Legislature(2003 - 2004)

01/21/2004 01:02 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 285 - ELECTRONIC TRANSACTIONS & SIGNATURES                                                                                 
                                                                                                                                
Number 0267                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  announced that the  final order of  business would                                                               
be HOUSE  BILL NO. 285,  "An Act adopting the  Uniform Electronic                                                               
Transactions   Act;  repealing   certain  statutes   relating  to                                                               
electronic records and electronic  signatures; amending Rule 402,                                                               
Alaska Rules of  Evidence; and providing for  an effective date."                                                               
[In members packets was a  proposed committee substitute (CS) for                                                               
HB 285, Version 23-LS0829\D, Bannister, 10/6/03.]                                                                               
                                                                                                                                
CHAIR McGUIRE  noted that the Uniform  Electronic Transaction Act                                                               
(UETA) was  created by the  National Conference  of Commissioners                                                               
on Uniform  State Laws  (NCCUSL) and  has been  in the  works for                                                               
many  years.   She mentioned  that uniform  Acts attempt  to make                                                               
state laws uniform, and that the  UETA is a reflection of current                                                               
times.   Much  more  commerce and  other  interactions occur  via                                                               
electronic  means  nowadays,  and  the  UETA  is  a  uniform  law                                                               
intended  to  provide  a  framework   for  any  forthcoming  laws                                                               
promulgated  by states  to  govern  the electronic-commerce  era.                                                               
The objective of  the UETA is to establish  the legal equivalence                                                               
of  electronic records  and signatures  with  paper writings  and                                                               
manually-signed  signatures,  removing   barriers  to  electronic                                                               
commerce so that  it can be conducted legally,  more quickly, and                                                               
in a way that all will understand.                                                                                              
                                                                                                                                
CHAIR McGUIRE added:                                                                                                            
                                                                                                                                
     There's a  very limited but important  objective:  that                                                                    
     an   electronic  record   of  a   transaction  is   the                                                                    
     equivalent, in  fact, of  a paper  record, and  that an                                                                    
     electronic  signature  will  be given  the  same  legal                                                                    
     effect - whatever that may  be - as a manual signature.                                                                    
     ... [The] UETA is not an  attempt to create a whole new                                                                    
     system of  legal rules for the  electronic marketplace;                                                                    
     it doesn't change  any of the substantive  rules of law                                                                    
     that currently apply - i.e.  contract law or agency law                                                                    
     - but it's an effort  at conforming electronic means to                                                                    
     those already-positioned  sets of laws.   Many states -                                                                    
     45,  in fact,  to  date -  have  already adopted  [the]                                                                    
     UETA, so we're a little  bit behind the power curve ...                                                                    
     due to the legislature being  very busy and focusing on                                                                    
     other things.  ... Alaska should  join the rest  of the                                                                    
     nation  in adopting  [the] UETA  as we  enter the  21st                                                                    
     century ....                                                                                                               
                                                                                                                                
CHAIR McGUIRE, in response to  a question, indicated a preference                                                               
for adopting  the proposed CS  as a work draft  before continuing                                                               
the discussion.                                                                                                                 
                                                                                                                                
Number 0594                                                                                                                     
                                                                                                                                
VANESSA  TONDINI, Staff  to Representative  Lesil McGuire,  House                                                               
Judiciary   Standing   Committee,   Alaska   State   Legislature,                                                               
explained that the only difference  between the original bill and                                                               
Version  D is  that Version  D corrects  a drafting  oversight by                                                               
inserting AS  45.02 - the  Uniform Commercial Code  (UCC) chapter                                                               
pertaining to  sales - within the  proposed Sec. 09.80.010(b)(2),                                                               
which is located  on page 1, lines 13-14.   By including AS 45.02                                                               
in the  "Scope" section of  the UETA,  it ensures that  UCC sales                                                               
and  lease  transactions  may   be  accomplished  via  electronic                                                               
transactions.                                                                                                                   
                                                                                                                                
Number 0649                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  moved to adopt  the proposed CS  for HB                                                               
285, Version 23-LS0829\D, Bannister,  10/6/03, as the work draft.                                                               
There being no objection, Version D was before the committee.                                                                   
                                                                                                                                
Number 0665                                                                                                                     
                                                                                                                                
ARTHUR   H.  PETERSON,   Commissioner,  National   Conference  of                                                               
Commissioners on  Uniform State Laws (NCCUSL),  assisted with the                                                               
presentation of HB 285.  He  said that 45 states have enacted the                                                               
UETA,  which is  a  product of  the [NCCUSL].    He provided  the                                                               
committee  with written  information about  the NCCUSL,  which is                                                               
now in  its 113th year,  and the  UETA, which was  promulgated by                                                               
the NCCUSL in 1999.  He went on to say:                                                                                         
                                                                                                                                
     Every  single product  of the  [NCCUSL] takes  at least                                                                    
     two  years;  it  has  to have  two  floor  readings  in                                                                    
     separate  years.   Between the  annual meetings  of the                                                                    
     [NCCUSL],  drafting  committees  are  working,  and  at                                                                    
     those  committee meetings,  there will  usually be  the                                                                    
     advice from  various people in the  field, whether it's                                                                    
     the banking industry  or the poverty law  people or the                                                                    
     technological people  for electronic transactions.   We                                                                    
     get advice  across the  board, and  we have  members on                                                                    
     the committees from across the  board.  The [NCCUSL] is                                                                    
     made  up of  attorneys in  private practice  and public                                                                    
     practice;  many,  many   legislators  ...;  many,  many                                                                    
     judges - both state and  federal ...; and a good number                                                                    
     of law professors.                                                                                                         
                                                                                                                                
     So the product  you have before you  is the culmination                                                                    
     of a great deal  of research; extensive experience; and                                                                    
     a lot  of analysis,  debate, drafting,  and redrafting.                                                                    
     [The]  UETA is  the first  comprehensive state  law for                                                                    
     the  electronic-commerce era.   It  establishes default                                                                    
     rules ... [but] it is not a  whole new body of law - it                                                                    
     simply makes clear  that the rules that  apply to paper                                                                    
     transactions   and   paper    signatures   and   manual                                                                    
     signatures  apply  in this  electronics  era.   And  it                                                                    
     doesn't compel  the use of electronic  transactions, it                                                                    
     simply provides  that since people  are now  using them                                                                    
     as  a major,  major  means of  conducting business,  we                                                                    
     have to deal  with it in the law; we  can't just let it                                                                    
     drift.  So, that's what this bill does.                                                                                    
                                                                                                                                
Number 0864                                                                                                                     
                                                                                                                                
MR. PETERSON                                                                                                                    
                                                                                                                                
     If  the  state  doesn't  adopt  it,  federal  law  will                                                                    
     govern.   There's the federal Electronic  Signatures in                                                                    
     Global   and   National    Commerce   Act,   which   is                                                                    
     affectionately   called  "E-Sign,"   and  there   is  a                                                                    
     specific  provision  in that  Act  that  says that  ...                                                                    
     Congress  likes what  the [NCCUSL]  did in  [the] UETA,                                                                    
     and states, "you  ought to enact that  in its entirety,                                                                    
     and if you don't, this  federal law is going to apply."                                                                    
     So already 45  states have enacted it;  it's pending in                                                                    
     Alaska, and I was told  on the phone yesterday from the                                                                    
     Chicago staff  headquarters office that it  is about to                                                                    
     be introduced in two more states ....                                                                                      
                                                                                                                                
     ... Proposed  AS 09.80.040  is the  heart of  the bill,                                                                    
     and  that's  on  page  3 [lines  19-26];  four  simple,                                                                    
     little one-sentence provisions:   a record or signature                                                                    
     may  not  be  denied  legal  effect  or  enforceability                                                                    
     solely  because it  is in  electronic form  - and  some                                                                    
     corollaries  to  that  provision.   All  of  the  other                                                                    
      provisions in the Act develop those four basic rules                                                                      
     that you see in that section.                                                                                              
                                                                                                                                
MR. PETERSON  offered to pass  any of the  committee's unanswered                                                               
questions on  to Patricia  Brumfield Fry, the  Chair of  the UETA                                                               
drafting  committee, adding  that the  committee packets  contain                                                               
[articles] written  by Ms. Fry  explaining the UETA and  the need                                                               
for it.   He reiterated that "the feds" want  states to adopt the                                                               
UETA  in its  entirety, or  the  result will  be that  electronic                                                               
transactions will  be governed by the  federal law - E-Sign.   He                                                               
offered  that he  knows of  no issues  lurking in  the UETA  that                                                               
might cause difficulties later.                                                                                                 
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  whether  any  courts have  found                                                               
problems with the UETA.                                                                                                         
                                                                                                                                
MR. PETERSON  said he was not  aware of any such,  and offered to                                                               
pass  that question  on  to  Ms. Fry.    In  response to  further                                                               
questions, he said  that he is not sure why  the states that have                                                               
not adopted  the UETA have  not yet  done so, but  predicted that                                                               
all  those states  would  introduce  a UETA  bill  this year  and                                                               
perhaps even enact it.                                                                                                          
                                                                                                                                
Number 1212                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG referred  to Ms.  Fry's article  titled                                                               
"Federal Preemption  and Electronic Commerce," and  noted that it                                                               
says that  any state  law enacted after  E-Sign has  been enacted                                                               
must refer  specifically to that  federal legislation.   He asked                                                               
whether HB 285 does so.                                                                                                         
                                                                                                                                
MR.  PETERSON said  it does,  adding  that HB  285 satisfies  the                                                               
federal law.                                                                                                                    
                                                                                                                                
CHAIR  McGUIRE remarked  that  that  is one  of  the benefits  of                                                               
states  enacting  uniform  laws   regarding  certain  topics;  it                                                               
enables  states to  maintain  state law  as  opposed to  becoming                                                               
subject to federal law.                                                                                                         
                                                                                                                                
MR. PETERSON concurred.                                                                                                         
                                                                                                                                
REPRESENTATIVE  GARA remarked  that the  NCCUSL often  deals with                                                               
complex  issues  and  sometimes  ends  up  picking  a  particular                                                               
approach as  its final  product as  opposed to  any of  the other                                                               
approaches discussed  during its deliberative process.   He asked                                                               
whether any  other approaches were proffered  during the NCCUSL's                                                               
deliberations regarding the UETA.                                                                                               
                                                                                                                                
MR. PETERSON  said that although  there was a lot  of discussion,                                                               
he  did not  recall  that  there were  any  hotly debated  issues                                                               
during the formation  of the UETA, such as there  were during the                                                               
formation of  the Uniform  Computer Information  Transactions Act                                                               
(UCITA), which the NCCUSL's Alaska  delegation voted against.  To                                                               
clarify, he said  that the Alaska delegation of  the NCCUSL voted                                                               
in  favor  of  the UETA.    He  offered  to  check with  Ms.  Fry                                                               
regarding  whether  any  alternative  approaches  were  discussed                                                               
during the formation of the UETA and, if so, what those were.                                                                   
                                                                                                                                
REPRESENTATIVE  GARA  relayed  that  his major  concern  is  that                                                               
personal coding could be stolen if  it is not required that [that                                                               
coding]  be crafted  carefully  enough.   He  said  he could  not                                                               
determine whether  language in the  bill stipulates  how detailed                                                               
personal coding must be.  "How  much can you assure us that we're                                                               
not passing something that will  result in the ability for people                                                               
to commit fraud against people who sign up?" he asked.                                                                          
                                                                                                                                
Number 1444                                                                                                                     
                                                                                                                                
MR. PETERSON  relayed that  he has  a lot of  faith, both  in the                                                               
people who  developed the  UETA and  in the  level of  debate and                                                               
discussion that occurred, that  Representative Gara's concern has                                                               
been addressed.  He added:                                                                                                      
                                                                                                                                
     That  type   of  question  is   one  that   indeed  was                                                                    
     considered:  the  type of protections that  would be in                                                                    
     ... [the UETA].  Certainly  the [NCCUSL] would not want                                                                    
     to do anything that would  [leave] people open to fraud                                                                    
     or  encourage them  or induce  them  into a  fraudulent                                                                    
     situation.    And  the  fact  that  Congress  has  also                                                                    
     enacted  -  in  E-Sign   -  the  provision  that  says,                                                                    
     "States, you ought to adopt  [the] UETA," gives me some                                                                    
     comfort.  ... It's  certainly a  point that  would have                                                                    
     been considered,  analyzed, and  addressed by  a number                                                                    
     of very technologically sophisticated people.                                                                              
                                                                                                                                
MR. PETERSON offered to question Ms. Fry on that issue as well.                                                                 
                                                                                                                                
CHAIR  McGUIRE  referred  to  page  5, line  2,  and  noted  that                                                               
proposed AS  09.80.070 speaks  to the  effect of  a change  or an                                                               
error in the  record itself.  So although that  language is not a                                                               
complete answer  to the question  raised by  Representative Gara,                                                               
it does speak  to the types of errors in  transmission that could                                                               
occur.   In  terms  of  identity theft,  she  noted,  one of  the                                                               
advantages of the UETA is that it  does not take the place of any                                                               
current state laws  pertaining to identity theft and  fraud.  She                                                               
referred to  page 10,  proposed AS 09.80.150,  and noted  that it                                                               
speaks to acceptance and distribution  of electronic records by a                                                               
governmental agency.  She then  pointed out that [paragraph] (3),                                                               
lines  25-27  on page  10,  provides  that governmental  agencies                                                               
[may] set  out "control processes  and procedures  as appropriate                                                               
to   ensure   adequate  preservation,   disposition,   integrity,                                                               
security,   confidentiality,  and   auditability  of   electronic                                                               
records".                                                                                                                       
                                                                                                                                
CHAIR McGUIRE  surmised that the  UETA is a little  bit different                                                               
than some other uniform laws -  such as those dealing with policy                                                               
matters -  in that  it does not  involve highly  contested issues                                                               
which result in compromise legislation.   The UETA merely sets up                                                               
a framework  that will allow  electronic signatures to  be legal;                                                               
individual   agencies   and   businesses  that   use   electronic                                                               
signatures  will   still  be  allowed  to   establish  their  own                                                               
parameters regarding confidentiality.   She echoed Representative                                                               
Gara's request  for more information regarding  any controversies                                                               
that arose during the formation of the UETA.                                                                                    
                                                                                                                                
Number 1642                                                                                                                     
                                                                                                                                
MR. PETERSON detailed  some of the controversies  involved in the                                                               
formation of  the UCITA, and  assured the committee that  no such                                                               
controversies are inherent in the UETA.                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG  mentioned that the issue  of whether or                                                               
not  faxed  documents  will  be accepted  by  the  courts  raises                                                               
practical problems  for him as  a practicing lawyer.   He offered                                                               
his belief that there doesn't appear  to be any reason that faxed                                                               
documents shouldn't be accepted by  the courts.  He asked whether                                                               
HB 285 will require courts to accept faxed documents.                                                                           
                                                                                                                                
MR. PETERSON said that there is  no such express provision in the                                                               
bill, and  suggested that other  testifiers might be  better able                                                               
to address that issue.                                                                                                          
                                                                                                                                
REPRESENTATIVE  GRUENBERG  mentioned past  committee  discussions                                                               
regarding electronic warrants.                                                                                                  
                                                                                                                                
REPRESENTATIVE OGG  referred to proposed AS  09.80.150(a) on page                                                               
10  [lines 9-13],  and  noted  that it  says  [in  part]:   "each                                                               
government agency of this state  shall determine whether, and the                                                               
extent  to which,  the  agency will  send  and accept  electronic                                                               
records and electronic  signatures".  He offered  his belief that                                                               
under  that  language,  the  court   would  have  the  option  of                                                               
accepting faxed documents.                                                                                                      
                                                                                                                                
REPRESENTATIVE ANDERSON  asked Mr.  Peterson if  he knew  why the                                                               
states that have not yet adopted the UETA haven't done so.                                                                      
                                                                                                                                
MR. PETERSON  reiterated that he  did not  know why the  UETA has                                                               
not yet been adopted in those states.   He offered to ask Ms. Fry                                                               
for more information on that issue.                                                                                             
                                                                                                                                
Number 1809                                                                                                                     
                                                                                                                                
DAVID  JONES,  Chief  Assistant   Attorney  General  -  Statewide                                                               
Section  Supervisor,  Labor  and  State  Affairs  Section,  Civil                                                               
Division (Anchorage),  Department of  Law (DOL),  emphasized that                                                               
the  UETA  is simply  a  framework  that  gives legal  effect  to                                                               
electronic signatures and  records; it provides a means  to go to                                                               
court  and obtain  relief, if  necessary,  for transactions  that                                                               
were  conducted electronically.    It doesn't  require anyone  to                                                               
accept electronic records or signatures,  but provides a means of                                                               
enforcement  if both  parties to  a transaction  have voluntarily                                                               
conducted it  electronically.   The level  of security,  means of                                                               
giving notice,  and all  details that  guide the  transaction are                                                               
chosen by those parties.                                                                                                        
                                                                                                                                
MR.  JONES agreed  that the  bill wouldn't  directly address  the                                                               
concerns   raised  by   Representative  Gruenberg   about  faxing                                                               
documents to court.   Saying he shares the  frustration about the                                                               
courts' reluctance to  accept faxed documents, which  would be so                                                               
much faster, Mr.  Jones added that there seems to  be no rational                                                               
basis, now  that fax machines  work as well  as they do,  for not                                                               
accepting [such  documents].  He  specified that this  bill would                                                               
give  individual government  agencies  the  discretion to  decide                                                               
whether  to participate  in  electronic  transactions and  accept                                                               
electronic records.                                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG observed that  the courts have left this                                                               
to each  judicial district,  at the  very least,  if not  to each                                                               
judge;  sometimes  it varies  from  case  to case  whether  faxed                                                               
documents will be accepted.   This Act, national in scope, leaves                                                               
it  up to  each state  and each  governmental agency  within each                                                               
state.   Since [HB 285]  would leave  it up to  each governmental                                                               
agency,  he  said there  won't  be  any  uniformity, which  as  a                                                               
"consumer"  of the  court system  he finds  frustrating.   If the                                                               
point  has  been  reached with  electronic  commerce  that  these                                                               
should  be  accepted  unless  there  is a  good  reason  not  to,                                                               
Representative Gruenberg  suggested that an agency  should accept                                                               
such documents  unless it shows  good cause  for opting out.   He                                                               
requested feedback on this idea.                                                                                                
                                                                                                                                
MR. JONES  replied that  he shares the  frustration of  trying to                                                               
determine whether a  particular judge or court  will accept faxed                                                               
filings.  However, that's not a  concern this bill is designed to                                                               
address,  since governmental  agencies are  just one  category of                                                               
entities affected  by it.   Rather, the  bill is designed  to lay                                                               
the legal  foundation for electronic  transactions so  that those                                                               
who choose  to engage in such  transactions will have a  means of                                                               
enforcement  if   something  goes  wrong.     He  suggested  that                                                               
Representative  Gruenberg's specific  concern  would  have to  be                                                               
dealt with separately.                                                                                                          
                                                                                                                                
REPRESENTATIVE  GRUENBERG clarified  that  he  wasn't saying  the                                                               
bill  shouldn't be  adopted,  but was  looking  at one  provision                                                               
pointed  out by  Representative Ogg.   Representative  Gruenberg,                                                               
too, pointed out  that language on page 10,  lines 9-13, provides                                                               
that  each governmental  agency shall  determine whether  and the                                                               
extent to  which it will  send and accept electronic  records and                                                               
so forth;  he questioned the wisdom  of that, but said  he didn't                                                               
know enough  about it to offer  an amendment.  He  reiterated his                                                               
preference, at  least for  the agency he  deals with,  to require                                                               
[acceptance of  electronic transactions]  unless there is  a good                                                               
reason to the contrary.                                                                                                         
                                                                                                                                
Number 2079                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM said  he  shares Representative  Gruenberg's                                                               
concern.  He  asked whether Mr. Jones was  saying the legislation                                                               
opens the door  for any type of electronic signature  and that if                                                               
the  legislature desires  to restrict  it  as a  matter of  state                                                               
policy, it  would then  require all state  agencies -  in another                                                               
piece  of legislation  - to  accept certain  forms of  electronic                                                               
communication.                                                                                                                  
                                                                                                                                
MR. JONES answered  in the affirmative and said  it's a difficult                                                               
policy question  to address.   In further response,  he specified                                                               
that he  believes it  is good policy  to let  individual agencies                                                               
choose.   They have different  operations, needs,  and conditions                                                               
under which they  operate.  He cited examples  of different types                                                               
of  documents:    permanent  fund  dividend  (PFD)  applications,                                                               
warrants issued  through the court  system, court filings  by the                                                               
Department  of  Law,  and  timesheets and  leave  slips  used  by                                                               
governmental  agencies.     Emphasizing   the  wide   variety  of                                                               
operations conducted  by state agencies,  he said  it's difficult                                                               
to come  up with a  rule that applies  to all of  them concerning                                                               
the use of electronic records and signatures.                                                                                   
                                                                                                                                
CHAIR McGUIRE remarked to Representative Holm:                                                                                  
                                                                                                                                
     It   may  be   that  your   ideas  and   Representative                                                                    
     Gruenberg's are  just before their  time.  It  might be                                                                    
     that  ...  we  get  [the]   UETA  into  effect  in  the                                                                    
     framework  and  governmental  agencies can  begin  that                                                                    
     process   of   considering   how  they   would   accept                                                                    
     electronic information and the  types of structure that                                                                    
     would be in place, and  that, at some point, there does                                                                    
     need  to  be   a  policy  push  on  the   part  of  the                                                                    
     legislature and  so on.   But I would suspect  it would                                                                    
     come  with fiscal  notes ...  and  that agencies  would                                                                    
     certainly  want a  little help  from us  ... to  change                                                                    
     over some of the equipment that  they have in place.  I                                                                    
     don't know, but I think so.                                                                                                
                                                                                                                                
Number 2197                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM  explained  that   his  concern  related  to                                                               
documents in commerce,  rather than in the legal sense.   He said                                                               
he'd   like  to   rely  upon   a  certain   type  of   electronic                                                               
communication for copies  of checks, proof of  purchase, or proof                                                               
of receipt,  for example,  so that there  was less  concern about                                                               
losing something or  having to get it certified.   "In this case,                                                               
we could choose,  as contractors between each  other, to contract                                                               
that  we   would  accept  or   not  accept  different   types  of                                                               
communication,"  he  surmised,  noting  that  there  wouldn't  be                                                               
uniformity.                                                                                                                     
                                                                                                                                
CHAIR  McGUIRE  agreed  it  sets  up  a  framework,  rather  than                                                               
micromanaging the  details.  She  said that's one  challenge when                                                               
trying to put together a uniform  law that affects so many states                                                               
and entities.                                                                                                                   
                                                                                                                                
MR.  PETERSON explained  that  as a  general  policy, the  NCCUSL                                                               
tries  not to  get into  the  details of  any particular  state's                                                               
administrative [workings].  This Act,  as mentioned, tries to set                                                               
up the framework and set out certain basic rules.  He added:                                                                    
                                                                                                                                
     While it, in effect, is  requiring the courts to accept                                                                    
     electronic evidence, that's  essentially just stating a                                                                    
     legal consequence of the fact  that the people involved                                                                    
     in this  transaction have used  electronic means.   And                                                                    
     so, it's simply establishing the  rule that when you do                                                                    
     so, that is to be accepted just as though you had the                                                                      
     old, traditional paper means of the transaction.                                                                           
                                                                                                                                
CHAIR  McGUIRE remarked  that this  isn't  insignificant.   There                                                               
could be a voluntary transaction  between two individuals who sit                                                               
down and decide  by what means to  do it, and yet  there would be                                                               
no force of law.                                                                                                                
                                                                                                                                
REPRESENTATIVE GARA  counseled against amendments to  the bill on                                                               
the  subject raised  by Representative  Gruenberg.   For example,                                                               
courts may  have determined that  they don't have  adequate staff                                                               
to receive  5,000 pages of  documents in  a given timeframe.   He                                                               
suggested that that is the purpose  of leaving it to the agencies                                                               
to decide  how, when, and  under what circumstances this  will be                                                               
done.                                                                                                                           
                                                                                                                                
REPRESENTATIVE ANDERSON, who chairs  the House Labor and Commerce                                                               
Standing Committee, noted  that this bill had been  heard in that                                                               
committee,  and opined  that it's  a good  bill.   Reporting that                                                               
Representative  Guttenberg and  others  had  talked about  making                                                               
sure  there is  no potential  for fraud,  Representative Anderson                                                               
offered his belief  that the bill covers that.   He recalled that                                                               
when he  was a  legislative aide in  the 19th  legislature, then-                                                               
Representative Terry Martin  had sponsored a bill  with regard to                                                               
electronic transmittal  of absentee  ballots; thus he  said there                                                               
is a  precedent that  is illustrative of  how this  really works.                                                               
He indicated  that he  too has felt  frustration with  the courts                                                               
because they won't accept faxed documents.                                                                                      
                                                                                                                                
TAPE 04-1, SIDE B                                                                                                             
Number 2358                                                                                                                     
                                                                                                                                
VICKY BACKUS,  State Recorder, State Recorder's  Office, Division                                                               
of  Support  Services,  Department of  Natural  Resources  (DNR),                                                               
remarked  that  her  office  sees  HB  285  as  just  laying  the                                                               
groundwork for  the acceptance of electronic  transactions in the                                                               
future.  If HB 285 were  to pass, she explained, her office would                                                               
not jump  right into doing  electronic recordings;  instead, they                                                               
would wait  and see  what standards are  developed on  a national                                                               
level.   In  order  for  the State  Recorder's  Office to  accept                                                               
electronic transactions  from other states, it  will require that                                                               
there  be a  great  deal  of uniformity  in  the  standards.   In                                                               
conclusion, she relayed that although  her office is very much in                                                               
favor of  HB 285,  even if  it is approved  they would  not start                                                               
doing electronic recordings right away.                                                                                         
                                                                                                                                
Number 2303                                                                                                                     
                                                                                                                                
PAULA   KELSEY,  Recorder   Manager,  State   Recorder's  Office,                                                               
Division  of Support  Services, Department  of Natural  Resources                                                               
(DNR), noted  simply that the  "UCC Central File  adopted Revised                                                               
Article 9,"  which allows electronic admission  of documents, and                                                               
has experienced no problems to date.                                                                                            
                                                                                                                                
Number 2275                                                                                                                     
                                                                                                                                
SCOTT  CLARK, Notary  Clerk, Office  of the  Lieutenant Governor,                                                               
relayed  that  the  lieutenant  governor  wants  to  express  his                                                               
support of  HB 285.   He explained  that the  lieutenant governor                                                               
has a role pertaining to  certifying authorities, those who issue                                                               
digital  certificates for  digital  signatures.   Currently,  the                                                               
electronic  signature law  is technology  specific  to a  complex                                                               
mechanism, which has  proven to be unwieldy.  He  offered that HB                                                               
285 will  simplify matters for the  lieutenant governor's office.                                                               
He too noted  that the UETA provides a framework,  adding that it                                                               
will simplify the process and  broaden the concept of a signature                                                               
to include [those used by  the Permanent Fund Dividend Division].                                                               
He predicted that many governmental  agencies will be amenable to                                                               
the changes brought  about by the adoption of the  UETA.  He said                                                               
that  current  law  defines  electronic   signatures  in  a  very                                                               
specific technical manner  that is [not compatible  with how many                                                               
entities conduct business].                                                                                                     
                                                                                                                                
MR. CLARK  noted that Utah, which  he described as a  leader with                                                               
regard  to  digital notarizations,  has  found  that its  current                                                               
system  is not  very practical.    So although  there is  nothing                                                               
inherently  wrong  with the  concept  of  digital signatures,  he                                                               
opined, the  technology has  not yet evolved  to the  point where                                                               
its use  will be  easy.   Backing away  from current  statute and                                                               
moving in the  direction allowed by the UETA,  he concluded, will                                                               
simplify the process because entities  will be able to define for                                                               
themselves what  an electronic signature  will be; they  won't be                                                               
limited to a specific technology.                                                                                               
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  whether Section  2 is  repealing                                                               
the  current technology  statutes.   He  then  remarked that  Mr.                                                               
Peterson is [nodding his head].                                                                                                 
                                                                                                                                
REPRESENTATIVE OGG asked  whether adoption of HB  285 will effect                                                               
absentee ballots.                                                                                                               
                                                                                                                                
MR.  CLARK offered  that he  can  only speak  to the  bill as  it                                                               
relates  to notary  issues.   On the  issue of  absentee ballots,                                                               
however, he  added his  understanding that  those ballots  can be                                                               
witnessed by another person and  so would not necessarily have to                                                               
be  notarized; notarization  is  just  one of  two  options.   In                                                               
response to  another question, he  said he has not  been involved                                                               
with the issue of electronic voting.                                                                                            
                                                                                                                                
CHAIR  McGUIRE, after  determining  that no  one  else wished  to                                                               
testify,  closed public  testimony on  HB  285.   In response  to                                                               
questions, she expressed  a preference for having  the bill moved                                                               
along, surmising  that answers to the  committee's questions will                                                               
arrive before the bill is calendared for the House floor.                                                                       
                                                                                                                                
REPRESENTATIVE GRUENBERG  indicated that  he had no  objection to                                                               
moving the bill out.                                                                                                            
                                                                                                                                
Number 2037                                                                                                                     
                                                                                                                                
REPRESENTATIVE ANDERSON  moved to report  the proposed CS  for HB                                                               
285, Version  23-LS0829\D, Bannister,  10/6/03, out  of committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
note.  There being no  objection, CSHB 285(JUD) was reported from                                                               
the House Judiciary Standing Committee.                                                                                         

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