Coble Amendment in the Nature of a Substitute to HR 1714 (E-SIGN Act).
Re: providing for the acceptance of electronic signatures.
Date: October 7, 1999.
This amendment was approved by unanimous voice vote, and then the bill as amended was reported by a unanimous voice vote.

Editor's Notes:
• The House Subcommittee on Courts and Intellectual Property provided Tech Law Journal with a paper copy of this amendment.
• Tech Law Journal then scanned and converted into HTML. Some features were lost in the conversion, including double spacing, and line numbering.
• Copyright Tech Law Journal. All rights reserved.

AMENDMENT IN THE NATURE OF A SUBSTITUTE
TO H.R. 1714
OFFERED BY MR. COBLE

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE.

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

TITLE I---VALIDITY OF ELECTRONIC RECORDS AND SIGNATURES FOR COMMERCE

SEC. 101. DEFINITIONS.

In this Act:

(1) ELECTRONIC.---The term "electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(2) ELECTRONIC AGENT.---The term "electronic agent" means a computer program or an electronic or other automated means used to initiate an action or respond to electronic records or performances in whole or in part without review by an individual at the time of the action or response.

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(3) ELECTRONIC RECORD.---The term "electronic record" means a record created, generated, sent, communicated, received, or stored by electronic means.

(4) ELECTRONIC SIGNATURE.---The term "electronic signature" means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.

(5) GOVERNMENTAL AGENCY.---The term "governmental agency" means an executive, legislative, or judicial agency, department, board, commission, authority, institution, or instrumentality of the Federal Government or of a State or of any county, municipality, or other political subdivision of a State.

(6) 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.

(7) TRANSACTION.---The term "transaction" means an action or set of actions relating to the conduct of commerce between 2 or more persons, neither of which is the United States Government, a State, or an agency, department, board, commission, [begin page 3] authority, institution, or instrumentality of the United States Government or of a State.

(8) UNIFORM ELECTRONIC TRANSACTIONS ACT.---The term "Uniform Electronic Transactions Act" means the Uniform Electronic Transactions Act as provided to State legislatures by the National Conference of Commissioners on Uniform State Laws and as enacted into law by the State at issue.

SEC. 102. PRINCIPLES GOVERNING THE USE OF ELECTRONIC SIGNATURES IN INTERNATIONAL TRANSACTIONS.

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 International Trade Law (UNCITRAL).

(2) 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.

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(3) 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.

(4) Take a non-discriminatory approach to electronic signatures and authentication methods from other jurisdictions.

SEC. 103. INTERSTATE CONTRACT CERTAINTY.

(a) AGREEMENTS AND RECORDS.---The following rules apply to any commercial transaction affecting interstate commerce:

(1) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.

(2) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.

(3) If a law requires a record to be in writing, or provides consequences if it is not, an electronic record satisfies the law.

(4) If a law requires a signature, or provides consequences in the absence of a signature, the law is satisfied with respect to an electronic record if the electronic record includes an electronic signature.

[begin page 5]

(5) If a law requires that certain records be retained, that requirement is met by retaining an electronic record of the information in the record which---

(A) accurately reflects the information set forth in the record after it was first generated in its final form as an electronic record or otherwise; and

(B) remains accessible for later reference.

(6) A requirement to retain records in accordance with paragraph (5) does not apply to any information whose sole purpose is to enable the record to be sent, communicated, or received.

(7) A person satisfies paragraph (5) by using the services of any other person if the requirements of paragraph (5) are met.

(8) If a law requires a record to be presented or retained in its original form, or provides consequences if the record is not presented or retained in its original form, that law is satisfied by an electronic record retained in accordance with paragraph (5).

(9) If a law requires 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 (5).

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(10) A record retained as an electronic record in accordance with paragraph (5) satisfies a law requiring a person to retain records for evidentiary, audit, or like purposes, unless a law enacted after the effective date of this subsection specifically prohibits the use of an electronic record for a specified purpose.

(11) This subsection does not preclude a governmental agency of the United States or any State from specifying additional requirements for the retention of records, written or electronic, subject to the agency's jurisdiction.

(b) TERMS AND CONDITIONS OF AGREEMENTS. The parties to a contract may agree on or adopt the terms and conditions on which they will use and accept electronic signatures and electronic records, including the methods therefor, in commercial transactions affecting interstate commerce. Nothing in this subsection requires that any party enter into such a contract.

(c) ELECTRONIC AGENTS.---A contract relating to a commercial transaction affecting interstate commerce may not be denied legal effect solely because its formation involved---

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(1) the interaction of electronic agents of the parties; or

(2) the interaction of an electronic agent of a party and an individual who acts on that individual's own behalf or for another person.

(d) APPLICATION IN UETA STATES.---This section does not preempt

(1) the Uniform Electronic Transactions Act as in effect in a State, so long as the Uniform Electronic Transactions Act as in effect in such State is not inconsistent, in any significant manner, with the provisions of this section; or

(2) any law of a State, other than the Uniform Electronic Transactions Act, including an insurance statute, regulation, or rule of law, that relates to electronic signatures or electronic records and that is not inconsistent, in any significant manner, with the provisions of this section.

(e) ADMISSIBILITY OF EVIDENCE.---In a legal proceeding, evidence of an electronic record or electronic signature may not be excluded because it is an electronic record or electronic signature or it is not an original or is not in its original form.

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(f) SPECIFIC EXCLUSIONS.---The provisions of this section shall not apply to a statute, regulation, or other rule of law governing any of the following:

(1) Private medical records.

(2) The creation or execution of wills, codicils, or testamentary trusts.

(3) Divorce, marriage, adoption, or other matters of family law.

(4) Court orders or notices, or documents used in court proceedings.

(5) Titles to property.

(6) Landlord-tenant relationships.

(7) The Uniform Anatomical Gift Act.

(8) Premarital agreements.

(9) The Uniform Health-Care Decisions Act.

SEC. 104. 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 Management and Budget and the Secretary of Commerce identifying 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 barrier to electronic transactions, or otherwise to the conduct [begin page 9] 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 signatures, or records of transactions, be accomplished or retained 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 Commerce, in consultation with the Director of the Office of Management and Budget, shall, within IS months after the date of enactment of this Act, and after the consultation required by subsection (c) of this section, report to the Congress concerning

(1) legislation needed to remove 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 required by this section, the Secretary of Commerce shall [begin page 10] consult with the General Services Administration, the National Archives and Records Administration, and the Attorney General concerning matters involving the authenticity of records, their storage and retention, and their usability for law enforcement purposes.

(d) INCLUDE FINDINGS IF NO RECOMMENDATIONS.---If the report required by this section omits recommendations for actions needed to fully remove identified barriers to electronic transactions or to online or electronic commerce, it shall include a finding or findings, including substantial reasons therefor, that such removal is impracticable or would be inconsistent with the implementation or enforcement of applicable laws.

TITLE II---USE OF ELECTRONIC RECORDS AND SIGNATURES UNDER FEDERAL SECURITIES LAW

SEC. 201. REQUIREMENTS RELATING TO WRI17EN DOCUMENTS 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:

"(h) REQUIREMENTS RELATING TO WRITTEN DOCUMENTS AND SIGNATURES.---

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"(1) USE OF ELECTRONIC RECORDS AND SIGNATURES.---Notwithstanding any State statute, regulation, or rule of law, whenever in the securities laws, or in the rules or regulations thereunder (including the rules of any self-regulatory organization)

"(A) a contract, agreement, or record (as defined in subsection (a)(37)) is required to be in writing, or is required to be authenticated by means of an instrument in writing, the legal effect of such contract, agreement, or record shall not be denied on the ground that the instrument is not in writing if the instrument is an electronic record; and

"(B) a contract, agreement, or record is required to be signed, the legal effect of such contract, agreement, or record shall not be denied on the ground that contract, agreement, or record is not signed or is not affirmed by a signature if the contract, agreement, or record is signed or affirmed by an electronic signature.

"(2) AUTHORITY OF COMMISSION.---Notwithstanding any State statute, regulation, or rule of law, the Commission may, consistent with the public interest and the protection of investors, prescribe [begin page 12] regulations to carry out this subsection, but such regulations shall not---

"(A) discriminate in favor of or against a specific technology, method, or technique of creating, storing, generating, receiving, communicating, or authenticating electronic records or electronic signatures; or

"(B) discriminate in favor of or against a specific type of size of entity engage in the business of facilitating the use of electronic records or electronic signatures.

"(3) DEFINITIONS.---The terms 'electronic record' and 'electronic signature' have the meanings provided such terms by section 101 of the Electronic Signatures In Global Commerce and National Commerce Act.".