Chapter 0124 - 471R - H Ver of HB2150

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 41-353, Arizona Revised Statutes, is amended to read:

START_STATUTE41-353. Appointment; term; oath and bond; duties

A. The secretary of state may appoint electronic notaries public to hold office for four years.

B. The secretary of state shall prescribe the application form for an electronic notary. Applicants shall submit the application to the secretary of state with a filing fee, a bond and a bond filing fee as prescribed by rule by the secretary of state.

C. The materials and methods for creating notary service electronic certificates and any other encryption based technologies used by an electronic notary shall have a maximum useful life of two years and shall not exceed the life of the electronic notary commission.

D. An electronic notary public is a public officer commissioned by this state and the following apply without regard to whether the electronic notary public’s employer or any other person has paid the fees and costs for the commissioning of the electronic notary public, including costs for the materials and methods employed with the electronic notary token and the materials and methods for creating notary service electronic certificates and journals:

1. All of the following remain the property of the electronic notary:

(a) The materials and methods employed with and solely for the electronic notary token.

(b) The materials and methods used solely for creating notary service electronic certificates.

2. Notwithstanding paragraph 1 of this subsection, an electronic notary does not gain ownership or presumptive access rights to any of an employer's assets or resources that are used or are usable for a purpose other than electronic notarial acts.

3. An electronic notary may perform electronic notarizations outside the workplace of the electronic notary's employer except during those times normally designated as the electronic notary's hours of duty for that employer. All fees received by an electronic notary for electronic notarial services provided while not on duty remain the property of the electronic notary.

4. An employer of an electronic notary shall not limit the electronic notary’s services to customers or other persons designated by the employer.

E. An electronic notary public shall continue to serve until the electronic notary's commission expires, the electronic notary resigns the commission, the electronic notary dies or the secretary of state suspends or revokes the commission. An employer shall not cancel the electronic notary bond or electronic notary commission of any electronic notary who is an employee and who leaves that employment.

F. An electronic notary shall comply with all of the following:

1. Be at least eighteen years of age.

2. Be a resident of this state for income tax purposes and claim the individual's residence in this state as the individual’s primary residence on state and federal tax returns.

3. Except as provided in section 41‑368, subsection A, paragraph 2, never have been convicted of a felony.

4. Keep as a reference a manual that is approved by the secretary of state and that describes the duties, authority and ethical responsibilities of electronic notaries public.

G. An applicant for appointment and commission as an electronic notary shall complete an application form prescribed by the secretary of state. Except for the applicant’s name, physical business address, electronic business address and business telephone number, all other information on the application is confidential and shall not be disclosed to any person other than the applicant, the applicant's personal representative or an officer or employee of the federal government or this state or its political subdivisions who is acting in an official capacity. The secretary of state shall use the information contained on the application only for carrying out the purposes of this article.

H. The state or any of its political subdivisions may pay the fees and costs for the commissioning of an electronic notary who is an employee of this state or any of its political subdivisions and performs electronic notarial services in the course of the electronic notary's employment or for the convenience of public employees. END_STATUTE

Sec. 2. Section 41-355, Arizona Revised Statutes, is amended to read:

START_STATUTE41-355. Duties; electronic notarization in presence of electronic notary

A. Electronic notaries public shall perform the following electronic notarial acts when requested:

1. Take electronic acknowledgments.

2. Administer oaths and affirmations relating to electronic documents and electronic notarial acts.

3. Perform jurats relating to electronic documents and electronic notarial acts.

4. Educate notary service electronic signature certificate applicants about the responsibilities and consequences of the use of the certificate.

5. Administer an oath or affirmation that the notary service electronic signature certificate applicant understands the responsibilities and consequences of using a notary service electronic signature certificate to sign a notary service electronic document and that the electronic signature certificate has the same legal force and effect as any notarial act made before a notary public pursuant to article 2 of this chapter.

6. Register the notary service electronic signature certificate applicant for the issuance of a notary service electronic signature certificate that has a maximum useful life of two years.

B. A notarized electronic document that is completed in the presence of an electronic notary consists of the following:

1. A complete electronic document.

2. A signature or mark that is affixed to the document by the signer.

3. A time and date statement that is contained within the electronic notary token.

4. An electronic notary token that is affixed by the electronic notary to the document.

C. On completion of the notarized electronic document, any change to any of the elements prescribed in subsection B of this section invalidates the notarized electronic document.

D. An electronic notary public shall:

1. Keep, maintain and protect as a public record a journal of all official acts performed by the notary as prescribed in section 41‑360 41-361 and in the form prescribed by the secretary of state.

2. Provide and keep the materials and processes to create an electronic notary token as approved by the secretary of state.

3. Authenticate with the electronic notary token all official acts and affix the date of the expiration of the notary's commission as an electronic notary on every document that the electronic notary electronically signs.

4. Respond to any requests for information and comply with any investigations that are initiated by the secretary of state or the office of the attorney general. END_STATUTE

Sec. 3. Section 41-364, Arizona Revised Statutes, is amended to read:

START_STATUTE41-364. Change of address; lost or stolen electronic journal or seal; civil penalty

A. Within thirty days after the change of an electronic notary's mailing, residential or electronic address, the electronic notary shall deliver to the secretary of state, by certified mail or other means providing a receipt, a signed notice of the change that provides both the old and new addresses.

B. Within ten days after the loss or theft of an official journal or any materials or processes used in creating an electronic notary token or registering notary service electronic certificate applicants, the electronic notary shall deliver to the secretary of state, by certified mail or other means providing a receipt, a signed notice of the loss or theft. The electronic notary also shall inform the appropriate law enforcement agency in the case of theft.

C. If an electronic notary fails to comply with subsection A or B, the electronic notary has failed to fully and faithfully discharge the duties of an electronic notary and the secretary of state may impose against the electronic notary a civil penalty in an amount the secretary of state prescribes by rule. The electronic notary shall pay any civil penalty imposed by the secretary of state pursuant to this subsection before the renewal of the notary's commission. END_STATUTE

Sec. 4. Section 41-365, Arizona Revised Statutes, is amended to read:

START_STATUTE41-365. Name change; new commission; failure to comply

A. An electronic notary whose name changes shall apply for new methods and materials issued to the electronic notary to create electronic notary tokens under the new name.

B. An electronic notary shall notify the secretary of state within thirty days after the notary's change of name. If the electronic notary fails to comply with this subsection, the electronic notary has failed to fully and faithfully discharge the duties of an electronic notary. END_STATUTE

Sec. 5. Section 41-368, Arizona Revised Statutes, is amended to read:

START_STATUTE41-368. Grounds for refusal, suspension or revocation of commission

A. The secretary of state may refuse to appoint any person as an electronic notary public or may suspend or revoke the commission of any electronic notary public for any of the following reasons:

1. Substantial and material misstatement or omission in the application for an electronic notary public commission that is submitted to the secretary of state.

2. Conviction of a felony unless restored to civil rights, or of a lesser offense involving moral turpitude or of a nature that is incompatible with the duties of an electronic notary public. A conviction after a plea of no contest is deemed to be a conviction for purposes of this paragraph.

3. Revocation, suspension, restriction or denial of a professional license if that action was for misconduct, dishonesty or any cause that substantially relates to the duties or responsibilities of an electronic notary public.

4. Failure to discharge fully and faithfully any of the duties or responsibilities required of an electronic notary public.

5. The use of false or misleading advertising in which the electronic notary public has represented that the electronic notary public has duties, rights or privileges that the electronic notary public does not possess by law.

6. Charging more than the fees authorized by statute or rule.

7. The commission of any act involving dishonesty, fraud or deceit with the intent to substantially benefit the electronic notary public or another person or to substantially injure another person.

8. Failure to complete the electronic acknowledgment or electronic jurat at the time the electronic notary's signature and seal are affixed to the document.

9. Failure to administer the oath or affirmation required at the time of performing an electronic jurat for an individual.

10. Execution of any electronic notarial certificate by the electronic notary public containing a statement known by the electronic notary public to be false.

11. The return for insufficient funds or any other reason for nonpayment of a check issued for fees to the secretary of state.

12. Notarizing a document that does not contain a notarial certificate.

B. If an application is denied, the secretary of state shall notify the applicant within thirty days after receipt of the application and shall state the reasons for the denial.

C. The secretary of state may suspend the commission of an electronic notary for at least thirty days and for not more than one hundred eighty days.

D. If a person has had an electronic notary commission in this state revoked, the secretary of state may refuse to appoint the person as an electronic notary for four years after the date of the revocation.

C. e. On revocation or suspension of an electronic notary public's commission, the secretary of state shall give notice to the electronic notary public and shall provide the person with notice of the opportunity for a hearing on the revocation or suspension pursuant to chapter 6, article 10 of this title. The revocation or suspension of an electronic notary public commission is an appealable agency action. END_STATUTE

Sec. 6. Title 41, chapter 2, article 3, Arizona Revised Statutes, is amended by adding section 41-370, to read:

START_STATUTE41-370. Complaints; investigations; failure to respond

A. Any person may make a complaint to the office of the secretary of state regarding an electronic notary. The secretary of state shall receive any complaints and shall provide notice of those complaints to the office of the attorney general. The office of attorney general shall investigate and take action on all complaints involving any allegation of a violation of this article.

B. An electronic notary's failure to respond to an investigation is a failure by the notary to fully and faithfully discharge the responsibilities and duties of an electronic notary. END_STATUTE