MINUTES OF THE meeting
of the
ASSEMBLY Subcommittee on Judiciary
Seventy-First Session
May 4, 2001
The Assembly Subcommittee on Judiciarywas called to order at 1:15 p.m. on Friday, May 4, 2001. Chairman John Oceguera presided in Room 3138 of the Legislative Building, Carson City, Nevada and by videoconference to Room 4401 of the Grant Sawyer Office Building in Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. John Oceguera, Chairman
Mrs. Sharron Angle
Ms. Barbara Buckley
STAFF MEMBERS PRESENT:
Nicolas Anthony, Committee Policy Analyst
Risa B. Lang, Committee Counsel
Cindy Clampitt, Committee Secretary
OTHERS PRESENT:
Michael Alonso, Jones Vargas
Don Ashworth, Probate Commissioner, Eighth Judicial District Court
Frank Daykin, formerly of the Legislative Counsel Bureau and
presently a Uniform Law Commissioner
John Sande, Jones Vargas
Kathleen Delaney, Attorney General’s Office
Chairman Oceguera called the subcommittee to order and noted all members were present at 1:15 p.m.
Senate Bill 33: Revises various provisions governing probate. (BDR 12-853)
He requested staff from the Legal Division of the Legislative Counsel Bureau to brief the members on the current status of S.B. 33 and any amendments that had been offered to the bill.
Ms. Lang, Committee Counsel, stated the bill dealt with probate law. The bill was heard before the full committee, and testimony was taken. An amendment had been proposed relating to electronic wills. There had been considerable testimony, both in support and opposition to the amendment.
Chairman Oceguera asked if Mr. Mike Alonso presented the proposed amendment to the bill. Ms. Lang responded affirmatively.
Mr. Michael Alonso, of Jones Vargas, provided subcommittee members with a letter (Exhibit C) from Mr. Woodhead who was unable to attend the meeting. Included in Exhibit C were letters from Robert Armstrong, Mark Knobel, and Marilyn Skender, other attorneys who were well-respected estate planning attorneys in support of the proposed amendment. Another attachment to Exhibit C was a document prepared by Mr. Woodhead in a question and answer format that would be helpful in the comparison of electronic wills to attested and holographic wills and intervivos trusts that were not wills at all. He offered to go through the documents with the subcommittee. Chairman Oceguera suggested further discussion and that he wait for testimony from those in opposition to the amendment.
Chairman Oceguera noted in discussions with legal counsel, the initial amendment would have to be edited because the current amendment did not clarify everything that needed to be addressed.
Commissioner Don Ashworth, Probate Commissioner, Eight Judicial District Court, testified from Las Vegas that he had sent the Chair two memos on the previous day. One was from Mr. Gardner Jolley, Chairman of the Probate Committee established in 1997. The other memo was from Ms. Pam Gulliher, Probate Commissioner in Washoe County.
He commented the Probate Committee was neutral on S.B. 33, but under the current legislative time constraints, the committee felt there might be issues that needed further study during the interim period. He requested the bill be postponed so that the committee could review it further.
Chairman Oceguera informed Commissioner Ashworth that it was the intention of the Chairman of the Assembly Committee on Judiciary to move forward with the bill. He added if the amendment kept the bill from moving forward, the Chair of the subcommittee would be opposed to that.
Commissioner Ashworth asked if the Chair was stating he would be in favor of proceeding with the bill with the language on page 3, line 3, of the bill that stated, “. . . this chapter shall not apply to laws governing the creation and execution of wills, codicils, or testamentary trusts.” He commented that was the only section of the bill, which his committee was in favor of leaving in the current bill. He added he had had an opportunity to review the remainder of the bill, and he had questions regarding certain provisions from a legal point of view, but not from a probate point of view.
Chairman Oceguera informed the subcommittee that Commissioner Ashworth was reading from S.B. 49. Commissioner Ashworth asked if S.B. 33, first reprint, was the form of the bill as it had been passed by the Senate. The Chair answered affirmatively.
Mr. Alonso asked if Commissioner Ashworth had any questions concerning the amendments proposed to S.B. 33. Mr. Nicholas Anthony, Committee Policy Analyst, explained the discussion from Commissioner Ashworth had centered on S.B. 49, not S.B. 33.
Mr. Frank Daykin, formerly of the Legislative Counsel Bureau and presently a Uniform Law Commissioner, clarified that none of the proposed amendments to S.B. 33 would affect the language in S.B. 49 that was mentioned by the Commissioner.
The Chair closed the hearing on S.B. 33 and opened the hearing on S.B. 49.
Senate Bill 49: Adopts Uniform Electronic Transactions Act. (BDR 59-258)
Commissioner Ashworth stated the Probate Committee was neutral on S.B. 49, first reprint, because it had no effect on the probate court.
Chairman Oceguera asked Commissioner Ashworth to clarify what he specifically objected to in the two bills being heard. Commission Ashworth stated the Probate Committee was opposed to page 3, line 3, of S.B. 49. He requested that line be omitted to make the bill applicable to wills, codicils, and testamentary trusts.
Mr. Daykin stated that would not be necessary because S.B. 49 would not be applicable by its terms to those legal documents. He added wills, codicils, and testamentary trusts would be the objects of the special provisions regarding electronic signatures that Mr. Alonso proposed as amendments to S.B. 33.
Chairman Oceguera stated the whole issue would be with S.B. 33 and the amendments that Mr. Alonso proposed. He asked Commissioner Ashworth to confirm whether or not he was in support of those amendments. Commissioner Ashworth replied he had not seen the amendments. The Chair explained the proposed amendments were the same as those proposed at the full committee hearing, and Commissioner Ashworth had sent the Chair a fax relating to the same issue (Exhibit D).
Mr. Alonso explained when the amendment process had begun, there had been discussion about amending S.B. 49 to take out the language on page 3, line 3, but Mr. Daykin had convinced the sponsors that S.B. 49 would not affect the process even with the language present. He added what did need to be done was to amend the probate code. The proposal would not amend subsection 2(a) and 2(b), but was placing the amendments in S.B. 33.
Mr. Alonso stated one request for change in S.B. 49 to which Mr. Daykin agreed was at subsection 2(c) on page 3 to delete the sentence that said, “Chapters 162 to 167 inclusive of Nevada Revised Statutes (NRS),” because those chapters related to the Testamentary Trusts and Uniform Transfers to Minors Act and should not be an exclusion.
Mr. Daykin concurred with Mr. Alonso stating subsection 2(c) was not necessary, whether the amendments proposed by Mr. Alonso were adopted or not, because the construction of S.B. 33 already assimilated the provisions on trusts into the provisions on wills. It was placed in the bill because the law, when S.B. 49 was drafted, had not made that assimilation.
Commissioner Ashworth requested the subcommittee to relate the proposed amendments to him. Mr. Alonso explained the amendments to S.B. 33 would allow electronic wills and establish a framework for the allowance of the same. By amending S.B. 33, the probate code would be changed to allow the admission into probate of electronic wills as long as they were crafted with the safeguards set forth in the amendment language through biometric authentication procedures.
Commissioner Ashworth stated one concern with the proposal was that the main portion of S.B. 49 related to the authentication of signatures. The authentication of signatures was only one item required. The other was the content of the will and the exact words stated in the document. He asked how the content of the will could be protected in electronic wills. He noted verification could be done with a thumbprint or something else for the electronic signature.
Mr. Alonso stated the proposed amendments set forth that there had to be an electronic record that was reliable and unchangeable. Of course, a hard copy could be produced, but the electronic record was required to be unalterable, and the biometric authentication would go to the signature of the testator that could be in several formats. He noted that provision was similar to the proposal in the electronic gaming bill. He stated among the possibilities were:
· A thumb print;
· A palm print;
· Facial recognition;
· Retinal scans; and
· Digitized signatures.
He stressed, in addition to those means of signature authentication, the provision included the requirement for an unalterable record to be placed with a custodian in the state of Nevada who would hold and keep safe that record. Chairman Oceguera concurred and noted several bills heard during the legislative session had included provisions for electronic authorization and identification. He observed he could not see much difference between what was proposed in S.B. 49 and a will that was written out on a napkin.
Commissioner Ashworth asked if the bill allowed electronic wills to be filed with the County Clerk’s office prior to the death of the testator. Mr. Alonso stated S.B. 33 did not make that provision. The amendments to the bill stated, “An electronic will would be valid and must meet the requirements of this section. The system employed for evidencing the record of an electronic will must, (a) reliably establish the testator as the party signing the record and either the testator or an alternative custodian designated by the testator must have control of the record.” Mr. Alonso stated that provision might allow the testator to designate the probate administrator or the court as the custodian of the record; or an executor, executrix, or administrator, in the state of Nevada to hold onto the record.
Mr. Alonso noted current practice was for attorneys to hold attested or other wills in their safe for safekeeping. Mr. Alonso continued to read from the proposed amendment.
The system employed for evidencing the record of the electronic will reliably establishes the testator is the party signing it, if the record contains the electronic signature of the testator, which includes one or more of the authentication characteristics of the testator.
A person is deemed to have control of the record if the record is created and stored in such a manner that, (a) a single authoritative copy of the record exists, which is uniquely identifiable, and unalterable, and (b) the authoritative copy identifies the person asserting control as (1) the testator, or (2) an alternative custodian designated by the testator, and (c) the authoritative copy is communicated to and maintained by a custodian, who may be the testator, or designated by the testator.
Mr. Alonso stated the amendment to S.B. 33 provided for an electronic record that was unique and unalterable that would be available upon the testator’s death to submit in hard copy, as well as an electronic copy to the court for admission to probate.
Mr. Ashworth stated the amendment dealt with both the content of the document and the signature, but had nothing to do with the mental capacity of the individual making their last will and testament or his capacity to execute the document. Establishment of mental capacity was one requirement when using the self-proving affidavit in Nevada. The individual that executed the self-proving affidavit had to state they signed the document in the presence of the testator, the testator appeared to be over the age of 18 and of sound mind and memory. He asked how that could be accomplished with an electronic will.
Mr. John Sande, representing Jones Vargas, replied he had a background in probate law since 1974. One of his cases was the estate of William Harrah, and he regularly assisted in estate planning. He commented, regarding the question, there were will provisions requiring two witnesses to sign self-proving affidavits. He noted those were typically signed in an office, and two people within in the office were brought in. The testator would state, “Yes, this is my last will and testament.” But, the preferred method most commonly used of creating documents was to create an intervivos trust to avoid probate. The only requirement for an intervivos trust was that it be signed. All assets were included in an intervivos trust. The idea that a will was so important that it must be witnessed was archaic.
Mr. Alonso referred to Exhibit C, page 8, where Section 2-205 of the Uniform Probate Code stated that in attested wills, the requirement of disinterested witnesses “has not succeeded in preventing fraud and undue influence and in most cases of undue influence, the influencer was careful not to sign as a witness, but procured a disinterested witness.” Mr. Alonso stated the electronic method was no more dangerous than the holographic form or the attested form of wills.
Commissioner Ashworth asked why another method was needed. He asked what was wrong with current practices. Mr. Alonso replied there was nothing wrong with current procedures, and the bill simply offered an additional new method.
Mr. Alonso noted S.B. 49 mirrored the Uniform Electronic Transactions Act (UETA) that was modeled on the federal act enabling states to pass laws to allow electronic commerce. He opined the appetite was growing for such an option, and it could be used as safely or safer than current methods of filing a will.
Chairman Oceguera concluded testimony on the bills and noted the Legal Division of the Legislative Counsel Bureau had indicated the proposed amendment language would need further work before it could be added to the bill. He asked if Mr. Alonso would make himself available, and Mr. Alonso stated he would. Mr. Alonso added he would like to have Mr. Woodhead present and that Mr. Woodhead would be available on May 7, 2001. The Chair asked him to make arrangements with legal staff.
Chairman Oceguera noted Assemblywoman Buckley had some concerns regarding S.B. 49. Ms. Buckley stated her concern was to ensure that the consumer protections in the “E-signature” act were not superseded by UETA.
Ms. Buckley explained she had been in e-mail communication in the previous three days with the National Consumer Law Center, the Consumers Union, and a consumer law attorney. She had forwarded all correspondence to the legal counsel. She added numerous unsuccessful attempts had been made to reach Mr. Daykin through a variety of methods. She noted the record did not include an e-mail address for him. Mr. Daykin replied, because of restrictions on handling legislative matters, he did not have his computer hooked up to e-mail. He apologized if he seemed to be unavailable and added he had received no messages.
Ms. Buckley stated there was considerable debate as to the exact language needed to ensure that consumer protections were not superseded. She presented some language submitted to her by the National Consumer Law Center (Exhibit E) to the subcommittee. She noted the provision in her suggested amendment to S.B. 49 would ensure those consumer protections.
Chairman Oceguera asked if Ms. Buckley had discussed her proposed language with the Attorney General’s Office, and Ms. Buckley replied affirmatively. The Chair asked for clarification that the Attorney General’s Office supported the amendment. Ms. Buckley stated the Attorney General’s Office had agreed, but their wording might not be as precise as that proposed in Exhibit E. She had been ensured that the intent was identical, and they supported the amendment.
Chairman Oceguera clarified the amendment language in Exhibit E would add some wording from UETA to the current bill.
Ms. Kathleen Delaney, representing the Attorney General’s Office and speaking from Las Vegas, concurred that her office had seen all the e-mails that had transpired and was in support of the shorter amendment.
The Chair noted Assemblywoman Angle had expressed concerns prior to the hearing, and she responded all of her concerns had been addressed. The Chair was in agreement with the Exhibit E amendment.
Mr. Daykin stated his only concern with Exhibit E, apart from the awkwardness of the wording, was with the inclusion of a reference to subsections (d) and (e) of Section 7001 of the United States Code (U.S.C.). He added subsection (c) of the “e-sign” act was headed “Consumer Disclosure.” Subsections (d) and (e) dealt respectively with retention of contracts and accuracy and ability to retain contracts. Both of those topics were distinct from particular consumer concerns and were already covered extensively in the uniform act.
Mr. Daykin stated one problem that might be of concern to a consumer was in subsection (e) of the federal statute, which stated, “the enforceability of an electronic record of such a contract, may be denied . . . if the electronic record is not in a form capable of being retained and accurately reproduced for later reference by all parties or persons entitled to retain the contract or other record.” He explained, if something was received from the other party of a commercial contract in such a way, it could not be retained; however, the UETA included a provision in Section 28 specifying that the requirement of retention of a record was satisfied if the information was in a form that remained accessible for later reference. He explained that related to “in respect with any person.”
Mr. Daykin stated Section 24 of the UETA stated, “An electronic record requires the capability of retention” and added, “an electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record.” With those precautions in the UETA, the provision of “e-sign” as it pertained specifically to consumers was covered. Since those two subsections contained so much other material that tied to other sections of the UETA, to say those would not be modified would leave a number of potentials for conflict within the act.
Mr. Daykin stated if subsection (c) of the UETA was preserved, it would preserve all of the consumer protections.
Ms. Buckley stated the topic was covered in testimony she had received from the Attorney General in Massachusetts. She added the material got fairly technical, but there were a couple of points she would read for clarification. She explained, in Massachusetts, they were suggesting further consumer protections because, if someone did not receive a contract or notice and no one had a copy of a contract, those were major changes in the legal system that could lead to some dire results. She read from the Massachusetts correspondence:
Notwithstanding in their UETA, the legal effect of the validity or enforceability of electronic records of such contract may be denied if such electronic record is not available or is not in a form capable of being retained and accurately reproduced for the parties.
Mr. Daykin rebutted those provisions were already contained in the UETA. Ms. Buckley stated the language in the UETA was not as clear as the federal “e-signature” act. She stated the language of S.B. 49 seemed to say “inhibits the ability . . .” and asked if that was the UETA language. Mr. Daykin replied in the affirmative.
Ms. Buckley asked if Mr. Daykin had read either the North Carolina or the Massachusetts version of UETA. She noted they had been cited as the two state acts that had adopted UETA with the most consumer protections. Mr. Daykin replied he had not read those. He offered to examine the two state acts, but his concern was that, if Nevada simply did what was set out in Exhibit E, the proposed Buckley amendment to S.B. 49 would become a bill rife with internal contradictions.
Mr. Daykin referred to Exhibit E which stated, “it will authorize electronic delivery of any notice of the type described in 15 U.S.C. Section 7003(b)” and explained that was exactly the language set out in detail in the bill.
Ms. Buckley suggested that if the subcommittee was satisfied with the direction of the rest of Exhibit E, and if it was in general agreement that there should be consumer protections without creating the internal conflicts, the interested parties could be joined in an e-mail conference to craft precise language that would accomplish the goal. The Chair concurred. Mr. Daykin offered to participate, noting he had the capability of sending and receiving e-mail through the Legislative Counsel Bureau.
Mr. Daykin requested copies of the UETA language from North Carolina and Massachusetts in the meantime. He noted whenever language began with “no provision is intended to limit, modify . . . ,” it was desirable to craft the language without the use of the negative.
Ms. Buckley offered instead to join a conference call on the issues.
Commissioner Ashworth stated he was confused in regard to the discussions of the hearing. He opined the hearing was for the purpose of review of S.B. 33 as it stood in the first reprint, answer any questions, and then review S.B. 49, first reprint. He commented he did not have, nor had he received over the past month, any amendments to S.B. 33 in regard to the electronic act. He asked why sponsors of the legislation had never contacted the Probate Committee.
Commissioner Ashworth stated if the amendment in Exhibit E was made to S.B. 33, the bill would have to be returned to the Senate, and, if the Senate did not concur in the amendment because of the electronic provisions, they could kill the entire bill.
Chairman Oceguera asked Mr. Alonso to explain why the amendment was not reviewed in the Senate. Mr. Alonso explained the issue was not brought forth in the Senate because the sponsors had not known about the UETA until after S.B. 33 had passed out of the Senate. After speaking with Chairman James of the Senate Committee on Judiciary, he had indicated he would like the bill processed out the Senate, and he would concur with the amendment on the Assembly side. Mr. Alonso had spoken with Chairman Anderson of the Assembly Committee on Judiciary, and he had stated the amendment could be brought forward. The UETA was enacted in February 2001.
Chairman Oceguera explained the subcommittee had not specifically accepted the amendment language to S.B. 33 presented by Mr. Alonso, but the subcommittee had agreed to adding some language that allowed for electronic wills.
On S.B. 49 the subcommittee made no changes except for adding some portion of language from the “e-sign” act to provide consumer protections. Commissioner Ashworth stated he would like to see the amendment to S.B. 33 and opined, with the amendment to that bill, an amendment would be needed to S.B. 49 because of the exclusionary language. He offered to participate in the further discussion of amendments. The Chair stated he did not think that was the case.
Mr. Daykin stated, referring to page 3, line 3, of S.B. 49, that language would not be changed at all because the bill would still say, “it does not apply to any transaction to the extent the transaction is governed by a law governing the creation and execution of wills, codicils, or testamentary trusts.” S.B. 33 would amend Title 12 and parts of Title 13 that were similar to Title 12, which would be the law governing the creation and execution of wills, codicils, and testamentary trusts. The only thing to be dropped from S.B. 49 would be Section 20, subsection 2(c), which would assimilate trusts into wills that were addressed otherwise in S.B. 33.
Mr. Daykin stated if the language in S.B. 33 was settled, S.B. 49 would not affect it. Commissioner Ashworth stated he understood that S.B. 49 dealt with other items, and an electronic will under S.B. 33 would be a bill in itself and have no effect on S.B. 49.
Chairman Oceguera confirmed that Mr. Alonso would work with legal staff on changes to the amendments and requested him to work closely with Commissioner Ashworth.
ASSEMBLYWOMAN BUCKLEY MOVED TO RECOMMEND TO THE FULL COMMITTEE, AN AMEND AND DO PASS ON S.B. 33 WITH THE KNOWLEDGE THAT SPECIFIC AMENDMENT LANGUAGE WAS STILL BEING WORKED ON.
ASSEMBLYWOMAN ANGLE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
* * * * * * * *
ASSEMBLYWOMAN BUCKLEY MOVED TO RECOMMEND TO THE FULL COMMITTEE, AN AMEND AND DO PASS TO S.B. 49 WITH MR. DAYKIN AND ASSEMBLYWOMAN BUCKLEY WORKING ON PROPER “E-SIGN” LANGUAGE.
ASSEMBLYWOMAN ANGLE SECONDED THE MOTION.
THE MOTION PASSED UNANIMOUSLY.
With no further business before the subcommittee, the Chair adjourned the meeting at 2:03 p.m.
Cindy Clampitt
Committee Secretary
APPROVED BY:
Assemblyman John Oceguera, Chairman
DATE: