S. 761 (es) To regulate interstate commerce by electronic means by permitting and encouraging the continued expansion of electronic commerce through the operation of free market forces, and other purposes. [Engrossed in Senate] ...

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        S.761

                       One Hundred Sixth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Monday,
             the twenty-fourth day of January, two thousand


                                 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 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 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, 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--
        (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;
            (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 

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