electronic
record of all the information on the front and back
of the check in accordance with paragraph (1).
(d) 
ABILITY
TO
CONTEST
SIGNATURES
AND
CHARGES.—Nothing in this section shall be construed to
limit or otherwise affect the rights of any person to assert
that an electronic signature is a forgery, is used without
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authority, or otherwise is invalid for reasons that would
invalidate the effect of a signature in written form. The
use or acceptance of an electronic record or electronic sig-
nature by a consumer shall not constitute a waiver of any
substantive protections afforded consumers under the
Consumer Credit Protection Act.
(e) SCOPE.—This Act is intended to clarify the legal
status of electronic records and electronic signatures in
the context of writing and signing requirements imposed
by law. Nothing in this Act affects the content or timing
of any disclosure required to be provided to any consumer
under any statute, regulation, or other rule of law.
SEC. 102. AUTHORITY TO ALTER OR SUPERSEDE GENERAL
RULE.
(a) PROCEDURE TO ALTER OR SUPERSEDE.—Except
as provided in subsection (b), a State statute, regulation,
or other rule of law may modify, limit, or supersede the
provisions of section 101 if such statute, regulation, or
rule of law—
(1)(A) constitutes an enactment or adoption of
the Uniform Electronic Transactions Act as reported
to the State legislatures by the National Conference
of Commissioners on Uniform State Laws; or
(B) specifies the alternative procedures or re-
quirements for the use or acceptance (or both) of
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electronic records or electronic signatures to estab-
lish the legal effect, validity, or enforceability of con-
tracts, agreements, or records; and
(2) if enacted or adopted after the date of the
enactment of this Act, makes specific reference to
this Act.
(b) LIMITATIONS
ON ALTERATION
OR SUPERSES-
SION.—A State statute, regulation, or other rule of law
(including an insurance statute, regulation, or other rule
of law), regardless of its date of the enactment or adop-
tion, that modifies, limits, or supersedes section 101 shall
not be effective to the extent that such statute, regulation,
or rule—
(1) discriminates in favor of or against a spe-
cific technology, process, or technique of creating,
storing, generating, receiving, communicating, or au-
thenticating electronic records or electronic signa-
tures;
(2) discriminates in favor of or against a spe-
cific type or size of entity engaged in the business
of facilitating the use of electronic records or elec-
tronic signatures;
(3) is based on procedures or requirements that
are not specific or that are not publicly available; or
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(4) is otherwise inconsistent with the provisions
of this title.
(c) EXCEPTION.—Notwithstanding subsection (b), a
State may, by statute, regulation, or rule of law enacted
or adopted after the date of the enactment of this Act,
require specific notices to be provided or made available
in writing if such notices are necessary for the protection
of the public health or safety of consumers. A consumer
may not, pursuant to section 101(b)(2), consent to the
provision or availability of such notice solely as an elec-
tronic record.
SEC. 103. SPECIFIC EXCLUSIONS.
(a) EXCEPTED REQUIREMENTS.—The provisions of
section 101 shall not apply to a contract, agreement, or
record to the extent it is governed by—
(1) a statute, regulation, or other rule of law
governing the creation and execution of wills, codi-
cils, or testamentary trusts;
(2) a statute, regulation, or other rule of law
governing adoption, divorce, or other matters of
family law;
(3) the Uniform Commercial Code, as in effect
in any State, other than sections 1-107 and 1-206
and Articles 2 and 2A;
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(4) any requirement by a Federal regulatory
agency or self-regulatory organization that records
be filed or maintained in a specified standard or
standards (including a specified format or formats),
except that nothing in this paragraph relieves any
Federal regulatory agency of its obligations under
the Government Paperwork Elimination Act (title
XVII of Public Law 105–277);
(5) the Uniform Anatomical Gift Act; or
(6) the Uniform Health-Care Decisions Act.
(b) ADDITIONAL EXCEPTIONS.—The provisions of
section 101 shall not apply to—
(1) any contract, agreement, or record entered
into between a party and a State agency if the State
agency is not acting as a market participant in or
affecting interstate commerce;
(2) court orders or notices, or official court doc-
uments (including briefs, pleadings, and other
writings) required to be executed in connection with
court proceedings; or
(3) any notice concerning—
(A) the cancellation or termination of util-
ity services (including water, heat, and power);
(B) default, acceleration, repossession,
foreclosure, or eviction, or the right to cure,
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under a credit agreement secured by, or a rent-
al agreement for, a primary residence of an in-
dividual; or
(C) the cancellation or termination of
health insurance or benefits or life insurance
benefits (excluding annuities).
SEC. 104. STUDY.
(a) FOLLOWUP STUDY.—Within 5 years after the
date of the enactment of this Act, the Secretary of Com-
merce, acting through the Assistant Secretary for Commu-
nications and Information, shall conduct an inquiry re-
garding any State statutes, regulations, or other rules of
law enacted or adopted after such date of the enactment
pursuant to section 102(a), and the extent to which such
statutes, regulations, and rules comply with section
102(b).
(b) REPORT.—The Secretary shall submit a report to
the Congress regarding the results of such inquiry by the
conclusion of such 5-year period.
(c) ADDITIONAL STUDY OF DELIVERY.—Within 18
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
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private express mail services. The Secretary shall submit
a report to the Congress regarding the results of such in-
quiry by the conclusion of such 18-month period.
SEC. 105. DEFINITIONS.
For purposes of this title:
(1) ELECTRONIC
RECORD.—The term ‘‘elec-
tronic record’’ means a writing, document, or other
record created, stored, generated, received, or com-
municated by electronic means.
(2) ELECTRONIC SIGNATURE.—The term ‘‘elec-
tronic signature’’ means information or data in elec-
tronic form, attached to or logically associated with
an electronic record, and executed or adopted by a
person or an electronic agent of a person, with the
intent to sign a contract, agreement, or record.
(3) 
ELECTRONIC.—The 
term 
‘‘electronic’’
means of or relating to technology having electrical,
digital, magnetic, optical, electromagnetic, or similar
capabilities regardless of medium.
(4) ELECTRONIC AGENT.—The term ‘‘electronic
agent’’ means a computer program or an electronic
or other automated means used independently to ini-
tiate an action or respond to electronic records in
whole or in part without review by an individual at
the time of the action or response.
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(5) RECORD.—The term ‘‘record’’ means infor-
mation that is inscribed on a tangible medium or
that is stored in an electronic or other medium and
is retrievable in perceivable form.
(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, that is authorized by Federal
law to impose requirements by rule, regulation,
order, or other legal instrument.
(7) SELF-REGULATORY
ORGANIZATION.—The
term ‘‘self-regulatory organization’’ means an orga-
nization 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 ap-
plicable to its members that are enforced by such or-
ganization or entity, by a Federal regulatory agency,
or by another self-regulatory organization.
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TITLE 
II—DEVELOPMENT 
AND
ADOPTION OF ELECTRONIC
SIGNATURE PRODUCTS AND
SERVICES
SEC. 201. TREATMENT OF ELECTRONIC SIGNATURES IN
INTERSTATE AND FOREIGN COMMERCE.
(a) INQUIRY REGARDING IMPEDIMENTS
TO COM-
MERCE.—
(1) INQUIRIES
REQUIRED.—Within 180 days
after the date of the enactment of this Act, and bi-
ennially thereafter, the Secretary of Commerce, act-
ing through the Assistant Secretary for Communica-
tions and Information, shall complete an inquiry
to—
(A) identify any domestic and foreign im-
pediments to commerce in electronic signature
products and services and the manners in which
and extent to which such impediments inhibit
the development of interstate and foreign com-
merce;
(B) identify constraints imposed by foreign
nations or international organizations that con-
stitute barriers to providers of electronic signa-
ture products or services; and
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(C) identify the degree to which other na-
tions and international organizations are com-
plying with the principles in subsection (b)(2).
(2) SUBMISSION.—The Secretary shall submit a
report to the Congress regarding the results of each
such inquiry within 90 days after the conclusion of
such inquiry. Such report shall include a description
of the actions taken by the Secretary pursuant to
subsection (b) of this section.
(b) PROMOTION OF ELECTRONIC SIGNATURES.—
(1) REQUIRED
ACTIONS.—The Secretary of
Commerce, acting through the Assistant Secretary
for Communications and Information, shall promote
the acceptance and use, on an international basis, of
electronic signatures in accordance with the prin-
ciples specified in paragraph (2) and in a manner
consistent with section 101 of this Act. The Sec-
retary of Commerce shall take all actions necessary
in a manner consistent with such principles to elimi-
nate or reduce, to the maximum extent possible, the
impediments to commerce in electronic signatures,
including those identified in the inquiries under sub-
section (a) for the purpose of facilitating the devel-
opment of interstate and foreign commerce.
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(2) PRINCIPLES.—The principles specified in
this paragraph are the following:
(A) Free markets and self-regulation, rath-
er than Government standard-setting or rules,
should govern the development and use of elec-
tronic records and electronic signatures.
(B) 
Neutrality 
and 
nondiscrimination
should be observed among providers of and
technologies for electronic records and elec-
tronic signatures.
(C) Parties to a transaction should be per-
mitted to establish requirements regarding the
use of electronic records and electronic signa-
tures acceptable to such parties.
(D) Parties to a transaction—
(i) should be permitted to determine
the appropriate authentication technologies
and implementation models for their trans-
actions, with assurance that those tech-
nologies and implementation models will be
recognized and enforced; and
(ii) should have the opportunity to
prove in court or other proceedings that
their authentication approaches and their
transactions are valid.
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(E) Electronic records and electronic sig-
natures in a form acceptable to the parties
should not be denied legal effect, validity, or en-
forceability on the ground that they are not in
writing.
(F) De jure or de facto imposition of
standards on private industry through foreign
adoption of regulations or policies with respect
to electronic records and electronic signatures
should be avoided.
(G) Paper-based obstacles to electronic
transactions should be removed.
(c) CONSULTATION.—In conducting the activities re-
quired by this section, the Secretary shall consult with
users and providers of electronic signature products and
services and other interested persons.
(d) PRIVACY.—Nothing in this section shall be con-
strued to require the Secretary or the Assistant Secretary
to take any action that would adversely affect the privacy
of consumers.
(e) DEFINITIONS.—As used in this section, the terms
‘‘electronic record’’ and ‘‘electronic signature’’ have the
meanings provided in section 104 of the Electronic Signa-
tures in Global and National Commerce Act.
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TITLE III—USE OF ELECTRONIC
RECORDS AND SIGNATURES
UNDER FEDERAL SECURITIES
LAW
SEC. 301. GENERAL VALIDITY OF ELECTRONIC RECORDS
AND SIGNATURES.
Section 3 of the Securities Exchange Act of 1934 (15
U.S.C. 78c) is amended by adding at the end the following
new subsection:
‘‘(h) REFERENCES TO WRITTEN RECORDS AND SIG-
NATURES.—
‘‘(1) GENERAL
VALIDITY
OF
ELECTRONIC
RECORDS
AND
SIGNATURES.—Except as otherwise
provided in this subsection—
‘‘(A) if a contract, agreement, or record
(as defined in subsection (a)(37)) is required by
the securities laws or any rule or regulation
thereunder (including a rule or regulation of a
self-regulatory organization), and is required by
Federal or State statute, regulation, or other
rule of law to be in writing, the legal effect, va-
lidity, or enforceability of such contract, agree-
ment, or record shall not be denied on the
ground that the contract, agreement, or record
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is not in writing if the contract, agreement, or
record is an electronic record;
‘‘(B) if a contract, agreement, or record is
required by the securities laws or any rule or
regulation thereunder (including a rule or regu-
lation of a self-regulatory organization), and is
required by Federal or State statute, regula-
tion, or other rule of law to be signed, the legal
effect, validity, or enforceability of such con-
tract, agreement, or record shall not be denied
on the ground that such contract, agreement, or
record is not signed or is not affirmed by a sig-
nature if the contract, agreement, or record is
signed or affirmed by an electronic signature;
and
‘‘(C) if a broker, dealer, transfer agent, in-
vestment adviser, or investment company enters
into a contract or agreement with, or accepts a
record from, a customer or other counterparty,
such broker, dealer, transfer agent, investment
adviser, or investment company may accept and
rely upon an electronic signature on such con-
tract, agreement, or record, and such electronic
signature shall not be denied legal effect, valid-
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ity, or enforceability because it is an electronic
signature.
‘‘(2) IMPLEMENTATION.—
‘‘(A) 
REGULATIONS.—The 
Commission
may prescribe such regulations as may be nec-
essary to carry out this subsection consistent
with the public interest and the protection of
investors.
‘‘(B) NONDISCRIMINATION.—The regula-
tions prescribed by the Commission under sub-
paragraph (A) shall not—
‘‘(i) discriminate in favor of or against
a specific technology, method, or technique
of creating, storing, generating, receiving,
communicating, or authenticating elec-
tronic records or electronic signatures; or
‘‘(ii) discriminate in favor of or
against a specific type or size of entity en-
gaged in the business of facilitating the
use of electronic records or electronic sig-
natures.
‘‘(3) EXCEPTIONS.—Notwithstanding any other
provision of this subsection—
‘‘(A) the Commission, an appropriate regu-
latory agency, or a self-regulatory organization
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may require that records be filed or maintained
in a specified standard or standards (including
a specified format or formats) if the records are
required to be submitted to the Commission, an
appropriate regulatory agency, or a self-regu-
latory organization, respectively, or are required
by the Commission, an appropriate regulatory
agency, or a self-regulatory organization to be
retained; and
‘‘(B) the Commission may require that
contracts, agreements, or records relating to
purchases and sales, or establishing accounts
for conducting purchases and sales, of penny
stocks be manually signed, and may require
such manual signatures with respect to trans-
actions in similar securities if the Commission
determines that such securities are susceptible
to fraud and that such fraud would be deterred
or prevented by requiring manual signatures.
‘‘(4) RELATION TO OTHER LAW.—The provi-
sions of this subsection apply in lieu of the provi-
sions of title I of the Electronic Signatures in Global
and National Commerce Act to a contract, agree-
ment, or record (as defined in subsection (a)(37))
that is required by the securities laws.
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‘‘(5) SAVINGS PROVISION.—Nothing in this sub-
section applies to any rule or regulation under the
securities laws (including a rule or regulation of a
self-regulatory organization) that is in effect on the
date of the enactment of the Electronic Signatures
in Global and National Commerce Act and that re-
quires a contract, agreement, or record to be in writ-
ing, to be submitted or retained in original form, or
to be in a specified standard or standards (including
a specified format or formats).
‘‘(6) DEFINITIONS.—As used in this subsection:
‘‘(A) ELECTRONIC
RECORD.—The term
‘electronic record’ means a writing, document,
or other record created, stored, generated, re-
ceived, or communicated by electronic means.
‘‘(B) ELECTRONIC SIGNATURE.—The term
‘‘electronic signature’’ means information or
data in electronic form, attached to or logically
associated with an electronic record, and exe-
cuted or adopted by a person or an electronic
agent of a person, with the intent to sign a con-
tract, agreement, or record.
‘‘(C) ELECTRONIC.—The term ‘electronic’
means of or relating to technology having elec-
trical, 
digital, 
magnetic, 
optical, 
electro-
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magnetic, or similar capabilities regardless of
medium.’’.
Passed the House of Representatives November 9,
1999.
Attest:
JEFF TRANDAHL,
Clerk.