[Federal Register Volume 67, Number 198 (Friday, October 11, 2002)]
[Notices]
[Pages 63379-63381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-25942]


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DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration

Docket No. 010222048-2229-04


The Wills, Codicils, and Testamentary Trusts Exception to the 
Electronic Signatures in Global and National Commerce Act

AGENCY: National Telecommunications and Information Administration 
(NTIA), U.S. Department of Commerce

ACTION: Notice, Request For Comments

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SUMMARY: Section 101 of the Electronic Signatures in Global and 
National Commerce Act, Pub. L. No. 106-229, codified at 15 U.S.C. 
Sec. Sec.  7001 et seq. (``ESIGN'' or ``the Act''), preserves the legal 
effect, validity, and enforceability of signatures and contracts 
relating to electronic transactions and electronic signatures used in 
the formation of electronic contracts. 15 U.S.C. Sec.  7001(a). Section 
103 (a) and (b) of the Act, however, provides that the provisions of 
section 101 do not apply to contracts and records governed by statutes 
and regulations regarding court documents; probate and domestic law 
matters; certain provisions of state uniform commercial codes; utility 
service cancellations, real property foreclosure and defaults; 
insurance benefits cancellations; product recall notices; and documents 
related to hazardous materials and dangerous substances. 15 U.S.C. 
Sec. Sec.  7003(a),(b). Section 103 of the Act also requires the 
Secretary of Commerce, through the Assistant Secretary for 
Communications and Information, to review the operation of these 
exceptions to evaluate whether they continue to be necessary for 
consumer protection, and to make recommendations to Congress based on 
this evaluation. 15 U.S.C. Sec.  7003(c)(1). This Notice is intended to 
solicit comments from interested parties for purposes of this 
evaluation, specifically

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on the wills, codicils, and testamentary trusts exception to the ESIGN 
Act. See 15 U.S.C. Sec.  7003(a)(1). NTIA will publish separate notices 
requesting comment on the other exceptions listed in section 103 of the 
ESIGN Act.\1\
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    \1\ Comments submitted in response to Federal Register notices 
requesting comment on the other exceptions to ESIGN will be 
considered as part of the same section 103 evaluation and not as a 
separate review of the Act. NTIA is also evaluating the court 
documents exception to ESIGN. See 67 Fed.Reg. 56277 (Sept. 3, 2002).

DATES: Written comments and papers are requested to be submitted on or 
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before December 10, 2002.

ADDRESSES: Written comments should be submitted to Josephine Scarlett, 
National Telecommunications and Information Administration, 14th Street 
and Constitution Avenue, N.W., Washington, DC 20230. Paper submissions 
should include a three and one-half inch computer diskette in HTML, 
ASCII, Word, or WordPerfect format (please specify version). Diskettes 
should be labeled with the name and organizational affiliation of the 
filer, and the name of the word processing program used to create the 
document. In the alternative, comments may be submitted electronically 
to the following electronic mail address: [email protected]. Comments submitted via electronic mail also should 
be submitted in one or more of the formats specified above.

FOR FURTHER INFORMATION CONTACT: For questions about this request for 
comment, contact: Josephine Scarlett, Attorney, Office of the Chief 
Counsel, NTIA, 14th Street and Constitution Avenue, N.W., Washington, 
DC 20230, telephone (202) 482-1816 or electronic mail: 
[email protected]. Media inquiries should be directed to the 
Office of Public Affairs, National Telecommunications and Information 
Administration, at (202) 482-7002.

SUPPLEMENTARY INFORMATION:

Background: Electronic Signatures in Global and National Commerce Act

    Congress enacted the Electronic Signatures in Global and National 
Commerce Act, Pub. L. No. 106-229, 114 Stat. 464 (2000), to facilitate 
the use of electronic records and signatures in interstate and foreign 
commerce and to remove uncertainty about the validity of contracts 
entered into electronically. Section 101 requires, among other things, 
that electronic signatures, contracts, and records be given legal 
effect, validity, and enforceability. Sections 103(a) and (b) of the 
Act provides that the requirements of section 101 shall not apply to 
contracts and records governed by statutes and regulations regarding: 
court documents and records, probate and domestic law matters; 
documents executed under certain provisions of state commercial law; 
consumer law covering utility services, real property foreclosures and 
defaults, and insurance benefit notices; product recall notices; and 
hazardous materials documents.
    The statutory language providing for an exception to section 101 of 
ESIGN for wills, codicils and testamentary trusts is found in section 
103(a) of the Act:

Sec. 103. [15 U.S.C. 7003] 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 State statute, regulation, or other rule of law governing the 
creation and execution of wills, codicils, or testamentary trusts;
    * * * *
    The statutory language requiring the Assistant Secretary for 
Communications and Information to submit a report to Congress on the 
results of the evaluation of the section 103 exceptions to the ESIGN 
Act is found in section 103(c)(1) of the Act as set forth below.

(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 Congress on the results of such evaluation.

Wills, Codicils, and Testamentary Trusts

    Wills, codicils, and testamentary trusts are documents used by an 
owner (donor or testator) of real or personal property to transfer that 
property from the testator to other persons or entities (beneficiaries) 
after the death of the testator. State legislatures and state courts 
have primary jurisdiction for establishing procedures and rules that 
govern wills, codicils, and testamentary trusts when there is some 
relationship between the state, and either the property or the 
testator. The ESIGN exception for wills, codicils, and testamentary 
trusts means that when either of these documents is executed 
electronically or using an electronic signature, the document is not 
required to be accorded the same legal validity or effect as a paper 
document. Section 102(a)(1) of ESIGN provides that the states may adopt 
electronic transactions statutes, however, that give the state 
exclusive jurisdiction with regard to electronic transactions that 
occur within the state. See 15 U.S.C. Sec.  7002(a). This section 
allows states to modify, limit, or supersede the application of ESIGN 
to electronic transactions that occur within the state law by adopting 
either the Uniform Electronic Transactions Act (known as UETA) as 
approved and recommended for enactment by the National Conference of 
Commissioners on Uniform State Laws (NCCUSL) or a statute that 
specifies an alternative procedure for the use and acceptance of 
electronic signatures, which complies with the provisions of ESIGN. See 
id.
    States have used section 102(a)(1) of ESIGN to adopt electronic 
transactions laws that exclude state-exclusive areas from the 
application of ESIGN or the state's electronic transactions law. 
Approximately thirty-nine states have adopted the version of UETA 
recommended by NCCUSL or their own version of UETA. See National 
Conference of Commissioners on Uniform State Laws at http://www.nccusl.org/nccusl/LegislativeByState.pdf. The legislative history 
of UETA enunciated by the NCCUSL provides a rationale for excluding 
certain types of documents from the scope of the law. Id. According to 
the legislative notes of the Drafting Committee for UETA, some 
exclusions were warranted while other areas should not be omitted from 
the state UETA laws. See id. at 13-16. The comments on the UETA final 
draft states that the exclusion of wills, codicils, and testamentary 
trusts is largely salutary given the unilateral context in which the 
records are created and the unlikely use of such records in 
``transactions'' as defined by UETA. Id. at 14, n. 4. The notes provide 
that an electronic transaction is an interaction between two or more 
persons, while a document such as a will, trust, or health care power 
of attorney evidences a unilateral act that is not covered by the Act. 
Id. at 13.
    The majority of the states that have passed UETA laws have 
expressly excluded wills, codicils, testamentary trusts from the 
operation of the state electronic transactions laws. Id. The absence of 
an exception in a state's UETA law for wills, codicils, and 
testamentary trusts, however, does not automatically make these 
documents subject to that law. If the underlying substantive law 
requires a paper writing

[[Page 63381]]

or prohibits the use of an electronic signature for the formation of 
these documents, electronic documents for wills, codicils, and 
testamentary trusts would not be legally valid. For example, the 
Maryland Code provides that every will shall be in writing, signed by 
the testator, attested to and signed by two or more credible witnesses 
in the presence of the testator. Md. Code Ann., Estates and Trusts, 
Sec.  4-102. Although the law does not expressly preclude the use of 
electronic signatures or documents, the Maryland Rules do not consider 
a photocopy or facsimile copy of a will or codicil as an original 
document for purposes of filing with the Register of Wills. See Md. 
Code Ann., Estates and Trusts, Rule 6-108 (b). Alternatively, another 
state's substantive law governing wills and probate matters may allow 
documents to be formed in an electronic format or established using an 
electronic signature.
    The legislative history of the ESIGN Act does not indicate the 
intent of the drafters in making an exception for wills, codicils, and 
testamentary trusts. However, the personal nature of the information 
disclosed in these documents and the relative privacy interests of the 
donor and beneficiaries may raise issues that do not arise in legal 
proceedings involving commercial or other civil matters. Information 
regarding changes in state law to allow electronic filings or access to 
documents pertaining to testamentary documents would assist in the 
evaluation of whether consumers would be adequately protected if the 
wills, codicils, and testamentary trusts exception to ESIGN is 
eliminated from the Act.

The ESIGN Section 103 Evaluation

    The ESIGN Act directs the Assistant Secretary of Communications and 
Information to conduct an evaluation of the exceptions set out in 
section 103 of the Act to determine whether the exceptions continue to 
be necessary for the protection of consumers, and to submit a report to 
Congress on the results of the evaluation no later than June 30, 2003. 
The Assistant Secretary for Communications and Information is the chief 
administrator of NTIA. As the President's principal advisor on 
telecommunications policies pertaining to the Nation's economic and 
technological advancement, NTIA is the executive branch agency 
responsible for developing and articulating domestic and international 
telecommunications policy.
    The ESIGN section 103 evaluation of the wills, codicils, and 
testamentary trusts exception is intended to evaluate the current 
status of the law and procedure regarding this issue, in preparation 
for a report to Congress on whether this exception remains necessary to 
protect consumers. This evaluation is not a review or analysis of laws 
relating to these documents for the purpose of recommending that 
Congress draft legislation or propose changes to those laws but to 
advise Congress of the current state of law, practice, and procedure 
regarding this issue. Comments filed in response to this Notice should 
not be considered to have a connection with or impact on ongoing 
specific federal and state procedures or rulemaking proceedings 
concerning wills, codicils, or testamentary trusts.

Invitation to Comment

    NTIA requests that all interested parties submit written comment on 
any issue of fact, law, or policy that may assist in the evaluation 
required by section 103(c). We invite comment from all parties that may 
be affected by the removal of the wills, codicils, and testamentary 
trusts exception from the ESIGN Act including, but not limited to, 
state agencies and organizations, national and state bar associations, 
consumer advocates, and estate law practitioners. The comments 
submitted will assist NTIA in evaluating the potential impact of the 
removal of the wills, codicils, and testamentary trusts exception from 
ESIGN on state estate law, and state electronic transactions laws. The 
following questions are intended to provide guidance as to the specific 
subject areas to be examined as a part of the evaluation. Commenters 
are invited to discuss any relevant issue, regardless of whether it is 
identified below.
    1. Describe state laws, if any, that allow for the creation, 
access, filing or probate wills, codicils, or testamentary trusts are 
by electronic means, including video or audio versions.
    2. Discuss how statutes that require written documents for trusts, 
wills, and testamentary trusts may be affected if the exception is 
eliminated from the ESIGN Act.
    3. State how consumers would be affected if the exception is 
eliminated from the ESIGN Act. Describe the laws or methods that would 
be available for consumer protection if the exception for wills, 
codicils, and testamentary trusts is eliminated from the Act.
    4. Describe any state or federal law, other than ESIGN or UETA, 
that requires wills, codicils, and testamentary trusts to be excluded 
from the operation of ESIGN or the state uniform electronic 
transactions law.
    5. Describe uniform laws that allow wills, codicils, or 
testamentary trusts to be created, authenticated, filed, or admitted to 
probate in an electronic format or using an electronic signature.
    6. Discuss any unique issues surrounding the execution of wills, 
codicils, and testamentary trusts that may be considered in determining 
whether these documents may be processed in an electronic format. This 
list is not exhaustive and any other issue relevant to the execution of 
wills, codicils, or testamentary trusts may be discussed.
    a. privacy and security of information contained in the will;
    b. authentication of signatures for testator and witnesses;
    c. retention and storage of electronic documents;
    d. software compatibility and development; and
    e. the impact of advances in technology during the lifetime of the 
donor on the probate process.
    7. Discuss any other documents related to the probate, filing, or 
execution of wills, codicils and testamentary trusts that courts accept 
in electronic form (including but not limited to, letters of 
administration, notice of appointment of personal representative, 
notice of publication, personal notice to heirs).
    8. Discuss whether any uniform laws governing wills, codicils, or 
testamentary trusts have been adopted and the impact on these laws if 
the ESIGN exception for these documents is eliminated (e.g., the 
Uniform Probate Code, the Uniform Intestacy, Wills, and Donative 
Transfers Act).
    9. Provide a description of any instance in which wills, codicils, 
or testamentary trusts have been executed in an electronic format. 
Discuss whether there are plans to implement procedures for the on-line 
execution of such documents.
    Please provide copies of studies, reports, opinions, research or 
other empirical data referenced in the responses.

    Dated: October 7, 2002.
Kathy D. Smith,
Chief Counsel, National Telecommunications and Information 
Administration.
[FR Doc. 02-25942 Filed 10-10-02; 8:45 am]
BILLING CODE 3510-60-S