I
106TH CONGRESS
1ST SESSION
H. R. 1320
To regulate interstate commerce by electronic means by permitting and en-
couraging the continued expansion of electronic commerce through the
operation of free market forces, and other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 25, 1999
Ms. ESHOO introduced the following bill; which was referred to the Committee
on Commerce, and in addition to the Committee on Government Reform,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To regulate interstate commerce by electronic means by per-
mitting and encouraging the continued expansion of elec-
tronic commerce through the operation of free market
forces, and other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Millennium Digital
Commerce Act’’.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) The growth of electronic commerce and
electronic government transactions represent a pow-
erful force for economic growth, consumer choice,
improved civic participation and wealth creation.
(2) The promotion of growth in private sector
electronic commerce through Federal legislation is in
the national interest because that market is globally
important to the United States.
(3) A consistent legal foundation, across mul-
tiple jurisdictions, for electronic commerce will pro-
mote the growth of such transactions, and that such
a foundation should be based upon a simple, tech-
nology neutral, nonregulatory, and market-based ap-
proach.
(4) The nation and the world stand at the be-
ginning of a large scale transition to an information
society which will require innovative legal and policy
approaches, and therefore, States can serve the na-
tional interest by continuing their proven role as lab-
oratories of innovation for quickly evolving areas of
public policy, provided that States also adopt a con-
sistent, reasonable national baseline to eliminate ob-
solete barriers to electronic commerce such as undue
paper and pen requirements, and further, that any
such innovation should not unduly burden interjuris-
dictional commerce.
(5) To the extent State laws or regulations do
not currently provide a consistent, reasonable na-
tional baseline or in fact create an undue burden to
interstate commerce in the important burgeoning
area of electronic commerce, the national interest is
best served by Federal preemption to the extent nec-
essary to provide such consistent national baseline
and eliminate said burden, but that absent such lack
of a consistent, reasonable national baseline or such
undue burdens, the best legal system for electronic
commerce will result from continuing experimen-
tation by individual jurisdictions.
(6) With due regard to the fundamental need
for a consistent national baseline, each jurisdiction
that enacts such laws should have the right to deter-
mine the need for any exceptions to protect con-
sumers and maintain consistency with existing re-
lated bodies of law within a particular jurisdiction.
(7) Industry has developed several electronic
signature technologies for use in electronic trans-
actions, and the public policies of the United States
should serve to promote a dynamic marketplace
within which these technologies can compete. Con-
sistent with this Act, States should permit the use
and development of any authentication technologies
that are appropriate as practicable as between pri-
vate parties and in use with State agencies.
SEC. 3. PURPOSES.
The purposes of this Act are—
(1) to permit and encourage the continued ex-
pansion of electronic commerce through the oper-
ation of free market forces rather than proscriptive
governmental mandates and regulations;
(2) to promote public confidence in the validity,
integrity and reliability of electronic commerce and
online government under Federal law;
(3) to facilitate and promote electronic com-
merce by clarifying the legal status of electronic
records and electronic signatures in the context of
writing and signing requirements imposed by law;
(4) to facilitate the ability of private parties en-
gaged in interstate transactions to agree among
themselves on the terms and conditions on which
they use and accept electronic signatures and elec-
tronic records; and
(5) to promote the development of a consistent
national legal infrastructure necessary to support of
electronic commerce at the Federal and State levels
within existing areas of jurisdiction.
SEC. 4. DEFINITIONS.
In this Act:
(1) 
ELECTRONIC.—The 
term 
‘‘electronic’’
means of or relating to technology having electrical,
digital, magnetic, wireless, optical, electromagnetic,
or similar capabilities.
(2) ELECTRONIC
RECORD.—The term ‘‘elec-
tronic record’’ means a record created, stored, gen-
erated, received, or communicated by electronic
means.
(3) ELECTRONIC SIGNATURE.—The term ‘‘elec-
tronic signature’’ means a signature in electronic
form, attached to or logically associated with an
electronic record.
(4) GOVERNMENTAL AGENCY.—The term ‘‘gov-
ernmental agency’’ means an executive, legislative,
or judicial agency, department, board, commission,
authority, institution, or instrumentality of the Fed-
eral government or of a State or of any county, mu-
nicipality, or other political subdivision of a State.
(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) SIGN.—The term ‘‘sign’’ means to execute
or adopt a signature.
(7) SIGNATURE.—The term ‘‘signature’’ means
any symbol, sound, or process executed or adopted
by a person or entity, with intent to authenticate or
accept a record.
(8) TRANSACTION.—The term ‘‘transaction’’
means an action or set of actions occurring between
2 or more persons relating to the conduct of com-
merce.
SEC. 5. PRINCIPLES GOVERNING THE USE OF ELECTRONIC
SIGNATURES 
IN 
INTERNATIONAL 
TRANS-
ACTIONS.
(a) IN GENERAL.—To the extent practicable, the
Federal Government shall observe the following principles
in an international context to enable commercial electronic
transaction:
(1) 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 Inter-
national Trade Law (UNCITRAL).
(2) Permit parties to a transaction to determine
the appropriate authentication technologies and im-
plementation models for their transactions, with as-
surance that those technologies and implementation
models will be recognized and enforced.
(3) Permit parties to a transaction to have the
opportunity to prove in court or other proceedings
that their authentication approaches and their trans-
actions are valid.
(4) Take a nondiscriminatory approach to elec-
tronic signatures and authentication methods from
other jurisdictions.
SEC. 6. INTERSTATE CONTRACT CERTAINTY.
(a) INTERSTATE COMMERCIAL CONTRACTS.—A con-
tract relating to an interstate transaction shall not be de-
nied legal effect solely because an electronic signature or
electronic record was used in its formation.
(b) METHODS.—Notwithstanding any rule of law
that specifies one or more acceptable or required tech-
nologies or business models, including legal or other proce-
dures, necessary to create, use, receive, validate, or invali-
date electronic signatures or electronic records, the parties
to an interstate transaction may establish by contract,
electronically or otherwise, such technologies or business
models, including legal or other procedures, to create, use,
receive, validate, or invalidate electronic signatures and
electronic records.
(c) NOT PREEMPT STATE LAW.—Nothing in this sec-
tion shall be construed to preempt the law of a State that
enacts legislation governing electronic transactions that is
consistent with subsections (a) and (b). A State that en-
acts, or has in effect, uniform electronic transactions legis-
lation substantially as reported to State legislatures by the
National Conference of Commissioners on Uniform State
Law shall be deemed to have satisfied this criterion, pro-
vided such legislation as enacted is not inconsistent with
subsections (a) and (b).
(d) INTENT.—The intent of a person to execute or
adopt an electronic signature shall be determined from the
context and surrounding circumstances, which may in-
clude accepted commercial practices.
SEC. 7. STUDY OF LEGAL AND REGULATORY BARRIERS TO
ELECTRONIC COMMERCE.
(a) BARRIERS.—Each Federal agency shall, not later
than 6 months after the date of enactment of this Act,
provide a report to the Director of the Office of Manage-
ment and Budget and the Secretary of Commerce identi-
fying any provision of law administered by such agency,
or any regulations issued by such agency and in effect on
the date of enactment of this Act, that may impose a bar-
rier to electronic transactions, or otherwise to the conduct
of commerce online or be electronic means. Such barriers
include, but are not limited to, barriers imposed by a law
or regulation directly or indirectly requiring that signa-
tures, or records of transactions, be accomplished or re-
tained in other than electronic form. In its report, each
agency shall identify the barriers among those identified
whose removal would require legislative action, and shall
indicate agency plans to undertake regulatory action to
remove such barriers among those identified as are caused
by regulations issued by the agency.
(b) REPORT TO CONGRESS.—The Secretary of Com-
merce, in consultation with the Director of the Office of
Management and Budget, shall, within 18 months after
the date of enactment of this Act, and after the consulta-
tion required by subsection (c) of this section, report to
the Congress concerning—
(1) legislation needed to remove any existing
barriers to electronic transactions or otherwise to
the conduct of commerce online or by electronic
means; and
(2) actions being taken by the Executive
Branch and individual Federal agencies to remove
such barriers as are caused by agency regulations or
policies.
(c) CONSULTATION.—In preparing the report re-
quired by this section, the Secretary of Commerce shall
consult with the General Services Administration, the Na-
tional Archives and Records Administration, and the At-
torney General concerning matters involving the authen-
ticity of records, their storage and retention, and their
usability for law enforcement purposes.
(d) INCLUDE
FINDINGS
IF
NO
RECOMMENDA-
TIONS.—If the report required by this section omits rec-
ommendations for actions needed to fully remove identi-
fied barriers to electronic transactions or to online or elec-
tronic commerce, it shall include a finding or findings, in-
cluding substantial reasons therefor, that such removal is
impracticable or would be inconsistent with the implemen-
tation or enforcement of applicable laws.
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