                                ATTORNEYGENERAL                     OF TEXAS
                                             GREG        ABBOTT




                                                 August 5,2004



The Honorable Eugene D. Taylor                            Opinion No. GA-0228
Williamson County Attorney
Williamson County Courthouse Annex                        Re: Whether a county clerk must accept for
Second Floor                                              recording a paper copy, containing printed images
405 Martin Luther King Boulevard                          of signatures or a printed image of a notary seal,
Georgetown, Texas 78626                                   of an electronic record of a real estate transaction
                                                          (RQ-0186-GA)

Dear Mr. Taylor:

         You ask whether a county clerk must accept for recording a paper copy, containing printed
images of signatures or a printed image of a notary seal, of an electronic record of a real estate
transaction.’ You. focus your inquiry on the effects of the Federal Electronic Signatures in Global
and National Commerce Act (the “E-Sign Act”), 15 United States Code chapter 96 (2000); the
Uniform Electronic Transactions Act (the “UETA”), found in Texas Business and Commerce Code
chapter 43, as adopted by Act of May 24,2001,77th     Leg., R.S., ch. 702, $ 1,200l Tex. Gen. Laws
1341, 1341-47; and various state laws relating to a county clerk’s duties as county recorder. See
Request Letter, supra note 1, at 2.

I.       Factual Background

         You state that the Williamson County Clerk’s Office is unable to accept electronically filed.
documents at this time and, consequently, accepts only paper documents for filing. Id. at l-2. The
Clerk’s Office requires real estate filings “to contain original signatures and notary stamps or seals
rather than photocopied or faxed documents.” Id. at 1. Nonetheless, you state, some people have
submitted as real estate filings “paper versions of documents which were ‘electronically generated.“’
Id. at 2. These paper copies contain “printed representations of signatures captured as digital
images” instead of“original,pen and ink signatures.” Id. “Likewise,” you continue, “the notary seals
on these documents are computer generated rather than stamped or embossed.” Id. As support for
their position that the clerk must accept these copies, the persons attempting to file “point to” the
UETA and subchapter I of the E-Sign Act, providing for electronic records and signatures in
commerce. Id. at 2; TEX.Bus. & COMM. CODE ANN. ch. 43 (Vernon 2002 & Supp. 2004); 15 U.S.C.
ch. 96, subch. I (2000). The persons further “claim that a County Clerk can be charged with a civil


          ‘See Letter from Honorable Eugene D. Taylor, Williamson County Attorney, to Honorable Greg Abbott, Texas
Attorney General (Feb. l&2004) (on file with the Opinion Committee, also available at http://www.oag.state.ti.us)
[hereinafter Request Letter].
 The Honorable Eugene D. Taylor - Page 2                  (GA-0228)




 penalty’ under section 11.004(b) of the Property Code, which sets out the county clerk’s duties with
 respect to real property instruments, “if the [cllerk refuses to accept” the paper copies. Request
 Letter, supra note 1, at 2; see TEX.PROP.CODEANN. 5 11.004(Vernon 2004).

        In light of this situation, you ask four questions about a clerk’s obligation      to accept paper
 copies of real estate transaction documents:

                1. Does [the UETA] or [the E-Sign Act] require a County Clerk to
                accept real estate filings which contain printed images of signatures
                rather than original pen and ink signatures?

                2. Does [the UETA] and/or Government Code 3 406.013 [pertaining
                to a notary public’s seal] require a County Clerk to accept real estate
                filings which contain a printed image of a notary seal rather than an
                original stamped or embossed seal?

                3. Does [the     UETA] and/or Government Code 3 406.013 require a
                County Clerk      to accept real estate filings which are faxed? Is this
                requirement      limited to paper documents          purporting   to be
                electronically   generated or may any real estate filing be faxed?

                4. Is a County Clerk subject to the civil penalty provisions of
                Property Code 9 11.004(b) for refusing to accept an “electronically
                generated’ real estate filing?

Request Letter, supra note 1, at 2.

II.     ADplicable Statutes

        A.      Texas Statutes Relating to the Recording Process Generally

                  “A conveyance of an estate of inheritance, a freehold, or an estate for more than one
 year. . . must be in writing . . . .” TEX.PROP.CODEANN. $5.021 (Vernon 2004). A county clerk
 may record an instrument concerning real or personal property if the instrument (1) “has been
 acknowledged, sworn to with a proper jurat, or proved according to law,” id. 3 12.001 (a), and (2) “is
 signed and acknowledged        or sworn to by the grantor in the presence of . . . witnesses or
 acknowledged or sworn to before and certified by an officer authorized to take acknowledgments
 or oaths,” id. 9 12.001(b). An “officer authorized to take acknowledgments        or oaths” includes a
notary public, whose seal must comply with section 406.013 of the Government Code. See id.; see
also TEX.GOV’T CODEANN. 9 406.013(c) (Vernon Supp. 2004). Under section 406.013, a notary
public must affix to the sworn document a seal of office “by a seal press or stamp that embosses or
prints a seal that legibly reproduces the required elements of the seal under photographic methods.”
TEX.GOV’T CODEANN. 9 406.013(c) (Vernon Supp. 2004). This requirement does not apply,
however, “to an electronically transmitted authenticated document,” although the electronically
transmitted authenticated document “must legibly reproduce” the seal’s required elements. Id.
0 406.013(d).
The Honorable Eugene D. Taylor - Page 3                 (GA-0228)




        Under section 11.004(a) of the Property Code, a county clerk must “correctly record . . . any
instrument authorized or required to be recorded in that clerk’s office, ” including real estate filings.
TEX. PROP. CODE ANN. 5 11.004(a) (Vernon 2004). A clerk who violates section 11.004 is liable
for damages and “for a civil penalty of not more than $500” under subsection (b). Id. $ 11.004(b).
Finally, a clerk must be vigilant with respect to the authenticity of documents relating to real
property interests, and if the clerk reasonably suspects that such a document filed, recorded, or
submitted for filing or recording is fraudulent, the clerk must notify the parties listed in the
document. See TEX. GOV’T CODE ANN. 0 5 1.901(a) (Vernon 1998); see also id. 0 5 1.901(c) (setting
out circumstances in which a document is presumed to be fraudulent).

        B.      The Federal E-Sign Act

                Subchapter I of the E-Sign Act, 15 United States Code sections 7001 through 7006,
governs electronic records and signatures in or affecting interstate or foreign commerce. See 15
U.S.C. $7001(a) (2000); Michael J. Hays, Note, The E-Sign Act of 2000: The Triumph ofFunction
over Form in American Contract Law, 76 NOTRE DAME L. F&V. 1183, 1193 (2001). Neither
subchapter II, which pertains to transferable records, nor subchapter III, which pertains to
international electronic commerce, applies here. See 15 U.S.C. $9 7021,703l (2000).

         Under the “general rule of validity” that section 7001 (part of subchapter I) articulates, with
respect to a transaction affecting interstate or foreign commerce, the electronic form of a signature,
contract, or other transaction-related       record “may not be denied legal effect, validity, or
enforceability solely because it is in electronic form, ” notwithstanding any other law. Id. $7001 (a).
A transaction, for the E-Sign Act’s purposes, is “an action or set of actions relating to the conduct
of business, consumer, or commercial affairs between two or more persons, including . . . the sale,
lease, exchange, or other disposition of any interest in real property.” Id. 9 7006(13)(B). Subchapter
I does not require a person, “other than a governmental agency with respect to a record other than
a contract to which it is a party,” to use or accept electronic records or electronic signatures. Id.
$ 7001(b)(2). And nothing in subchapter I “limits or supersedes” a state regulatory agency’s rule
“that records be filed with [the] agency. . . in accordance with specified standards or formats.” Id.
5 7004(a). But see id. $ 7004(b)(2) (requiring that a state agency’s regulation be consistent with
15 United States Code section 7001).

        Section 7002(a) expressly permits a state to supersede section 7001 by adopting the UETA:

               A State statute, regulation, or other rule of law may modify, limit, or
       supersede the provisions of section 7001 of this title with respect to State law only
       if such statute, regulation, or rule of law-

                       (1) constitutes an enactment or adoption of the [UETA] as
               approved and recommended for enactment in all the States by the
               National Conference of Commissioners on Uniform State Laws in
               1999, except that any exception to the scope of such Act enacted by
               a State under section 3(b)(4) of such Act [authorizing a state to
               exempt from UETA transactions governed by (1) law governing the
               execution of wills; (2) certain parts of the Uniform Commercial
 The Honorable .Eugene D. Taylor - Page 4                     (GA-0228)




                  Code; (3) [the Uniform Computer Information Transactions Act]; and
                  (4) [other laws, if any, identified by the State]] shall be preempted to
                  the extent such exception is inconsistent with this subchapter or
                  subchapter II of this chapter, or would not be permitted under
                  paragraph (2)(A)(ii) of this subsection; or

                           (2)(A) specifies the alternative procedures or requirements for
                  the use or acceptance (or both) of electronic records or electronic
                  signatures to establish the legal effect, validity, or enforceability of
                  contracts or other records, if-

                                    (i) such alternative procedures or requirements
                           are consistent with this subchapter and subchapter II
                           of this chapter; and

                                    (ii)   such      alternative      procedures       or
                           requirements do not require, or accord greater legal
                           status or effect to, the implementation or application
                           of a specific technology or technical specification for
                           performing     the functions         of creating,    storing,
                           generating,      receiving,         communicating,         or
                           authenticating     electronic      records- or electronic
                           signatures; and

                           (B) if enacted or adopted after June 30,2000, makes specific
                  reference to this chapter.

Id. $j 7002(a).

         C.       The Texas UETA

                 In 2001 Texas adopted the UETA, a uniform act promulgated by the National
Conference of Commissioners on Uniform State Laws in 1999: as chapter 43 of the Business and
Commerce Code. See Act of May 24,2001, 77th Leg., R.S., ch. 702, 5 1,200l Tex. Gen. Laws
 1341,1341-47. The UETA applies generally to electronic records and electronic signatures relating
to a transaction (defined as “an action or set of actions occurring between two or more persons
relating to the conduct ofbusiness, commercial, or governmental affairs,” TEX.Bus. &Corn. CODE
ANN. 5 43.002( 15) (Vernon 2002)), although a transaction subject to the UETA remains “subject to
other applicable substantive law.” Id. 9 43.003(a), (d). An electronic record is “a record created,
generated, sent, communicated, received, or stored by electronic means.” Id. 8 43.002(7); see also
id. 5 43.002(5), (12) (defining the terms “electronic” and “record”). An electronic signature is “an


         *See Letter from JohnM. McCabe, Legal Counsel/Legislative Director, National Conference of Commissioners
on Uniform State Laws, to Honorable Greg Abbott, Texas Attorney General, at 1 (rec’d Apr. 9,2004) (on file with the
Opinion Committee) [hereinafter NCCUSL Briefl.
 The Honorable Eugene D. Taylor - Page 5                 (GA-0228)




 electronic sound, symbol, or process attached to or logically associated with a record and executed
 or adopted by a person with the intent to sign the record.” Id. 5 43.002(8).

         While the UETA must be construed “to facilitate electronic transactions consistent with other
 applicable law,” id. 9 43.006(l), it does not require the creation, receipt, or use of an electronic
 record or signature in any circumstance, and the UETA applies only to “transactions between parties
 each of which has agreed to conduct transactions by electronic means.” Id. 9 43.005(a)-(b). Section
 43.007 recognizes electronic records and electronic signatures:

                        (a) A record or signature may not be denied legal effect or
                enforceability solely because it is in electronic form.

                        (b) A contract may not be denied legal effect or enforceability
                solely because an electronic record was used in its formation.

                        (c) If a law requires a record to be in writing, an electronic
                record satisfies the law.

                         (d) If a law requires   a signature,   an electronic   signature
                satisfies the law.

Id. 5 43.007.

        Section 43.019 explicitly “modifies, limits, or supersedes” the E-Sign Act, as 15 United
States Code section 7002(a) authorizes a state to do. Id. $43.019; see 15 U.S.C.,§ 7002(a) (2000).
Section 6(a) of the 2001 enacting legislation appears to limit section 43.019’s effect, however:

                         Notwithstanding Section 43.019 . . . Chapter 43 . . . does not
                modify, limit, or supersede the provisions of. . . 15 U.S.C. [§§I 7001
                r‘Genera1 rule of validity”] and 7003 [“Specific exceptions”] . . . and
                specifically does not authorize the electronic delivery of any notice of
                the type described by. . . 15 U.S.C. [§J 7003[(b)]. . . .

Act ofMay24,2001,77th      Leg., R.S., ch. 702,s 6(a), 2001 Tex. Gen. Laws 1341, 1347-48. Section
7003(b), 15 United States Code, provides that section 7001, the “general rule of validity,” does not
apply to court documents; notices of the cancellation or termination ofutility services; certain notices
regarding debt on and possession of an individual’s primary residence; cancellation or termination
of health insurance or benefits or life insurance benefits (excluding annuities); notices of product
recalls; and certain documents that accompany toxic or dangerous materials, such as hazardous
materials. See 15 U.S.C. 9 7003(b) (2000).

       C.       Preemption   Issues

                It is not clear, from the E-Sign Act or from the Texas UETA, whether or to what
extent the Texas UETA modifies, limits, or supersedes the E-Sign Act. Commentators have found
the E-Sign Act’s “exemption to preemption” confusing and suggest that it may be subject to multiple
The Honorable Eugene D. Taylor - Page 6                       (GA-0228)




interpretations. See Nathan A. Huey, Note, E-Mail and Iowa ‘s Statute of Frauds: Do E-Sign and
UETA Really Matter. 7, 88 IOWA L. REV. 68 1,695-99 (2003); Patricia Brumfield Fry, A Preliminary
Analysis of Federal and State Electronic Commerce Laws (2001), available at www.nccusl.orgf
nccusl/whatsnew-article1   asp) (last visited July 5,2004) [hereinafter Fry]; Robert A. Wittie & Jane
K. Winn, Electronic Records and Signatures Under the Federal E-Sign Legislation and the UETA,
56Bus. LAW. 293,324-33 (2000) [hereinafter Wittie & Winn]. No court has considered the E-Sign
Act’s preemptive effect. With respect to Texas’s version of the UETA in particular, section 43.019
of the Business and Commerce Code purports to modify, limit, or supersede the E-Sign Act in full,
but section 6 of the enacting legislation restricts section 43.019’s effect and specifically does not
supersede 15 United States Code sections 7001 and 7003. See TEX.Bus. & COMM. CODE ANN.
0 43.019 (Vernon 2002); Act of May 24,2001,77th Leg., R.S., ch. 702, § 6(a), 2001 Tex. Gen. Laws
1341, 1347-48.

        Given this uncertainty, we are reluctant to determine which act prevails in Texas. To the
extent your questions concern section 7001 or 7003 of the federal statute, we assume that the federal
law preempts the relevant portions of the UETA. To the extent your questions involve sections other
than sections 7001 or 7003, we assume the UETA prevails.

III.     Relevant National Conference of Commissioners                 on Uniform State Laws Comments
         and Attornev General Opinions

         Your questions generally involve a county recording officer’s duty to accept documents
resulting from electronic transactions under the E-Sign Act and the UETA. See Request Letter,
supra note 1, at 2. The National Conference of Commissioners        on Uniform State Laws (the
“NCCUSL”), which drafted the UETA, has noted the general uncertainty as to whether either act
requires local recording officers to accept electronic documents:

                     [E]ven though documents that result from electronic transactions
                 are valid and enforceable between the parties [under the E-Sign Act
                 and the UETA], there is no broad agreement about whether those
                 documents may be recorded in the various local land records offices
                 in the several states. Laws and regulations in many states frequently
                 limit a recordable document to one that is in writing or on paper.
                 They may also require that the recorded document be an original
                 document. Similar laws and regulations may require signatures to be
                 in writing and acknowledgments to be signed. Being electronic and
                 not on paper, being an electronic version of an original paper
                 document, or having an electronic signature or acknowledgment
                 instead of a handwritten one, an electronic document might not be
                 recordable under the laws of these states . . . .3




           3National Conference of Commissioners on Uniform State Laws, Uniform Real Property Electronic Recording
Act at 1, available at http://www.law.upenn.edu.bll/ulc/urpera/URPERA2OO4AnnMtgDrafi.htm(last visited July 5,2004)
[hereinafter NCCUSL Draft] (citation omitted).
The Honorable Eugene D. Taylor - Page 7                           (GA-0228)




The NCCUSL currently is drafting a Uniform Real Property Electronic Recording Act “to assist state
and local government[s] in making a full transition to electronic media.‘* The draft’s prefatory note
describes the UETA and the E-Sign Act as giving “legal effect to real estate transactions that are
executed electronically and allow[ing] them to be enforced between the parties thereto.” NCCUSL
Draft, supra note 3, at 1. Presumably, the new Uniform Real Property Electronic Recording Act,
will, if adopted, further clarify a local recording officer’s duties with respect to electronic
transactions.5

        No courts have considered issues analogous to those you raise.6                         Attorneys    general in
California and New York have considered analogous issues, however.


         4NCCUSL Brief, supra note 2, at 3.

         ‘Our conclusion is consistent with the comments of the State Bar of Texas, Business Law Section, relating to
the UETA. Seegenerally TEX.Bus. & COMM. CODE ANN.ch. 43 (Vernon Supp. 2004). In comments on section43.008,
the Business Law Section states that, while an electronic real estate conveyance would be “effective between the parties,”
it “would not be recordable in the deed records of the particular county until the county had adopted an electronic filing
system in accordance with Chapter 195, Local Government Code. . . . Thus, until electronic filing of real estate
conveyances in the proper records becomes possible, conveyances written on paper. . . will be preferable so that the
purchaser’s rights against third parties can be protected through the filing system.” .Zd. 0 43.008 cmt. 2.

         6A lower New York court questioned the E-Sign Act’s constitutionality to the extent that it (1) attempts to
“commandeer[] the activities of a state to achieve a federal purpose” and (2) goes “beyond issues of interstate
commerce.” People v. McFarlan, 744 N.Y.S.2d 287,293 (N.Y. Sup. Ct. 2002). The New York court considered the
E-Sign Act’s applicability to a printout of a computer-generated photo array of possible suspects. See id. at 289,293.
The court felt that the E-Sign Act may well be unconstitutional, at least in part:

                  While the thrust of E-Sign, that it relates to ‘transactions in or affecting interstate
                  commerce,” when applied to the instant case, would seem to exclude the police
                  records used in this case, as there is no transaction as defined by [ 151 U.S.C.A. Q
                  7006( 13), the effect of preemption is much broader. E-Sign would, for example,
                  purport to cover the same police record if it were used (or perhaps referred to) in
                  a commercial transaction. The impact of imposing upon a State a rule as to such
                  state’s records when used in a transaction, but not when the same records are not,
                  is in the real world a rule imposing the rule on such state’s records for all purposes.
                  . . . This effective imposition of a federal rule on State records thus may well
                  constitute a violation against the rule against commandeering the activities of a state
                  to achieve a federal purpose. [See] Printz v. U.S., 52 1 U.S. 898 . . . (1997) (holding
                  [under article I, section 8 of the United States Constitution] that the Brady Hand
                  Gun Act provisions requiring the states to conduct background checks on gun
                  purchases was unconstitutional).

                            A second reason why E-Sign may not apply in New York, at least [with]
                  respect to transactions not in interstate commerce, is the Tenth Amendment to the
                  United States Constitution. The issue here is whether and to what extent the federal
                  government may use the language of the interstate commerce clause to go beyond
                  issues of interstate commerce to impose a better nationwide rule. While admittedly,
                  life would be simpler and perhaps better if the same rule applied to all contracts,
                  their formation and interpretation across the country, creating uniformity for
                  commercial laws has generally been left to state action.

Id. at 293-94 (footnote omitted).
The Honorable Eugene D. Taylor - Page 8                  (GA-0228)




          In 2002 the California attorney general implicitly determined that the E-Sign Act does not
require a county recorder to accept electronic documents, which would include electronic signatures.
See Op. Cal. Att’y Gen. No. 02-l 12 (2002). In that opinion, the California attorney general
addressed whether county recorders may “implement electronic recordation of documents in their
respective jurisdictions, ” analyzing whether “a conflict exists between” the state statutes governing
the county recorder’s duties and responsibilities, the California version of the UETA, and the E-Sign
Act. Id. at 2. California law requires a county recorder to accept for recordation an instrument,
paper, or notice that “contain[s] an original signature or signatures, except as otherwise provided by
law, or [that is] a certified copy of the original.” Id. (quoting CAL. GOV'T CODE9 27201 (b)( 1)). In
certain limited circumstances, California law permits a county recorder to accept for recording a
digitized image of a recordable instrument in lieu of a written paper if the “image conforms to all
other applicable statutes that prescribe recordability, except the requirement of original signatures.”
Id. at 3 (quoting CAL. GOV'T CODE$27279(b)(l)).            The opinion notes that the California UETA
provides that county recorders’ duties, “in respect to recording instruments,” are prescribed by the
state statutes governing recorders’ duties and responsibilities.       Id. at 6. In addition, though the
California version of the UETA-like           section 43.007 of the Texas Business and Commerce
Code-stipulates      that electronic records and electronic signatures satisfy laws requiring written
records or written signatures, the attorney general stated that this stipulation applies only to “the legal
effect and enforceability of the transactions themselves . . . and not to the recordation of a document
reflecting a transaction between two independent parties. ” Id. at 7. The attorney general construed
the E-Sign Act similarly:

                E-sign concerns the legal effect, validity and enforceability         of
                electronic records and electronic signatures relating to transactions
                between private parties. E-sign refers throughout to “a contract or
                other record relating to a transaction in or affecting interstate or
                foreign commerce.” Also similarly defined, the term “transaction”
                means “an action or set of actions relating to the conduct of business,
                consumer, or commercial affairs between two or more persons. . . .”
                (15 U.S.C. 3 7006(13).) E-sign contains no reference to the legal
                duty of a county recorder to record documents.

                         Accordingly,    E-sign does not preempt the [relevant]
                provisions of [the California] Government Code . . . specifying the
                duties of county recorders. . . . Nothing in E-sign may be construed
                as a direct enactment positively impairing the public policy of this
                state relating to the recordation of documents.

Id. at 10. Finding that neither the UETA nor the E-Sign Act requires a county recorder to accept
electronic documents, the attorney general concluded that county recorders generally are not
authorized under the state law prescribing their duties and responsibilities to implement electronic
recordation of documents. See id. at 12.

         In another opinion, the California attorney general determined that the UETA does not
require the secretary of state to accept for filing a nonprofit organization’s certificate of voluntary
dissolution containing facsimiles of the directors’ signatures rather than their original signatures.
The Honorable Eugene D. Taylor - Page 9                   (GA-0228)




See Op. Cal. Att’y Gen. No. 02-5 14 (2002). Focusing on the California statute analogous to section
43.007 of the Texas Business and Commerce Code, which states that an electronic record or
electronic signature satisfies a law requiring a written record or signature, the attorney general
pointed out, first, that the UETA does not require the receipt of a record or signature by electronic
means or in an electronic form. See id. at 3 (citing CAL. CORP.CODE9 1633.7). Moreover, this
statute applies only to “the legal effect and enforceability of the transaction itself. . . and not to the
filing or recordation of a document reflecting the transaction. ” Id. Second, the UETA applies only
“to transactions between” consenting parties, and the “filing or recordation of a document concerning
the transaction does not render the act of filing or recordation itself a new ‘transaction’ or make the
public agency a ‘party’ to the original transaction.” Id.

          In 2001 the New York attorney general similarly concluded that “there is a substantial
possibility that” the E-Sign Act does not preclude “a county recording officer from rejecting a filing
submitted for recordation that bears only an electronic signature but lacks an ‘original signature.“’
Op. N.Y. Att’y Gen. No. 2001-3,200l          WL 1095069, *l (2001). Reviewing New York laws that
prescribe a county recorder’s duties, the attorney general found that recording officers are barred “at
the present time from accepting filings submitted for recordation that contain electronic signatures.”
Id. at “2. The attorney general determined that, although the E-Sign Act covers activities relating
to “the transfer of an interest in real property from one person . . . to another,” it “does not . . . cover
the related but distinct activity of recordation of a private transaction, which is purely governmental
in nature.” Id. at *3. With respect to section 7004 of the E-Sign Act, which preserves a state
regulatory agency’s authority to require “that records . . . filed with [the] agency” comply with
“specified standards or formats, ” the attorney general found it “unclear” whether a county recording
officer would be a state regulatory agency encompassed by section 7004. Id. at “6. Ultimately,
however, the attorney general concluded that the section was intended to “‘protect recording systems
. . . from any obligation to immediately convert to electronic records.“’ Id. (quoting Fry, supra
p. 6, at 11). The attorney general also cites section 7001(e) of the E-Sign Act, which authorizes a
state to enact a statute that denies validity of an electronic record if the electronic record “is not in
a form that is capable of being retained and accurately reproduced,” 15 U.S.C. $7001(e) (2000), as
evidence that Congress was reluctant to “force states to immediately adopt new standards and
formats that accommodate electronic filings.” Op. N.Y. Att’y Gen. No. 2001-3,200l WL 1095069,
*6 (2001). “If the integrity and authenticity of a paperless record cannot be assured over time
because a state cannot, for example, properly store and retrieve filings that contain electronic
signatures,” then section 7001(e) of the E-Sign Act permits the state to “refuse to accept such
filings.” Id. “In sum,” the New York attorney general concluded, “although the issue ultimately may
be decided by the courts, it is our estimation . . . that there is a substantial possibility that E-SIGN
does not . . . obligate county recording officers to accept for recordation a filing that contains only
an electronic signature but lacks an . . . ‘original signature.“’ Id. at *7.

IV.     Analvsis

        A.       The First Question

                Having set out the. relevant law and attorney general opinions, we turn to your
questions.   You ask first whether, under the UETA or the E-Sign Act, a county clerk must accept real
 The Honorable Eugene D. Taylor - Page         10       (GA-0228)




estate filings that contain printed images of signatures rather than original pen and ink signatures.
See Request Letter, supra note 1, at 2.

         We conclude, like our counterparts in California and New York, first, that the E-Sign Act
does not require a county clerk to accept real estate filings that contain printed images of signatures
rather than original pen and ink signatures. While section 7001 of the E-Sign Act is not clearly
limited to transactional documents, we-believe that a court probably would construe it to be so.
The New York attorney general cited a pre-enactment statement by Congressman Dingell that
recording of real property documents is “precisely the type of ‘uniquely governmental’ transaction
unaffected by the preemptive sweep of’ section 7001 (a)( 1). Op. N.Y. Att’y Gen. No. 2001-3,200l
WL 1095069, *5 (2001). Section 7001 ofthe E-Sign Act states that “with respect to any transaction
in or affecting interstate or foreign commerce,” an electronic signature by itself does not render a
contract or other record “relating to such transaction” invalid. 15 U.S.C. 3 7001 (a)( 1) (2000). A real
property filing is not a “transaction” for purposes of the E-Sign Act, see id. $7006( 13) (defining the
term “transaction”), but a document intended for filing among a clerk’s real property records may
be a record “relating to” a real property conveyance. See id. 8 700 1(a)( 1); see Wittie & Winn, supra
p. 6, at 320-21 (stating that the phrase “relating to” extends the E-Sign Act’s reach “beyond actual
transaction documents to include all ancillary records, such as applications, filings, notices, and
similar documentation”).     The E-Sign Act defines the term “transaction,” but it does not define the
phrase “relating to,” and no court has yet defined the term. See 15 U.S.C. $7006(13) (2000).

         Second, the UETA does not require a county clerk to accept electronically transmitted
documents or signatures. See TEx. Bus. & COMM.CODEANN. 443.005(a) (Vernon 2002); see also
13 TEX.ADMIN. CODE$5 7.141(4), 7.142(a)-(b) (2004). The UETA applies only to transactions
between consenting parties. See TEX.Bus. & COMM. CODEANN. 9 43.005(b) (Vernon 2002). Third,
and finally, you do not ask about an electronic signature; you ask about a paper copy of an electronic
signature. Nothing in the E-Sign Act or the UETA applies to such a record. See generally id.
ch. 43.

        We accordingly conclude that a county clerk is not required to accept real estate filings that
contain copies of electronic signatures.

        B.      The Second Question

                You ask second whether the UETA or section 406.013 of the Government Code
requires a county clerk to accept real estate filings containing a copy of an electronically transmitted
notary public seal. See Request Letter, supra note 1, at 2. Although you do not ask about the E-Sign
Act, we believe, for the reasons cited by the California and New York attorneys general and the
reasons cited in answer to your first question, that the E-Sign Act does not require a county clerk to
accept real estate filings containing a copy of an electronically transmitted notary public seal.
Additionally, nothing in the UETA requires a clerk to accept documents for filing, any portion of
which is transmitted electronically. Moreover, as we have pointed out, neither the E-Sign Act nor
the UETA pertains to copies of electronic documents. Section 406.013 of the Government Code,
which excepts from the requirement that a notary public seal be affixed to a document an
“electronically transmitted authenticated document,” does not thereby require a clerk to accept for
The Honorable Eugene D. Taylor       - Page 11           (GA-0228)




filing a document containing a copy of an electronically      transmitted   notary public seal. See TEX.
GOV’T CODE ANN. 3 406.013(d) (Vernon Supp. 2004).

         We consequently conclude that neither the UETA nor section 406.013, Government Code,
requires a county clerk to accept for filing a document containing a copy of an electronically
transmitted notary public seal.

        C.      The Third Question

                You ask third whether the UETA or section 406.013 of the Government Code
requires a county clerk to accept faxed.real estate filings. See Request Letter, supra note 1, at 2.
A fax is an electronic record for purposes of the UETA. See TEX. Bus. & COMM. CODE ANN.
§ 43.002(5), (7) W emon 2002) (defining the terms “electronic” and “electronic record”); see also
Madden v. Hegadom, 565 A.2d 725,728 (N.J. Super. Ct. Law Div.), affiz, 571 A.2d 296 (N.J.
Super. Ct. App. Div. 1989) (per curiam) (explaining the “common knowledge that ‘fax’ machines
electronically scan documents, reduce the documents to a series of digital signals and transmit them
over telephone lines to a receiving machine which reassembles the signals and then reproduces
the original documents”); Tex. Att’y Gen. Op. No. JC-0471 (2002) at 4 (describing how a fax
machine works). The UETA does not require a clerk to receive faxes, or other electronic records,
in any circumstances.   See TEX. Bus. & COMM. CODE ANN. 9 43.005(a) (Vernon 2002). Nor does
section 406.013, which serves only to except documents that are permitted to be electronically
transmitted from the embossed or printed notary public seal requirement.      See TEx. GOV’T CODE
ANN. 5 406.013(c)-(d) (Vernon Supp. 2004).

        We thus conclude that neither the UETA nor section 406.013 of the Government                Code
requires a county clerk to accept faxed real estate tilings.

        D.      The Fourth Question

                Finally, you ask whether a county clerk who refuses to accept an electronically
generated real estate filing may be liable for civil penalties under section 11.004(b) of the Property
Code. See Request Letter, supra note 1, at 2. Under section 11.004(b), a county clerk who fails to
correctly record an instrument that is “authorized or required to be filed in that clerk’s office” is
liable “for a civil penalty of not more than $500.” TEX. PROP. CODE ANN. 9 11.004(a)(l), (b)
(Vernon 2004). A county clerk has no duty to accept and record a paper copy of an electronically
generated real estate filing. Indeed, the State Library and Archives Commission’s rules make this
clear: a county clerk may choose to participate in an electronic filing system. See 13 TEX. ADMIN.
CODE $8 7.141(4), 7.142(a), (b) (2004). Moreover, because an electronically generated document
does not comply with statutory requirements for real estate filings, see TEX. PROP. CODE ANN.
$0 5.021,12.001(a)    (Vernon 2004), a county clerk is prohibited from recording such a document.

         Consequently, a county clerk does not violate section 11.004 by refusing to record an
electronically generated real estate filing, and the clerk is not liable for civil penalties under section
11.004(b).
The Honorable Eugene D. Taylor - Page        12        (GA-0228)




                                        SUMMARY

                        Nothing in the E-Sign Act, 15 United States Code chapter 96,
               or the Uniform Electronic Transactions Act (the “UETA”), chapter 43
               of the Texas Business and Commerce Code, requires a county clerk
               to accept real estate filings that contain copies of electronic
               signatures. Similarly, nothing in the UETA, nor in section 406.013
               of the Government Code, requires a county clerk to accept real estate
               filings containing a copy of an electronically transmitted notary public
               seal. Neither the UETA nor section 406.013 requires a county clerk
               to accept faxed real estate filings. Furthermore, current statutory
               requirements in the Property Code appear to prohibit a county clerk’s
               recording of an electronically generated record or a copy of such a
               record, including an electronically generated signature or notary
               public seal or a faxed document. Finally, a county clerk who refuses
               to accept an electronically generated real estate filing is not liable for
               civil penalties under section 11.004(b) of the Property Code.

                                               Very91~ YOU




                                               Attom&$neral        of Texas



BARRY R. MCBEE
First Assistant Attorney General

DON R. WILLETT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee
