HR 1714 IH.
Electronic Signatures in Global and National Commerce Act.
Date introduced: May 6, 1999.
Sponsor: Rep. Tom Bliley (R-VA).
Source: Library of Congress.

To facilitate the use of electronic records and signatures in interstate or foreign commerce.

IN THE HOUSE OF REPRESENTATIVES

May 6, 1999

Mr. BLILEY (for himself, Mr. DAVIS of Virginia, Mr. TAUZIN, Mr. OXLEY, Mr. TOWNS, and Mr. FOSSELLA) introduced the following bill; which was referred to the Committee on Commerce

A BILL

To facilitate the use of electronic records and signatures in interstate or foreign commerce.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

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. GENERAL RULE OF VALIDITY.

(a) GENERAL RULE- With respect to any contract or agreement entered into in or affecting interstate or foreign commerce--

(1) no statute, regulation, or other rule of law shall deny the legal effect of such contract or agreement on the ground that the instrument is not in writing if the instrument is an electronic record; and

(2) no statute, regulation, or other rule of law shall deny the legal effect of such contract or agreement on the ground that the contract or agreement is not signed or is not affirmed by a signature if the contract or agreement is signed or affirmed by an electronic signature.

(b) AUTONOMY OF PARTIES IN COMMERCE- With respect to any contract or agreement entered into in or affecting interstate or foreign commerce, the parties to such contract or agreement may establish reasonable requirements regarding the types of electronic records and electronic signatures acceptable to such parties.

SEC. 102. AUTHORITY TO ALTER OR SUPERSEDE GENERAL RULE.

(a) IN GENERAL- Except as provided in subsection (b), a Federal or State statute, regulation, or other rule of law enacted or adopted after the date of enactment of this Act may modify, limit, or supersede the provisions of section 101 if--

(1) such statute, regulation, or rule makes specific reference to the provisions of section 101;

(2) specifies the alternative procedures or requirements for the use of electronic records or electronic signatures to establish the legal validity of contracts or agreements; and

(3) in the case of a State statute, regulation, or other rule of law, is enacted or adopted within 2 years after the date of enactment of this Act.

(b) EFFECT ON OTHER LAWS- A State statute, regulation, or other rule of law 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 specific technology, method, or technique of creating, storing, generating, receiving, communicating, or authenticating electronic records or electronic signatures;

(2) discriminates in favor of or against a specific type or size of entity engaged in the business of facilitating the use of electronic records or electronic signatures;

(3) is not based on specific and publicly available criteria; or

(4) is otherwise inconsistent with the provisions of section 101.

(c) ACTIONS TO ENJOIN- Whenever it shall appear to the Secretary of Commerce that a State has enacted or adopted a statute, regulation, or other law that is prohibited by subsection (b), the Secretary may bring an action to enjoin the enforcement of such statute, regulation, or rule, and upon a proper showing a permanent or temporary injunction or restraining order shall be granted without bond.

SEC. 103. SPECIFIC EXCLUSIONS.

The provisions of section 101 shall not apply to--

(1) a statute, regulation, or other rule of law governing the creation and execution of wills, codicils, or testamentary trusts; or

(2) a statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law.

SEC. 104. DEFINITIONS.

For purposes of this title:

(1) ELECTRONIC RECORD- The term `electronic record' means a writing, document, or other record created, stored, generated, received, or communicated by electronic means.

(2) ELECTRONIC SIGNATURE- The term `electronic signature' means a signature in electronic form, attached to or logically associated with an electronic record, that--

(A) is intended by the parties to signify agreement to a contract or agreement;

(B) is capable of verifying the identity of the person using the signature; and

(C) is linked to the electronic record in a manner that prevents alteration of the record after signature.

(3) ELECTRONIC- The term `electronic' means of or relating to technology having electrical, digital, magnetic, optical, electromagnetic, or similar capabilities regardless of medium.

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 COMMERCE-

(1) INQUIRIES REQUIRED- Within 90 days after the date of the enactment of this Act, and annually thereafter, the Secretary of Commerce, acting through the Assistant Secretary for Communications and Information, shall complete an inquiry to--

(A) identify any domestic and foreign impediments 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 commerce;

(B) identify constraints imposed by foreign nations or international organizations that constitute barriers to providers of electronic signature products or services; and

(C) identify the degree to which other nations and international organizations are complying 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.

(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 principles specified in paragraph (2) and in a manner consistent with section 101 of this Act. The Secretary of Commerce shall take all actions necessary in a manner consistent with such principles to eliminate or reduce, to the maximum extent possible, the impediments to commerce in electronic signatures, including those identified in the inquiries under subsection (a) for the purpose of facilitating the development of interstate and foreign commerce.

(2) PRINCIPLES- The principles specified in this paragraph are the following:

(A) Free markets and self-regulation, rather than government standard-setting or rules, should govern the development and use of electronic records and electronic signatures.

(B) Neutrality and nondiscrimination should be observed among providers of and technologies for electronic records and electronic signatures.

(C) Parties to a transaction should be permitted to establish reasonable requirements regarding the types of electronic records and electronic signatures acceptable to such parties.

(D) Electronic records and electronic signatures in a form acceptable to the parties should not be denied legal validity on the ground that they are not in writing.

(E) 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.

(c) FOLLOWUP STUDY- Within 3 years after the date of enactment of this Act, the Secretary of Commerce, acting through the Assistant Secretary for Communications and Information, shall conduct an inquiry regarding any State statutes, regulations, or other rules of law enacted or adopted after such date of enactment pursuant to section 102(a), and the extent to which such statutes, regulations, and rules comply with section 102(b). The Secretary shall submit a report to the Congress regarding the results of such inquiry by the conclusion of such 3-year period and such report shall identify any actions taken by the Secretary pursuant to section 102(c) and subsection (b) of this section.

(d) CONSULTATION- In conducting the activities required by this section, the Secretary shall consult with users and providers of electronic signature products and services and other interested persons.

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

(a) AMENDMENT- 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-

`(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 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 or size of entity engaged 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 104 of the Electronic Signatures In Global and National Commerce Act.'.