Amendment to HR 1714 offered by Rep. Billy Tauzin (R-LA).
Adopted at mark up session of the House Telecom Subcommittee.
Date: July 29, 1999.
Source: House Commerce Committee. This document was created by Tech Law Journal by scanning a photocopy and converting to HTML.

Editor's Note: This amendment was approved by a unanimous voice vote. It replaces Titles I and II of HR 1714 IH. Last week the Finance Subcommittee adopted an amendment which replaces Title III.

AMENDMENT TO H.R. 1714
OFFERED BY MR. TAUZIN

Page 2, beginning on line 1, strike titles I and II and insert the following:

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, notwithstanding any statute, regulation or other rule of law, the legal effect, validity, or enforceability of such contract or agreement shall not be denied---

(1) on the ground that the contract or agreement is not in writing if the contract or agreement is an electronic record; or

(2) 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 requirements regarding [begin page 2] the use 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 such statute, regulation, or rule of law---

(1)(A) constitutes an enactment or adoption of the Uniform Electronic Transaction Act as reported to the State legislatures by the National Conference of Commissioners on Uniform State Laws; or

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

(2) in the case of a State statute, regulation, or other rule of law, is enacted or adopted within 4 years after the date of enactment of this Act; and

(3) makes specific reference to the provisions of section 101.

(b) EFFECT ON OTHER LAWS.---A State statute, regulation or other rule of law (including an insurance statute, regulation, or rule of law) that modifies, limits, or [begin page 3] 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---

[begin page 4]

(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 information or data in electronic form, attached to or logically associated with an electronic record, that---

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

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

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

[begin page 5]

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

[begin page 6]

(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:

[begin page 7]

(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 requirements regarding the use 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 effect, validity, or enforceability 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 [begin page 8] and Information, shall conduct all 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.

(e) PRIVACY.---Nothing in this section shall be construed to require the Secretary or the Assistant Secretary to take any action that would adversely affect the privacy of Consumers.

(f) DEFINITIONS.---As used in this section, the terms "electronic record" and "electronic signature" have the meanings provided in section 104 of the Electronic Signatures in Global and National Commerce Act.