[Pages S9069-S9070]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THE MILLENNIUM DIGITAL COMMERCE ACT

Mr. LOTT. Mr. President, I rise to address the need for prompt action
on S. 761, the Millennium Digital Commerce Act. Senator Abraham has
crafted a solid legislative measure that will promote continued growth
in electronic commerce.
The Millennium Digital Commerce Act has 11 cosponsors including
Senators Wyden, Torricelli, McCain, Burns, Frist, Gorton, Brownback,
Allard, Grams, Hagel, and myself.
Mr. President, on June 23, almost one month ago, the Senate Commerce
Committee unanimously approved and ordered S. 761 reported with an
amendment in the nature of a substitute. This substitute is widely
supported by the States, industry, and the administration. In fact, on
June 22, the day before the mark-up, the Commerce Department issued a
formal letter of support for this bipartisan measure.
Mr. President, I ask unanimous consent to have printed in the Record
the Administration's letter.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

General Counsel of the

U.S. Department of Commerce,

Washington, DC, June 22, 1999.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: This letter conveys the views of the
Department of Commerce on the substitute version of S. 761,
the ``Millennium Digital Signature Act,'' that we understand
will be marked-up by the Senate Commerce Committee. A copy of
the substitute that serves as the basis for these views is
attached to this letter.
In July 1997 the Administration issued the Framework for
Global Electronic Commerce, wherein President Clinton and
Vice President Gore recognized the importance of developing a
predictable, minimalist legal environment in order to promote
electronic commerce. President Clinton directed Secretary
Daley ``to work with the private sector, State and local
governments, and foreign governments to support the
development, both domestically and internationally, of a
uniform commercial legal framework that recognizes,
facilitates, and enforces electronic transactions
worldwide.''
Since July 1997, we have been consulting with countries to
encourage their adoption of an approach to electronic
authentication that will assure parties that their
transactions will be recognized and enforced globally. Under
this approach, countries would: (1) eliminate paper-based
legal barriers to electronic transactions by implementing the
relevant provisions of the 1996 UNCITRAL Model Law on
Electronic Commerce; (2) reaffirm the rights of parties to
determine for themselves the appropriate technological means
of authenticating their transactions; (3) ensure any party
the opportunity to prove in court that a particular
authentication technique is sufficient to create a legally
binding agreement; and (4) state that governments should
treat technologies and providers of authentication services
from other countries in a non-discriminatory manner.
The principles set out in section 5 of S. 761 mirror those
advocated by the Administration in international fora, and we
support their adoption in federal legislation. In October
1998, the OECD Ministers approved a Declaration on
Authentication for Electronic Commerce affirming these
principles. In addition, these principles have also been
incorporated into joint statements between the United States
and Japan, Australia, France, the United Kingdom and South
Korea. Congressional endorsement of the principles would
greatly assist in developing the full potential of
electronic commerce as was envisioned by the President and
Vice President Gore in The Framework for Global Electronic
Commerce.
On the domestic front, the National Conference of
Commissioners of Uniform State Law (NCCUSL) has been working
since early 1997 to craft a uniform law for consideration by
State legislatures that would adapt standards governing
private commercial transactions to cyberspace. This model law
is entitled the ``Uniform Electronic Transactions Act''
(UETA), and I understand that it will receive final
consideration at the NCCUSL Annual Meeting at the end of
July. In the view of the Administration, the current UETA
draft adheres to the minimalist ``enabling'' framework
advocated by the Administration, and we believe that UETA
will provide an excellent domestic legal model for electronic
transactions, as well as a strong model for the rest of the
world.
Section 6 of the substitute (``Interstate Contract
Certainty'') addresses the concern that several years will
elapse before the UETA is enacted by the states. It fills
that gap temporarily with federal legal standards, but
ultimately leaves the issue to be resolved by each state as
it considers the UETA.
With regard to commercial transactions affecting interstate
commerce, this section eliminates statutory rules requiring
paper contracts, recognizes the validity of electronic
signatures as a substitute for paper signatures, and provides
that parties may decide for themselves, should they so
choose, what method of electronic signature to use.
Another important aspect of the substitute is that it would
provide for the termination of any federal preemption as to
the law of any state that adopts the UETA (including any of
the variations that the UETA may allow) and maintains it in
effect. We note that this provision would impose no
overarching requirement that the UETA or individual state
laws be ``consistent'' with the specific terms of this Act;
this provision, and its potential effect, will be closely
monitored by the Administration as the legislation
progresses. There is every reason to believe that the States
will continue to move, as they consistently have moved,
toward adopting and maintaining an ``enabling'' approach to
electronic commerce consistent with the principles stated in
this Act. We therefore believe that any preemption that may
ultimately result from this legislation can safely be allowed
to ``sunset'' for any state upon its adoption of the eventual
uniform electronic transactions legislation developed by the
states.
We also support limiting the scope of this Act to
commercial transactions, which is consistent with the current
approach of the draft UETA, and utilizing definitions in the
Act that mirror those of the current draft UETA, which we
consider appropriate in light of the expert effort that has
been directed to the development of the UETA provisions under
the procedures of NCCUSL.
With regard to section 7(a), the Administration requests
that the Committee delete the reference to the Office of
Management and Budget (``OMB''); there is no need for
agencies to file duplicate reports. The report that the
Secretary of Commerce is directed to prepare pursuant to
section 7(b) will, of course, be coordinated with OMB.
The substitute version of S. 761 would in our view provide
an excellent framework for the speedy development of uniform
electronic transactions legislation in an environment of
partnership between the Federal Government and the states. We
look forward to working with the Committee on the bill as it
proceeds through the legislative process.
The Office of Management and Budget advises that there is
no objection to the transmittal of this report from the
standpoint of the Administration's program.
Sincerely,
Andrew J. Pincus.

Mr. LOTT. Mr. President, the Millennium Digital Commerce Act provides
a baseline national framework for conducting online business to
business transactions. It is vital to interstate electronic commerce
because it would provide legal standing for electronic signatures on
contracts and other business transactions.
This common sense and timely legislation will help promote continued
growth in electronic commerce. It is good for business, consumers, and
the overall American economy.
While more than forty States have laws on the books concerning the
use of authentication technology such as electronic signatures, the
States have not yet chosen to adopt the same approach. This hodgepodge
of State laws will undoubtedly have a chilling effect on e-commerce.
This Congress cannot and should not sit by and wait until the States
coordinate this milieu of laws on electronic signatures. This delay
would unnecessarily restrain the growth of our Nation's economic well-
being.

[[Page S9070]]

The Millennium Digital Commerce Act is an interim step that will help
facilitate interstate and international commerce. It is a necessary
precursor to state-by-state adoption of the Uniform Electronic
Transactions Act (UETA).
Mr. President, my colleagues on both sides of the aisle strongly
agree that it is now time to move S. 761 to the floor.
It has broad support and I hope we can work together to move this
bipartisan pro-technology, pro-electronic commerce legislation forward
as soon as possible.

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