BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 873|
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UNFINISHED BUSINESS
Bill No: SB 873
Author: Beall (D), et al.
Amended: 8/25/16
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR: 79-0, 8/30/16 - See last page for vote
SUBJECT: Revised Uniform Fiduciary Access to Digital Assets
Act
SOURCE: Author
DIGEST: This bill is a companion bill to AB 691 (Calderon,
2016), the Revised Uniform Fiduciary Access to Digital Assets
Act (RUFADAA), which establishes a modified version of the
RUFADAA and establishes procedures for a decedent's personal
representative or trustee to obtain digital assets and
electronic information from the custodian of those assets and
information. Relevant to this bill, AB 691 provides that a
custodian and its officers, employees, and agents are immune
from liability for an act or omission done in good faith in
compliance with the RUFADAA. This bill limits the immunity
provision in AB 691 if that bill is enacted and instead provides
that the immunity provision "shall not apply in a case of gross
negligence or willful or wanton misconduct of the custodian or
its officers, employees, or agents."
Assembly Amendments (1) gut the contents of SB 873; (2) declare
the intent of the Legislature that Section 881 of the Probate
Code as reflected in this bill shall replace the same section
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that is reflected in AB 691; (3) provide that provisions of this
bill only become operative if AB 691 is enacted prior to this
bill; and (4) provide that a custodian and its officers,
employees, and agents are immune from liability for an act or
omission done in good faith and in compliance with the RUFADAA,
however, the immunity shall not apply in a case of gross
negligence or willful or wanton misconduct of the custodian or
its officers, employees, or agents.
ANALYSIS:
Existing law:
1) Authorizes a decedent's personal representative or the
public administrator to take possession or control of all of
the decedent's property to be administered in the decedent's
estate, and requires the personal representative to take all
steps reasonably necessary for the management, protection,
and preservation of, the estate in his/her possession.
2) Provides that the personal representative has the management
and control of the estate and prescribes fiduciary duties to
the personal representative.
3) Requires the personal representative to file with the court
clerk an inventory of property to be administered in the
decedent's estate together with an appraisal.
4) Requires the account to include both a financial statement
and a report of administration, as specified, and requires
the statement of liabilities in the report of administration
to include information as to whether notice to creditors was
given, as specified, creditor claims were filed, as
specified, creditor claims were not paid, satisfied, or
adequately provided for, and whether any real or personal
property is security for a claim, whether by mortgage, deed
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of trust, lien, or other encumbrance.
5) Requires the personal representative to either petition for
an order for final distribution of the estate or make a
report of status of administration within one year after the
date of issuance of letters in an estate for which a federal
estate tax return is not required, and within 18 months after
the date of issuance of letters in an estate for which a
federal estate tax return is required.
6) Provides that if a report of status of administration is
made, the report must show the condition of the estate, the
reasons why the estate cannot be distributed and closed, and
an estimate of the time needed to close administration of the
estate, and authorizes the court to require the personal
representative to appear before the court to show the
condition of the estate and the reasons why the estate cannot
be distributed and closed.
7) Establishes, under the Electronic Discovery Act, procedures,
evidentiary privileges, and judicial review for the request
and production of electronically stored information, as
defined.
8) Limits, under the Electronic Communications Privacy Act
(ECPA), the disclosure by an electronic communication service
or remote computing service of electronic communication of a
user, and provides definitions for "electronic
communication," "user," electronic communications system,"
and "electronic communication service."
9) Prohibits a person or entity providing an electronic
communication service to the public from knowingly divulging
to any person or entity the contents of a communication while
in electronic storage by that service, and prohibits a person
or entity providing remote computing service to the public
from knowingly divulging to any person or entity the contents
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of any communication which is carried or maintained on that
service:
On behalf of, and received by means of electronic
transmission from (or created by means of computer
processing of communications received by means of
electronic transmission from), a subscriber or customer of
such service; and
Solely for the purpose of providing storage or
computer processing services to such subscriber or
customer, if the provider is not authorized to access the
contents of any such communications for purposes of
providing any services other than storage or computer
processing.
1) Authorizes disclosure of the content of electronic
communications with the lawful consent of the originator or
an addressee or intended recipient of such communication, or
the subscriber in the case of remote computing service.
2) Authorizes disclosure of a record or other information
pertaining to a subscriber or customer of an electronic
communication service or remote computing service (not
including the contents of communications), including to any
person other than a governmental entity.
AB 691 (Calderon, 2016), the companion measure to this bill:
1) Establishes the RUFADAA and authorizes a decedent's personal
representative or trustee (fiduciary) to access and manage
digital assets and electronic communications, as specified.
2) Authorizes a person to use an online tool to give directions
to the custodian of his/her digital assets regarding the
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disclosure of those assets.
3) Specifies that, if a person has not used an online tool to
give that direction, he or she may give direction regarding
the disclosure of digital assets in a will, trust, power of
attorney, or other record.
4) Requires a custodian, as specified, of the digital assets to
comply with a fiduciary's request for disclosure of digital
assets to terminate an account, except under certain
circumstances, including when the decedent has prohibited
this disclosure using the online tool.
5) Specifies that a user's direction through the online tool or
testamentary document would override a contrary provision in
a terms-of-service agreement.
6) Provides that a fiduciary's or designated recipient's access
to digital assets may be modified or eliminated by a user, by
federal law, or by a terms-of-service agreement unless the
terms of service agreement is contrary to the user's
direction in an online tool or the user's direction in a
testamentary device;.
7) Authorizes the custodian, in its sole discretion, only if
consistent with the user's designation in the online tool or
in the user's testamentary document, to do any of the
following when disclosing the digital assets of a user:
Grant the fiduciary or designated recipient full
access to the user's account;
Grant the fiduciary or designated recipient partial
access to the user's account sufficient to perform the
tasks with which the fiduciary or designated recipient is
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charged; and
Provide the fiduciary or designated recipient with a
copy in a record of any digital asset that, on the date
the custodian received the request for disclosure, the
user could have accessed if the user were alive and had
full capacity and access to the account.
1) Authorizes a custodian to assess a reasonable administrative
charge for the cost of disclosing digital assets and would
not require a custodian to disclose a digital asset deleted
by a user.
2) Provides that if a user directs or a fiduciary or designated
recipient requests a custodian to disclose some, but not all,
of the user's digital assets, the custodian need not disclose
the assets if segregation of the assets would impose an undue
burden on the custodian.
3) Authorizes the custodian, fiduciary, or designated recipient
to petition the court for an order, as specified, if the
custodian believes the direction or request imposes an undue
burden.
4) Provides that the legal duties imposed on a fiduciary
charged with managing tangible property apply to the
management of digital assets, including all of the following:
(a) the duty of care; (b) the duty of loyalty; and (c) the
duty of confidentiality.
5) Provides that a fiduciary with authority over the property
of a decedent or settlor has the right of access to any
digital asset in which the decedent or settlor had a right or
interest, as specified.
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6) Makes disclosure of the contents of the deceased user's or
settlor's account to a fiduciary of the deceased user or
settlor subject to the same license, restrictions, terms of
service, and legal obligations, including copyright law, that
applied to the deceased user or settlor.
7) Provides that a custodian and its officers, employees, and
agents are immune from liability for an act or omission done
in good faith in compliance with the RUFADAA.
This bill:
1) Replaces Section 881 of the Probate Code as added by AB 691
in order to limit the immunity provided in AB 691.
2) Provides that it is the intent of the Legislature that SB
873 be enacted subsequent, and as a companion, to AB 691 so
that if AB 691 is chaptered, the version of Section 881 of
the Probate Code contained in SB 873 shall replace the
version of that same section provided in AB 691.
3) Provides that a custodian and its officers, employees, and
agents are immune from liability for an act or omission done
in good faith and in compliance with the RUFADAA.
4) Provides that the immunity shall not apply in a case of
gross negligence or willful or wanton misconduct of the
custodian or its officers, employees, or agents.
5) Provides that SB 873 shall become operative only if AB 691
is also enacted and SB 873 is enacted after AB 691.
Background
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In July 2014, the National Conference of Commissioners on
Uniform State Laws (NCCUSL) approved the Uniform Fiduciary
Access to Digital Assets Act (UFADAA), which was recommended for
enactment in all states "to vest fiduciaries with the authority
to access, control, or copy digital assets and accounts[,] . . .
remove barriers to a fiduciary's access to electronic
records[,] and to leave unaffected other law, such as fiduciary,
probate, trust, banking, investment, securities, and agency
law." (NCCUSL, Uniform Fiduciary Access to Digital Assets Act
(Apr. 2, 2015)
Page 9
omission done in good faith in compliance with" the RUFADAA.
This bill, SB 873 (Beall) would limit the immunity provided in
AB 691 and instead provide that a "custodian and its officers,
employees, and agents are immune from liability for an act or
omission done in good faith and in compliance with" the RUFADAA,
however, the immunity provision "shall not apply in a case of
gross negligence or willful or wanton misconduct of the
custodian or its officers, employees, or agents."
After AB 691 left the Senate, the author agreed to limit the
immunity provision in new Probate Code Section 881. Because AB
691 was already in the Assembly for a concurrence vote, it was
necessary to use another legislative vehicle to narrow the
limitation on immunity. This bill, SB 873, was amended to
become companion legislation to AB 691 and will not become
operative unless AB 691 is enacted first.
Comments
The author writes:
AB 691 would provide that a custodian of digital assets is
immune from liability for an act or omission done in good
faith and in compliance with the act. The companion bill, SB
873, further clarifies the intent by specifying immunity does
not apply in a case of gross negligence or willful or wanton
misconduct. It is important for custodians to feel confident
that disclosing certain information to fiduciaries to help
administer an estate will be protected from litigation if
they acted in good faith, but not extend the immunity
protections included in the bill to those who clearly diverge
away from the guidance AB 691 provides.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
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SUPPORT: (Verified8/27/16)
None received
OPPOSITION: (Verified8/27/16)
None received
ASSEMBLY FLOOR: 79-0, 8/30/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Nazarian
Prepared by:Margie Estrada / JUD. / (916) 651-4113
8/30/16 21:19:32
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