[106th Congress Public Law 229]
[From the U.S. Government Printing Office]



[DOCID: f:publ229.106]



[[Page 463]]

        ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT

[[Page 114 STAT. 464]]

Public Law 106-229
106th Congress

                                 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 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--ELECTRONIC RECORDS AND SIGNATURES IN COMMERCE

SEC. 101. GENERAL RULE <> OF VALIDITY.

    (a) In General.--Notwithstanding any statute, regulation, or other
rule of law (other than this title and title II), with respect to any
transaction in or affecting interstate or foreign commerce--
            (1) a signature, contract, or other record relating to such
        transaction may not be denied legal effect, validity, or
        enforceability solely because it is in electronic form; and
            (2) a contract relating to such transaction may not be
        denied legal effect, validity, or enforceability solely because
        an electronic signature or electronic record was used in its
        formation.

    (b) Preservation of Rights and Obligations.--This title does not--
            (1) limit, alter, or otherwise affect any requirement
        imposed by a statute, regulation, or rule of law relating to the
        rights and obligations of persons under such statute,
        regulation, or rule of law other than a requirement that
        contracts or other records be written, signed, or in
        nonelectronic form; or
            (2) require any person to agree to use or accept electronic
        records or electronic signatures, other than a governmental
        agency with respect to a record other than a contract to which
        it is a party.

    (c) Consumer Disclosures.--
            (1) Consent to electronic records.--Notwithstanding
        subsection (a), if a statute, regulation, or other rule of law
        requires that information relating to a transaction or
        transactions in or affecting interstate or foreign commerce be
        provided or made available to a consumer in writing, the use of
        an electronic record to provide or make available (whichever

[[Page 114 STAT. 465]]

        is required) such information satisfies the requirement that
        such information be in writing if--
                    (A) the consumer has affirmatively consented to such
                use and has not withdrawn such consent;
                    (B) the consumer, prior to consenting, is provided
                with a clear and conspicuous statement--
                          (i) informing the consumer of (I) any right or
                      option of the consumer to have the record provided
                      or made available on paper or in nonelectronic
                      form, and (II) the right of the consumer to
                      withdraw the consent to have the record provided
                      or made available in an electronic form and of any
                      conditions, consequences (which may include
                      termination of the parties' relationship), or fees
                      in the event of such withdrawal;
                          (ii) informing the consumer of whether the
                      consent applies (I) only to the particular
                      transaction which gave rise to the obligation to
                      provide the record, or (II) to identified
                      categories of records that may be provided or made
                      available during the course of the parties'
                      relationship;
                          (iii) describing the procedures the consumer
                      must use to withdraw consent as provided in clause
                      (i) and to update information needed to contact
                      the consumer electronically; and
                          (iv) informing the consumer (I) how, after the
                      consent, the consumer may, upon request, obtain a
                      paper copy of an electronic record, and (II)
                      whether any fee will be charged for such copy;
                    (C) the consumer--
                          (i) prior to consenting, is provided with a
                      statement of the hardware and software
                      requirements for access to and retention of the
                      electronic records; and
                          (ii) consents electronically, or confirms his
                      or her consent electronically, in a manner that
                      reasonably demonstrates that the consumer can
                      access information in the electronic form that
                      will be used to provide the information that is
                      the subject of the consent; and
                    (D) after the consent of a consumer in accordance
                with subparagraph (A), if a change in the hardware or
                software requirements needed to access or retain
                electronic records creates a material risk that the
                consumer will not be able to access or retain a
                subsequent electronic record that was the subject of the
                consent, the person providing the electronic record--
                          (i) provides the consumer with a statement of
                      (I) the revised hardware and software requirements
                      for access to and retention of the electronic
                      records, and (II) the right to withdraw consent
                      without the imposition of any fees for such
                      withdrawal and without the imposition of any
                      condition or consequence that was not disclosed
                      under subparagraph (B)(i); and
                          (ii) again complies with subparagraph (C).
            (2) Other rights.--
                    (A) Preservation of consumer protections.--Nothing
                in this title affects the content or timing of any
                disclosure or other record required to be provided or
                made
[[Page 114 STAT. 466]]


                available to any consumer under any statute, regulation,
                or other rule of law.
                    (B) Verification or acknowledgment.--If a law that
                was enacted prior to this Act expressly requires a
                record to be provided or made available by a specified
                method that requires verification or acknowledgment of
                receipt, the record may be provided or made available
                electronically only if the method used provides
                verification or acknowledgment of receipt (whichever is
                required).
            (3) Effect of failure to obtain electronic consent or
        confirmation of consent.--The legal effectiveness, validity, or
        enforceability of any contract executed by a consumer shall not
        be denied solely because of the failure to obtain electronic
        consent or confirmation of consent by that consumer in
        accordance with paragraph (1)(C)(ii).
            (4) Prospective effect.--Withdrawal of consent by a consumer
        shall not affect the legal effectiveness, validity, or
        enforceability of electronic records provided or made available
        to that consumer in accordance with paragraph (1) prior to
        implementation of the consumer's withdrawal of consent. A
        consumer's withdrawal of consent shall be effective within a
        reasonable period of time after receipt of the withdrawal by the
        provider of the record. Failure to comply with paragraph (1)(D)
        may, at the election of the consumer, be treated as a withdrawal
        of consent for purposes of this paragraph.
            (5) Prior consent.--This subsection does not apply to any
        records that are provided or made available to a consumer who
        has consented prior to the effective date of this title to
        receive such records in electronic form as permitted by any
        statute, regulation, or other rule of law.
            (6) Oral communications.--An oral communication or a
        recording of an oral communication shall not qualify as an
        electronic record for purposes of this subsection except as
        otherwise provided under applicable law.

    (d) Retention of Contracts and Records.--
            (1) Accuracy and accessibility.--If a statute, regulation,
        or other rule of law requires that a contract or other record
        relating to a transaction in or affecting interstate or foreign
        commerce be retained, that requirement is met by retaining an
        electronic record of the information in the contract or other
        record that--
                    (A) accurately reflects the information set forth in
                the contract or other record; and
                    (B) remains accessible to all persons who are
                entitled to access by statute, regulation, or rule of
                law, for the period required by such statute,
                regulation, or rule of law, in a form that is capable of
                being accurately reproduced for later reference, whether
                by transmission, printing, or otherwise.
            (2) Exception.--A requirement to retain a contract or other
        record in accordance with paragraph (1) does not apply to any
        information whose sole purpose is to enable the contract or
        other record to be sent, communicated, or received.
            (3) Originals.--If a statute, regulation, or other rule of
        law requires a contract or other record relating to a
        transaction in or affecting interstate or foreign commerce to be
        provided,

[[Page 114 STAT. 467]]

        available, or retained in its original form, or provides
        consequences if the contract or other record is not provided,
        available, 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 requirement is satisfied
        by retention of an electronic record of the information on the
        front and back of the check in accordance with paragraph (1).

    (e) Accuracy and Ability To Retain Contracts and Other Records.--
Notwithstanding subsection (a), if a statute, regulation, or other rule
of law requires that a contract or other record relating to a
transaction in or affecting interstate or foreign commerce be in
writing, the legal effect, validity, or enforceability of an electronic
record of such contract or other record may be denied if such electronic
record is not in a form that is capable of being retained and accurately
reproduced for later reference by all parties or persons who are
entitled to retain the contract or other record.
    (f) Proximity.--Nothing in this title affects the proximity required
by any statute, regulation, or other rule of law with respect to any
warning, notice, disclosure, or other record required to be posted,
displayed, or publicly affixed.
    (g) Notarization and Acknowledgment.--If a statute, regulation, or
other rule of law requires a signature or record relating to a
transaction in or affecting interstate or foreign commerce to be
notarized, acknowledged, verified, or made under oath, that requirement
is satisfied if the electronic signature of the person authorized to
perform those acts, together with all other information required to be
included by other applicable statute, regulation, or rule of law, is
attached to or logically associated with the signature or record.
    (h) Electronic Agents.--A contract or other record relating to a
transaction in or affecting interstate or foreign commerce may not be
denied legal effect, validity, or enforceability solely because its
formation, creation, or delivery involved the action of one or more
electronic agents so long as the action of any such electronic agent is
legally attributable to the person to be bound.
    (i) Insurance.--It <> is the specific intent
of the Congress that this title and title II apply to the business of
insurance.

    (j) Insurance Agents and Brokers.--An insurance agent or broker
acting under the direction of a party that enters into a contract by
means of an electronic record or electronic signature may not be held
liable for any deficiency in the electronic procedures agreed to by the
parties under that contract if--
            (1) the agent or broker has not engaged in negligent,
        reckless, or intentional tortious conduct;
            (2) the agent or broker was not involved in the development
        or establishment of such electronic procedures; and
            (3) the agent or broker did not deviate from such
        procedures.

SEC. 102. <> EXEMPTION TO PREEMPTION.

    (a) In General.--A State statute, regulation, or other rule of law
may modify, limit, or supersede the provisions of section 101 with
respect to State law only if such statute, regulation, or rule of law--

[[Page 114 STAT. 468]]

            (1) constitutes an enactment or adoption of the Uniform
        Electronic Transactions Act as approved and recommended for
        enactment in all the States by the National Conference of
        Commissioners on Uniform State Laws in 1999, except that any
        exception to the scope of such Act enacted by a State under
        section 3(b)(4) of such Act shall be preempted to the extent
        such exception is inconsistent with this title or title II, or
        would not be permitted under paragraph (2)(A)(ii) of this
        subsection; or
            (2)(A) specifies the alternative procedures or requirements
        for the use or acceptance (or both) of electronic records or
        electronic signatures to establish the legal effect, validity,
        or enforceability of contracts or other records, if--
                    (i) such alternative procedures or requirements are
                consistent with this title and title II; and
                    (ii) such alternative procedures or requirements do
                not require, or accord greater legal status or effect
                to, the implementation or application of a specific
                technology or technical specification for performing the
                functions of creating, storing, generating, receiving,
                communicating, or authenticating electronic records or
                electronic signatures; and
            (B) if enacted or adopted after the date of the enactment of
        this Act, makes specific reference to this Act.

    (b) Exceptions for Actions by States as Market Participants.--
Subsection (a)(2)(A)(ii) shall not apply to the statutes, regulations,
or other rules of law governing procurement by any State, or any agency
or instrumentality thereof.
    (c) Prevention of Circumvention.--Subsection (a) does not permit a
State to circumvent this title or title II through the imposition of
nonelectronic delivery methods under section 8(b)(2) of the Uniform
Electronic Transactions Act.

SEC. 103. <> SPECIFIC EXCEPTIONS.

    (a) Excepted Requirements.--The provisions of section 101 shall not
apply to a contract or other record to the extent it is governed by--
            (1) a statute, regulation, or other rule of law governing
        the creation and execution of wills, codicils, or testamentary
        trusts;
            (2) a State statute, regulation, or other rule of law
        governing adoption, divorce, or other matters of family law; or
            (3) the Uniform Commercial Code, as in effect in any State,
        other than sections 1-107 and 1-206 and Articles 2 and 2A.

    (b) Additional Exceptions.--The provisions of section 101 shall not
apply to--
            (1) court orders or notices, or official court documents
        (including briefs, pleadings, and other writings) required to be
        executed in connection with court proceedings;
            (2) any notice of--
                    (A) the cancellation or termination of utility
                services (including water, heat, and power);
                    (B) default, acceleration, repossession,
                foreclosure, or eviction, or the right to cure, under a
                credit agreement secured by, or a rental agreement for,
                a primary residence of an individual;

[[Page 114 STAT. 469]]

                    (C) the cancellation or termination of health
                insurance or benefits or life insurance benefits
                (excluding annuities); or
                    (D) recall of a product, or material failure of a
                product, that risks endangering health or safety; or
            (3) any document required to accompany any transportation or
        handling of hazardous materials, pesticides, or other toxic or
        dangerous materials.

    (c) Review of Exceptions.--
            (1) Evaluation required.--The Secretary of Commerce, acting
        through the Assistant Secretary for Communications and
        Information, shall review the operation of the exceptions in
        subsections (a) and (b) to evaluate, over a period of 3 years,
        whether such exceptions continue to be necessary for the
        protection of consumers. <> Within 3
        years after the date of enactment of this Act, the Assistant
        Secretary shall submit a report to the Congress on the results
        of such evaluation.
            (2) Determinations.--If a Federal regulatory agency, with
        respect to matter within its jurisdiction, determines after
        notice and an opportunity for public comment, and publishes a
        finding, that one or more such exceptions are no longer
        necessary for the protection of consumers and eliminating such
        exceptions will not increase the material risk of harm to
        consumers, such agency may extend the application of section 101
        to the exceptions identified in such finding.

SEC. 104. <> APPLICABILITY TO FEDERAL AND STATE
            GOVERNMENTS.

    (a) Filing and Access Requirements.--Subject to subsection (c)(2),
nothing in this title limits or supersedes any requirement by a Federal
regulatory agency, self-regulatory organization, or State regulatory
agency that records be filed with such agency or organization in
accordance with specified standards or formats.
    (b) Preservation of Existing Rulemaking Authority.--
            (1) Use of authority to interpret.--Subject to paragraph (2)
        and subsection (c), a Federal regulatory agency or State
        regulatory agency that is responsible for rulemaking under any
        other statute may interpret section 101 with respect to such
        statute through--
                    (A) the issuance of regulations pursuant to a
                statute; or
                    (B) to the extent such agency is authorized by
                statute to issue orders or guidance, the issuance of
                orders or guidance of general applicability that are
                publicly available and published (in the Federal
                Register in the case of an order or guidance issued by a
                Federal regulatory agency).
        This paragraph does not grant any Federal regulatory agency or
        State regulatory agency authority to issue regulations, orders,
        or guidance pursuant to any statute that does not authorize such
        issuance.
            (2) Limitations on interpretation authority.--
        Notwithstanding paragraph (1), a Federal regulatory agency shall
        not adopt any regulation, order, or guidance described in
        paragraph (1), and a State regulatory agency is preempted by
        section 101 from adopting any regulation, order, or guidance
        described in paragraph (1), unless--
                    (A) such regulation, order, or guidance is
                consistent with section 101;

[[Page 114 STAT. 470]]

                    (B) such regulation, order, or guidance does not add
                to the requirements of such section; and
                    (C) such agency finds, in connection with the
                issuance of such regulation, order, or guidance, that--
                          (i) there is a substantial justification for
                      the regulation, order, or guidance;
                          (ii) the methods selected to carry out that
                      purpose--
                                    (I) are substantially equivalent to
                                the requirements imposed on records that
                                are not electronic records; and
                                    (II) will not impose unreasonable
                                costs on the acceptance and use of
                                electronic records; and
                          (iii) the methods selected to carry out that
                      purpose do not require, or accord greater legal
                      status or effect to, the implementation or
                      application of a specific technology or technical
                      specification for performing the functions of
                      creating, storing, generating, receiving,
                      communicating, or authenticating electronic
                      records or electronic signatures.
            (3) Performance standards.--
                    (A) Accuracy, record integrity, accessibility.--
                Notwithstanding paragraph (2)(C)(iii), a Federal
                regulatory agency or State regulatory agency may
                interpret section 101(d) to specify performance
                standards to assure accuracy, record integrity, and
                accessibility of records that are required to be
                retained. Such performance standards may be specified in
                a manner that imposes a requirement in violation of
                paragraph (2)(C)(iii) if the requirement (i) serves an
                important governmental objective; and (ii) is
                substantially related to the achievement of that
                objective. Nothing in this paragraph shall be construed
                to grant any Federal regulatory agency or State
                regulatory agency authority to require use of a
                particular type of software or hardware in order to
                comply with section 101(d).
                    (B) Paper or printed form.--Notwithstanding
                subsection (c)(1), a Federal regulatory agency or State
                regulatory agency may interpret section 101(d) to
                require
                retention of a record in a tangible printed or paper
                form if--
                          (i) there is a compelling governmental
                      interest relating to law enforcement or national
                      security for imposing such requirement; and
                          (ii) imposing such requirement is essential to
                      attaining such interest.
            (4) Exceptions for actions by government as market
        participant.--Paragraph (2)(C)(iii) shall not apply to the
        statutes, regulations, or other rules of law governing
        procurement by the Federal or any State government, or any
        agency or instrumentality thereof.

    (c) Additional Limitations.--
            (1) Reimposing paper prohibited.--Nothing in subsection (b)
        (other than paragraph (3)(B) thereof) shall be construed to
        grant any Federal regulatory agency or State regulatory agency
        authority to impose or reimpose any requirement that a record be
        in a tangible printed or paper form.

[[Page 114 STAT. 471]]

            (2) Continuing obligation under government paperwork
        elimination act.--Nothing in subsection (a) or (b) relieves any
        Federal regulatory agency of its obligations under the
        Government Paperwork Elimination Act (title XVII of Public Law
        105-277).

    (d) Authority To Exempt From Consent Provision.--
            (1) In general.--A Federal regulatory agency may, with
        respect to matter within its jurisdiction, by regulation or
        order issued after notice and an opportunity for public comment,
        exempt without condition a specified category or type of record
        from the requirements relating to consent in section 101(c) if
        such exemption is necessary to eliminate a substantial burden on
        electronic commerce and will not increase the material risk of
        harm to consumers.
            (2) Prospectuses.--
        Within <> 30 days after the date
        of enactment of this Act, the Securities and Exchange Commission
        shall issue a regulation or order pursuant to paragraph (1)
        exempting from section 101(c) any records that are required to
        be provided in order to allow advertising, sales literature, or
        other information concerning a security issued by an investment
        company that is registered under the Investment Company Act of
        1940, or concerning the issuer thereof, to be excluded from the
        definition of a prospectus under section 2(a)(10)(A) of the
        Securities Act of 1933.

    (e) Electronic Letters of Agency.--The Federal Communications
Commission shall not hold any contract for telecommunications service or
letter of agency for a preferred carrier change, that otherwise complies
with the Commission's rules, to be legally ineffective, invalid, or
unenforceable solely because an electronic record or electronic
signature was used in its formation or authorization.

SEC. 105. <> STUDIES.

    (a) Delivery.--Within <> 12 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 private express
mail services. <> The Secretary shall submit a report to
the Congress regarding the results of such inquiry by the conclusion of
such 12-month period.

    (b) Study of <> Electronic Consent.--Within 12
months after the date of the enactment of this Act, the Secretary of
Commerce and the Federal Trade Commission shall submit a report to the
Congress evaluating any benefits provided to consumers by the procedure
required by section 101(c)(1)(C)(ii); any burdens imposed on electronic
commerce by that provision; whether the benefits outweigh the burdens;
whether the absence of the procedure required by section
101(c)(1)(C)(ii) would increase the incidence of fraud directed against
consumers; and suggesting any revisions to the provision deemed
appropriate by the Secretary and the Commission.

<>
In conducting this evaluation, the Secretary and the
Commission shall solicit comment from the general public, consumer
representatives, and electronic commerce businesses.

[[Page 114 STAT. 472]]

SEC. 106. <> DEFINITIONS.

    For purposes of this title:
            (1) Consumer.--The term ``consumer'' means an individual who
        obtains, through a transaction, products or services which are
        used primarily for personal, family, or household purposes, and
        also means the legal representative of such an individual.
            (2) Electronic.--The term ``electronic'' means relating to
        technology having electrical, digital, magnetic, wireless,
        optical, electromagnetic, or similar capabilities.
            (3) Electronic agent.--The term ``electronic agent'' means a
        computer program or an electronic or other automated means used
        independently to initiate an action or respond to electronic
        records or performances in whole or in part without review or
        action by an individual at the time of the action or response.
            (4) Electronic record.--The term ``electronic record'' means
        a contract or other record created, generated, sent,
        communicated, received, or stored by electronic means.
            (5) Electronic signature.--The term ``electronic signature''
        means an electronic sound, symbol, or process, attached to or
        logically associated with a contract or other record and
        executed or adopted by a person with the intent to sign the
        record.
            (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.
            (7) Information.--The term ``information'' means data, text,
        images, sounds, codes, computer programs, software, databases,
        or the like.
            (8) Person.--The term ``person'' means an individual,
        corporation, business trust, estate, trust, partnership, limited
        liability company, association, joint venture, governmental
        agency, public corporation, or any other legal or commercial
        entity.
            (9) 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.
            (10) Requirement.--The term ``requirement'' includes a
        prohibition.
            (11) Self-regulatory organization.--The term ``self-
        regulatory organization'' means an organization 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 applicable to
        its members that are enforced by such organization or entity, by
        a Federal regulatory agency, or by another self-regulatory
        organization.
            (12) State.--The term ``State'' includes the District of
        Columbia and the territories and possessions of the United
        States.
            (13) Transaction.--The term ``transaction'' means an action
        or set of actions relating to the conduct of business, consumer,
        or commercial affairs between two or more persons, including any
        of the following types of conduct--
                    (A) the sale, lease, exchange, licensing, or other
                disposition of (i) personal property, including goods
                and intangibles, (ii) services, and (iii) any
                combination thereof; and

[[Page 114 STAT. 473]]

                    (B) the sale, lease, exchange, or other disposition
                of any interest in real property, or any combination
                thereof.

SEC. 107. <> EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this title
shall be effective on October 1, 2000.
    (b) Exceptions.--
            (1) Record retention.--
                    (A) In general.--Subject to subparagraph (B), this
                title shall be effective on March 1, 2001, with respect
                to a requirement that a record be retained imposed by--
                          (i) a Federal statute, regulation, or other
                      rule of law, or
                          (ii) a State statute, regulation, or other
                      rule of law administered or promulgated by a State
                      regulatory agency.
                    (B) Delayed effect for pending rulemakings.--If on
                March 1, 2001, a Federal regulatory agency or State
                regulatory agency has announced, proposed, or initiated,
                but not completed, a rulemaking proceeding to prescribe
                a regulation under section 104(b)(3) with respect to a
                requirement described in subparagraph (A), this title
                shall be effective on June 1, 2001, with respect to such
                requirement.
            (2) Certain guaranteed and insured loans.--With regard to
        any transaction involving a loan guarantee or loan guarantee
        commitment (as those terms are defined in section 502 of the
        Federal Credit Reform Act of 1990), or involving a program
        listed in the Federal Credit Supplement, Budget of the United
        States, FY 2001, this title applies only to such transactions
        entered into, and to any loan or mortgage made, insured, or
        guaranteed by the United States Government thereunder, on and
        after one year after the date of enactment of this Act.
            (3) Student loans.--With respect to any records that are
        provided or made available to a consumer pursuant to an
        application for a loan, or a loan made, pursuant to title IV of
        the Higher Education Act of 1965, section 101(c) of this Act
        shall not apply until the earlier of--
                    (A) such time as the Secretary of Education
                publishes revised promissory notes under section 432(m)
                of the Higher Education Act of 1965; or
                    (B) one year after the date of enactment of this
                Act.

                     TITLE II--TRANSFERABLE RECORDS

SEC. 201. <> TRANSFERABLE RECORDS.

    (a) Definitions.--For purposes of this section:
            (1) Transferable record.--The term ``transferable record''
        means an electronic record that--
                    (A) would be a note under Article 3 of the Uniform
                Commercial Code if the electronic record were in
                writing;
                    (B) the issuer of the electronic record expressly
                has agreed is a transferable record; and
                    (C) relates to a loan secured by real property.

[[Page 114 STAT. 474]]

        A transferable record may be executed using an electronic
        signature.
            (2) Other definitions.--The terms ``electronic record'',
        ``electronic signature'', and ``person'' have the same meanings
        provided in section 106 of this Act.

    (b) Control.--A person has control of a transferable record if a
system employed for evidencing the transfer of interests in the
transferable record reliably establishes that person as the person to
which the transferable record was issued or transferred.
    (c) Conditions.--A system satisfies subsection (b), and a person is
deemed to have control of a transferable record, if the transferable
record is created, stored, and assigned in such a manner that--
            (1) a single authoritative copy of the transferable record
        exists which is unique, identifiable, and, except as otherwise
        provided in paragraphs (4), (5), and (6), unalterable;
            (2) the authoritative copy identifies the person asserting
        control as--
                    (A) the person to which the transferable record was
                issued; or
                    (B) if the authoritative copy indicates that the
                transferable record has been transferred, the person to
                which the transferable record was most recently
                transferred;
            (3) the authoritative copy is communicated to and maintained
        by the person asserting control or its designated custodian;
            (4) copies or revisions that add or change an identified
        assignee of the authoritative copy can be made only with the
        consent of the person asserting control;
            (5) each copy of the authoritative copy and any copy of a
        copy is readily identifiable as a copy that is not the
        authoritative copy; and
            (6) any revision of the authoritative copy is readily
        identifiable as authorized or unauthorized.

    (d) Status as Holder.--Except as otherwise agreed, a person having
control of a transferable record is the holder, as defined in section 1-
201(20) of the Uniform Commercial Code, of the transferable record and
has the same rights and defenses as a holder of an equivalent record or
writing under the Uniform Commercial Code, including, if the applicable
statutory requirements under section 3-302(a), 9-308, or revised section
9-330 of the Uniform Commercial Code are satisfied, the rights and
defenses of a holder in due course or a purchaser, respectively.
Delivery, possession, and endorsement are not required to obtain or
exercise any of the rights under this subsection.
    (e) Obligor Rights.--Except as otherwise agreed, an obligor under a
transferable record has the same rights and defenses as an equivalent
obligor under equivalent records or writings under the Uniform
Commercial Code.
    (f) Proof of Control.--If requested by a person against which
enforcement is sought, the person seeking to enforce the transferable
record shall provide reasonable proof that the person is in control of
the transferable record. Proof may include access to the authoritative
copy of the transferable record and related business records sufficient
to review the terms of the transferable record and to establish the
identity of the person having control of the transferable record.

[[Page 114 STAT. 475]]

    (g) UCC References.--For purposes of this subsection, all references
to the Uniform Commercial Code are to the Uniform Commercial Code as in
effect in the jurisdiction the law of which governs the transferable
record.

SEC. 202. <> EFFECTIVE DATE.

    This title shall be effective 90 days after the date of enactment of
this Act.

        TITLE III--PROMOTION OF INTERNATIONAL ELECTRONIC COMMERCE

SEC. 301. PRINCIPLES <> GOVERNING THE USE OF
                        ELECTRONIC SIGNATURES IN INTERNATIONAL
                        TRANSACTIONS.

    (a) Promotion of Electronic Signatures.--
            (1) Required actions.--The Secretary of Commerce 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,
        for the purpose of facilitating the development of interstate
        and foreign commerce.
            (2) Principles.--The principles specified in this paragraph
        are the following:
                    (A) 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.
                    (B) 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.
                    (C) 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.
                    (D) Take a nondiscriminatory approach to electronic
                signatures and authentication methods from other
                jurisdictions.

    (b) 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.
    (c) Definitions.--As used in this section, the terms ``electronic
record'' and ``electronic signature'' have the same meanings provided in
section 106 of this Act.

[[Page 114 STAT. 476]]

             TITLE IV--COMMISSION ON ONLINE CHILD PROTECTION

SEC. 401. AUTHORITY TO ACCEPT GIFTS.

    Section 1405 of the Child Online Protection Act (47 U.S.C. 231 note)
is amended by inserting after subsection (g) the following new
subsection:
    ``(h) Gifts, Bequests, and Devises.--The Commission may accept, use,
and dispose of gifts, bequests, or devises of services or property, both
real (including the use of office space) and personal, for the purpose
of aiding or facilitating the work of the Commission. Gifts or grants
not used at the termination of the Commission shall be returned to the
donor or grantee.''.

    Approved June 30, 2000.

LEGISLATIVE HISTORY--S. 761 (H.R. 1714):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 106-341, accompanying H.R. 1714, Pt. 1 (Comm. on
Commerce) and Pt. 2 (Comm. on the Judiciary).
SENATE REPORTS: Nos. 106-131 (Comm. on Commerce, Science, and
Transportation) and 106-661 (Comm. of Conference).
CONGRESSIONAL RECORD:
                                                        Vol. 145 (1999):
                                    Nov. 19, considered and passed
                                        Senate.
                                                        Vol. 146 (2000):
                                    Feb. 16, considered and passed
                                        House, amended, in lieu of H.R.
                                        1714.
                                    June 14, House agreed to conference
                                        report.
                                    June 15, 16, Senate considered and
                                        agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 36 (2000):
            June 30, Presidential remarks and statement.