FC: State legislators call feds' digital sig bill an "unfunded mandate"

[Declan McCullagh <declan () well com>]

http://www.usnewswire.com/topnews/Current_Releases/0316-106.html

State Legislators Declare Digital Signatures Bill Unfunded Mandate
U.S. Newswire
16 Mar 8:55

State Legislators Declare House Bill on Digital Signatures an
Unfunded Mandate
To: National Desk
Contact: Bill Wyatt, 202-624-8667,
               Neal Osten, 202-624-8660,
               or Graham Williams, 202-624-8683,
               all of the National Conference of State Legislators;
               Web site: http://www.ncsl.org

WASHINGTON, March 16 /U.S. Newswire/ -- The National Conference
of State Legislatures (NCSL) has declared that a House bill
preempting all state laws and regulations pertaining to electronic
records transmittal, would amount to an unfunded federal mandate on
state and local governments.

Under Section 102(b) of H.R. 1714, states would be required to
process electronic records from financial institutions and other
businesses in any number of formats and technologies. The cost for
states to accommodate these records in unlimited formats would
amount to an unfunded mandate, as states would need to expend funds
as a result of congressional action.

"State legislators are disappointed that a Republican-led
Congress would seek to bypass the provisions of the Unfunded
Mandate Reform Act of 1995 (UMRA)," said Michigan State Sen. Joanne
Emmons, Chair of NCSL's Commerce and Communications Committee,
noting that UMRA was one of the first pieces of legislation enacted
by the new Republican majority in 1995.

"We are dismayed by the House version, H.R. 1714, which seeks to
eviscerate state oversight authority for insurance and other
financial services as well as our ability to ensure the financial
well being of our mutual constituents," continued Sen. Emmons.
"The House version would seriously and unnecessarily undermine
consumer safety and state sovereignty."

States are the primary regulators of insurance and
state-chartered banks, and in that capacity must require certain
records to be remitted to the state. This is similar to the
oversight responsibilities the federal financial regulators such as
the Federal Deposit Insurance Commission (FDIC), the Office of the
Comptroller of the Currency (OCC), the Federal Reserve Board (FED)
and the Securities and Exchange Commission (SEC) provide on the
national level. H.R. 1714 exempts all federal agencies from the
provisions on the transmittal of electronic records.

"The FDIC, the OCC, the Fed and SEC can require how electronic
records will be submitted. My colleagues across the country feel
strongly that state regulators need and deserve the same
flexibility as federal regulators," declared Emmons.

Last December, NCSL unanimously endorsed the Senate's version,
S. 761, which preempts only those state laws restricting or
prohibiting the use of electronic signatures and records. S. 761
also provides the state the ability to reassert its authority by
passing the Uniform Electronic Transactions Act (UETA) as
promulgated by the National Conference of Commissioners on Uniform
State Law.

Currently, more than 42 state legislatures have enacted state
laws related to the validity of electronic signatures and are now
in the process of bringing those laws in conformity with UETA. NCSL
will continue to support efforts that would create a national
standard for digital signatures. However, NCSL believes the best
means to do so is by enacting S. 761.

-0-
/U.S. Newswire 202-347-2770/
03/16 08:55

Copyright 2000, U.S. Newswire

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