REVISED
ARIZONA STATE SENATE
RESEARCH STAFF
|
LAURA BENITEZ |
|
LEGISLATIVE RESEARCH ANALYST COMMERCE COMMITTEE Telephone: (602) 926-3171 |
TO: MEMBERS OF THE SENATE
COMMERCE COMMITTEE
DATE: March 3, 2020
SUBJECT: Strike everything amendment to S.B. 1226, relating to notarial act; revised uniform law
Purpose
Effective July 1, 2021, adopts the 2018 Revised Uniform Law on Notarial Acts to modify the governance of notaries public and notarial acts. Contains requirements for initiatives and referendums (Proposition 105).
Background
The Secretary of State (SOS) appoints notaries public to serve four-year terms. Notaries public must submit an application with the SOS and file an official oath and bond in an amount determined by the SOS within 20 days of appointment (A.R.S. § 41-312). The powers and duties of a notary include taking acknowledgements, administering oaths and affirmations, performing jurats and performing certified copies. Notaries public may only perform these duties if: 1) the signer is in the presence of the notary at the time of notarization; 2) the instrument is signed in a language that the notary understands; 3) and the notary receives satisfactory evidence of the identity of the signer. Notarial acts performed by notaries verify only the identity of the signer of a document and not the truthfulness, accuracy or validity of the document (A.R.S. § 41-311).
Notarial commissions,
duties and acts may be performed electronically, and documents may be performed
with an electronic signature. Beginning July 1, 2020, a notary public may
perform a notarial act by means of an electronic device or process for a notary
and remotely located individual to communicate (Laws 2019, Chapter
56). The SOS must adopt rules that establish standards for secure
implementation of electronic notarization by January 1, 2020 (A.R.S.
§ 41-352).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Notarial Officers
1. Extends the statutory authority to perform notarial acts in Arizona to:
a) a judge, clerk or deputy clerk of an Arizona court of record;
b) an individual licensed to practice law in Arizona; and
c) an individual authorized by Arizona law to perform the specific act.
2. Specifies that notarial acts by statutorily outlined officers outside of Arizona are recognized if performed:
a) in another state;
b) under the authority of and in the jurisdiction of a federally recognized Indian tribe;
c) under federal law;
d) under the authority of and in the jurisdiction of a foreign state or constituent unit; or
e) under the authority of a multinational or international governmental organization.
3. Extends statutory recognition to notarial acts performed by an individual in the military service or who performs duties under military service authority if authorized under federal law, rather than a commissioned officer in the U.S. armed forces who performs notarial acts for outlined individuals.
4. Deems the signature and title of an individual in Arizona to be prima facie evidence that the individual holds the designated title and the signature is genuine when performing a notarial act.
5. Deems the signature and title of a notarial officer outside of Arizona but within the United States to:
a) be prima facie evidence, rather than sufficient evidence, that the individual holds the designated title and the signature is genuine when performing a notarial act; and
b) conclusively establish the officer's authority to perform the notarial act.
6. Specifies that authority to perform notarial acts is conclusively established if a title of office and indication of notarial authority in a foreign state appear in a digest of foreign law or in a list customarily used as a source for that information.
7. Specifies that the following conclusively establish that the signature of the notarial officer is genuine and the officer holds the indicated office:
a) an apostille issued by a foreign state party to the Hague Convention of October 5, 1961;
b) a consular authentication issued by an individual designated by the U.S. Department of State as a notarizing officer for performing overseas notarial acts and attached to the record.
8. Defines foreign state.
Authority to Perform or Refuse Notarial Acts
9. Authorizes a notarial officer to perform a notarial act authorized by any Arizona law.
10. Applies, to any notarial officer, the prohibition on a notary public performing a notarization if the notary is party to or has direct material benefit, with respect to a record:
a) to which the notarial officer or the officer's spouse is a party; and
b) in which the notarial officer or the officer's spouse has a direct beneficial interest.
11. Deems voidable a notarial act performed in violation of the notarial conflict prohibition.
12. Allows a notarial officer to certify that a tangible copy of an electronic record is an accurate copy.
13. Allows a notarial officer to refuse to perform a notarial act if the officer is not satisfied that:
a) the individual executing the record is competent or has the capacity to execute the record; or
b) the individual makes the signature knowingly and voluntarily.
14. Authorizes a notarial officer to refuse to perform a notarial act unless otherwise prohibited by law.
Requirements for Notarial Acts
15. Requires a notarial officer who takes an acknowledgment of a record or a verification of a statement on oath or affirmation to determine, from personal knowledge or satisfactory evidence of the individual's identity, that the:
a) individual appearing and making the acknowledgement or verification before the officer has the claimed identity; and
b) signature on the record or the verified statement is the individual's signature.
16. Requires a notarial officer who takes verification of a statement on oath or affirmation to determine, to the best of the notarial officer's knowledge, that the record containing the verified statement is complete.
17. Requires a notarial officer who witnesses or attests to a signature to determine, from personal knowledge or satisfactory evidence of the individual's identity, that the individual appearing before the officer and signing the record has the identity claimed.
18. Requires a notarial officer who certifies or attests a copy of a record or item to determine that the copy is a full, true and accurate transcription or reproduction.
19. Prohibits a notarial officer from certifying or attesting a copy of an Arizona public record, except for copies of a notary public's journal on written request as outlined.
20. Specifies that a notarial officer who makes or notes a protest of a negotiable instrument must determine the matters identified and certified in the protest as outlined.
Appearance and Identification
21. Requires the personal appearance before a notarial officer of:
a) an individual making a statement in or executing a signature on a record in a notarial act; and
b) a translator involved in a notarial act.
22. Determines a notarial officer to have personal knowledge of an individual's identity if the individual is personally known to the officer through dealings that provide reasonable certainty that the individual has the identity claimed, rather than over a sufficient time to eliminate reasonable doubt.
23. Allows an alternative form of government identification to meet the satisfactory evidence of identity requirement if the identification:
a) contains the individual's signature or photograph and physical description, rather than both as well as the individual's height, weight, hair color and eye color; and
b) is satisfactory to the notarial officer.
24. Determines a notarial officer to have satisfactory evidence of an individual's identity for real estate conveyance or financing if the officer can identify the individual by:
a) an unexpired passport issued by a national government other than the United States (U.S.) if accompanied by an unexpired visa or other U.S.-issued documentation that is necessary to establish the individual's legal presence in the U.S.; or
b) an unexpired identification card deemed acceptable by the U.S. Department of Homeland Security to establish legal presence in the U.S. if accompanied by required supporting documents.
25. Authorizes a notarial officer to require additional information or identification credentials necessary to assure the notarial officer of the individual's identity.
26. Repeals requirements specific to notaries public and subjects notaries public to the requirements of the 2018 Revised Uniform Law on Notarial Acts.
Certificate of Notarial Act
27. Requires a notarial act to be evidenced by a certificate (notarial certificate).
28. Requires a notarial certificate to:
a) be executed contemporaneously with the notarial act;
b) be signed and dated by the notarial officer and, if by a notary public, be signed in the same manner as on file with the Secretary of State;
c) identify the jurisdiction in which the notarial act is performed;
d) contain the notarial officer's title; and
e) indicate the date of commission expiration, if the notarial officer is a notary public.
29. Requires an official stamp to be affixed to a notarial certificate regarding a tangible record if:
a) a notary public performs the notarial act; or
b) a notarial officer other than a notary public performs the notarial act and the certificate contains the outlined information.
30. Allows an official stamp regarding an electronic record to be attached to or logically associated with a notarial certificate if a notarial officer performs the notarial act and the certificate contains the outlined information.
31. Deems sufficient a notarial certificate that contains the outlined information and official stamp, if applicable, and:
a) is in the statutory short form;
b) is in a form otherwise allowed by Arizona law or by applicable law in the jurisdiction where the notarial act was performed; or
c) sets forth the notarial officer's actions and the actions meet statutory requirements.
32. Specifies that, by executing a notarial certificate, a notarial officer certifies compliance with statutory requirements and determinations relating to the performance of notarial acts, an individual's personal appearance before the notarial officer and evidence of identity and other Arizona law.
33. Prohibits a notarial officer from affixing the officer's signature to or logically associating it with a notarial certificate until the notarial act is performed.
34. Requires, for a notarial act regarding a tangible record, a notarial certificate to be part of or securely attached to the record.
35. Replaces statutory short forms of acknowledgement with prescribed short forms for notarial certificates that must contain:
a) for an acknowledgement in an individual capacity, the state and county, the date of the record, the names of individuals making the acknowledgement and the notarial officer's signature, stamp, title of office and commission expiration;
b) for an acknowledgement in a representative capacity, the state and county, the date of the notarial act, the names of individuals making the acknowledgement, the type of authority, name of party on behalf of whom the record was executed, the notarial officer's signature, stamp, title of office and commission expiration;
c) for a verification on oath or affirmation, the state and county, the date of the oath or affirmation, the names of individuals making the statement and the notarial officer's signature, stamp, title of office and commission expiration;
d) for witnessing or attesting a signature, the state and county, the date of the signing or attestation, the names of individuals and the notarial officer's signature, stamp, title of office and commission expiration;
e) for certifying a copy of a record, the state and county, certification that the record is a true and correct copy of a record and the name of who possesses the record, the date of certification and the notarial officer's signature, stamp, title of office and commission expiration; and
f) for certifying a tangible copy of an electronic record, the state and county, certification that the copy of the record is an accurate copy, the title and date of the record, the number of pages, the date of certification and the notarial officer's signature, stamp, title of office and commission expiration.
36. Specifies that the short form notarial certificates that are sufficient if completed with the required information and, if applicable, an official stamp.
Official Stamp
37. Transfers the statutory requirements and restrictions relating to a notary public's official seal to requirements and restrictions for a notary public's official stamp (official stamp) and stamping device.
38. Requires an official stamp to be capable of being copied with the record to which it is attached.
39. Requires an electronic image of an official stamp created by an electronic stamping device (electronic stamp) to be legible when reproduced with the record with which it is logically associated.
40. Prohibits a notary public from affixing or attaching the official stamp over any signature on the record that is the subject of the notarial act.
41. Considers the official stamp to be an official seal of office.
42. Requires a notary public to disable an electronic stamping device in a manner that renders it unusable on resignation, revocation or expiration of the notary public's commission, rather than to destroy the method of electronic seal attachment on commission termination or revocation.
Electronic Records
43. Allows a notary public to select one or more tamper-evident technologies to perform notarial acts for electronic records (electronic notarial acts).
44. Prohibits a person from requiring a notary public to perform an electronic notarial act with a technology the notary public has not selected.
45. Requires a notary public to notify the SOS that the notary will perform electronic notarial acts and identify the technology the notary intends to use.
46. Requires the technology to conform to any SOS rules for approval of technology and requires the SOS to approve the use of a technology.
47. Requires a county recorder to accept, as satisfying a requirement that a record be an original, a tangible copy of an electronic record that contains a notarial certificate if the notarial officer certifies the tangible copy is an accurate copy of the electronic record.
Remote Online Notarizations
48. Requires a notary public to notify the SOS, before the initial act, that the notary public will be performing notarial acts with respect to remotely located individuals (online remote notarizations) and identify the technologies the public notary intends to use.
49. Requires the communication technology and identity proofing to conform to any SOS established standards for approval of the technology or identity proofing, rather than requiring a notary public to ensure communication technology is secure from unauthorized interception.
50. Modifies the methods a notary public may use to meet the satisfactory evidence of identity requirement for a remotely located individual by:
a) adding the option to use two different types of identity proofing; and
b) removing the method of credential analysis of an outlined identification credential the individual remotely presents and identity proofing of the individual.
51. Requires the notary public or person acting on behalf of the notary public to create and retain an audiovisual recording, rather than an audio and visual recording, of the notarial act.
52. Excludes online remote notarizations from the authorization for a notary public to not require, after the initial act, satisfactory evidence of identity or the individual to sign the journal if a notary performs more than one notarization for an individual during a six-month period.
53. Removes the requirement that a notary public take reasonable steps to:
a) ensure the integrity, security and authenticity of remote online notarizations;
b) maintain and protect a backup of required recordings and electronic journals for remote online notarizations.
54. Removes the specification that an electronic journal be in a permanent, tamper-evident format.
55. Removes the requirement that a journal entry for a remote online notarization include the time of the notarial act.
56. Removes the requirement that a journal entry for a notarial act performed for a remotely located individual include:
a) if the individual's identity is based on credential analysis and identity proofing, a description of the verification process results and the credential presented; or
b) if the individual's identity is based on the oath or affirmation of a credible witness, the credible witness's full name and address and outlined information relating to the verification of a witness's identity.
57. Repeals the specifications that:
a) Arizona laws determine the validity of a remote online notarization regardless of a remotely located individual's physical location;
b) a notary public authorized to perform remote online notarizations is subject to statute governing notaries public; and
c) statutes governing Remote Online Notarization control in the case of conflict with other law.
58. Adds to the definition of communication technology that the technology facilitate communication with a remotely located individual who has a vision, hearing or speech impairment, when necessary and consistent with applicable law.
59. Removes the definitions of credential analysis, electronic record, electronic seal, remote online notarization or remote online notarial act, and remote presentation relating to remote online notarizations.
Validity of Notarial Acts
60. Specifies that the failure of a notarial officer, rather than only a notary public, to perform a duty or meet a statutory requirement does not invalidate a notarial act, rather than does not invalidate only a remote online notarization.
61. Specifies that a notarial act's validity does not prevent an aggrieved person from seeking to invalidate or seek other remedies relating to a record or transaction.
62. Specifies that a notarial act is voidable if the notary public:
a) takes an acknowledgment of record executed by a corporation of which the notary public is a stockholder, director, officer or employee where the notary public is a party to the record; or
b) the notary protests a negotiable instrument owned or held for collection by the corporation where the notary is a party to the instrument.
Commission as a Notary Public
63. Replaces SOS authority to appoint notaries public with a requirement that the SOS issue a commission to a qualified applicant who complies with oath of office and bond requirements.
64. Adds, to requirements for commission as a notary public, that an applicant:
a) not be disqualified to receive a commission under outlined grounds to deny a commission; and
b) pass an examination, if required by the SOS.
65. Replaces SOS authority to require applicants present proof of notary training course attendance with the authority to require to pass an examination administered by the SOS or an approved entity:
a) an applicant who does not hold a commission;
b) who is renewing a commission; or
c) who has a suspended commission.
66. Allows, if the SOS requires an examination, the SOS or approved entity to offer to applicants a course of study that covers laws, rules, procedures and ethics relevant to notarial acts.
67. Allows the SOS to assess a fee for an examination to be deposed in the Notary Education Fund.
68. Requires an applicant to submit, to the SOS, assurance in the form of a $5,000 surety bond, rather than file a bond in an amount prescribed by the SOS within 20 days of notice of appointment, that must:
a) cover acts performed during the notary public's commission; and
b) be in the form prescribed by the SOS.
69. Deems the surety or issuing entity liable under the assurance if a notary public violates any Arizona law relating to public notaries.
70. Requires the surety or issuing entity to give the SOS 30 days' notice before cancelling the assurance and to notify the SOS within 30 days of making payment to claimant.
71. Stipulates that a notary public may only perform notarial acts during the period a valid assurance is on file with the SOS.
72. Prohibits the employer of a notary public from cancelling the assurance if the notary public leaves employment.
73. States that a commission authorizes the notary public to perform notarial acts and does not provide any immunity or benefit conferred by Arizona law on public officials or employees.
Grounds for Action on Commission
74. Replaces and modifies grounds for commission refusal, revocation or suspensions with SOS authority to deny, refuse to renew, revoke, suspend or impose a condition on a notary public for any act or omission demonstrating a lack of honesty, integrity or competence, including:
a) failure to comply with the 2018 Uniform Law on Notarial Acts;
b) fraudulent, dishonest or deceitful, rather than substantial and material, misstatement or omission in submitted notary public application;
c) a conviction, including after a plea of no contest, of a felony or crime involving fraud, dishonesty or deceit, rather than any felony or lesser offense of a nature incompatible with public notary duties;
d) a finding or admission of liability in any legal proceeding or disciplinary action based on fraud, honesty or deceit, rather than the commission of such acts with the intent to benefit the notary public or substantially injure another person;
e) denial, refusal to renew, revocation, suspension or conditioning of a notary public commission in another state, rather than an action of a professional license for any cause that substantially relates to notary public duties;
f) violation of SOS notary public rules
g) failure to maintain the assurance bond;
h) failure to respond to a request for information or to comply with an investigation initiated by the SOS or the Attorney General; and
i) prior revocation of an Arizona commission as a notary public.
75. Specifies that the SOS's authority to take action on a commission does not prevent a person from seeking and obtaining other criminal or civil remedies.
Prohibited Acts and Notice
76. Specifies that commission as a notary public does not authorize an individual to:
a) assist in drafting legal records, give legal advice or otherwise practice law;
b) act as an immigration consultant or expert on immigration matters;
c) represent a person in a judicial or administrative proceeding relating to immigration;
d) receive compensation for performing any of the outlined activities.
77. Prohibits a notary public from:
a) using the term notario or notario publico, if not a licensed attorney;
b) advertising or representing that the attorney may assist in drafting legal records, give legal advice or otherwise practice law;
c) engaging in false or deceptive advertising; and
d) withholding access to or possession of an original record a person provides in seeking performance of a notarial act.
78. Requires any advertising notary who is not an attorney, rather than one who advertises services in a language other than English, to include in all advertising and in each language used in the advertisement a prescribed statement or alternative statement the SOS authorizes a notice that the notary:
a) is not a licensed attorney;
b) is not allowed to draft legal records, give advice on legal matters, including immigration; or
c) charge a fee for the outlined activities.
79. Requires a notary to prominently display or provide at the place of notarial act performance the required statement if the advertising:
a) is in a form that is not broadcast or print media or the internet; and
b) does not allow inclusion of the statement because of size.
80. Applies the current statutory penalty of violation of the required statement in advertising to violations of the modified requirement.
Acknowledgements
81. Repeals requirements specific to acknowledgements and subjects the performance of acknowledgments to the 2018 Revised Uniform Law on Notarial Acts.
82. Subjects acknowledgments relating to for profit and nonprofit corporations to requirements of the 2018 Revised Uniform Law on Notarial Acts, rather than the Uniform Recognition of Acknowledgements Act.
Conveyances and Deeds
84. Removes the condition, for a deed or conveyance filed in the appropriate county recorder's office to be deemed as duly acknowledged if the instrument contains a defect, omission or informality in the acknowledgement certificate, that the deed or conveyance be filed for over 10 years.
85. Removes the condition, for an instrument filed in the appropriate county recorder's office that affects real property to be deemed as duly acknowledged if the instrument contains a defect, omission or informality in the acknowledgement certificate, that the instrument be filed for over one year.
86. Prohibits a county recorder from recording an instrument that affects real property unless the instrument has been acknowledged according to statutory requirements, rather than deeming an instrument to be lawfully recorded if acknowledged according to statutory requirements.
87. Specifies that the acknowledgement of a deed or conveyance of real property must be made before an officer authorized to take acknowledgements by the 2018 Uniform Law on Notarial Acts.
88. Allows a county recorder to lawfully record an instrument affecting real property if the instrument was acknowledged according to the 2018 Uniform Law on Notarial Acts.
SOS Administration and Rules
89. Requires the SOS to maintain an electronic database of notaries public through which a person may verify a notary public's authority.
90. Allows the electronic database to indicate whether a notary public has notified the SOS that the notary public performs notarial acts for electronic record or remotely located individuals.
91. Authorizes the SOS to adopt rules to implement the Revised Uniform Law on Notarial Acts.
92. Requires, by July 1, 2021, the SOS to adopt rules relating to notarial acts for remotely located individuals which may:
a) prescribe the means of a remote notarial act using communication technology;
b) establish communication technology and identity proofing standards;
c) establish requirements or procedures to approve providers of communication technology and the process of identity proofing; and
d) establish standards and a period for audiovisual recording retention.
93. Requires, by July 1, 2021, the SOS to adopt rules relating to notarial acts performed for electronic records and prohibits rules from requiring or according greater legal status to a specific technology or technical specification.
94. Allows the rules to:
a) prescribe the manner of performing notarial acts;
b) ensure any change to or tampering with a record bearing a notarial certificate is self-evident;
c) ensure integrity in electronic records or signatures;
d) prescribe the process of granting, renewing, conditioning, denying, suspending or revoking a notary public commission;
e) prevent fraud or mistake in the performance of notarial acts;
f) establish the process for approving and accepting bonds and other forms of assurance; and
g) provide for the administration of a notary public examination.
95. Requires the SOS, before adopting, amending or repealing remote notarial act or electronic record rules, to consider:
a) the most recent standards regarding remote notarial acts adopted by national standard-setting organizations and recommendations of the National Association of Secretaries of State;
b) standards, practices and customs of other jurisdictions with substantially similar laws relating to remote notarial acts; and
c) views of government officials, entities and other interested persons.
Miscellaneous
96. Allows a notary public to keep a paper journal or one or more electronic journals to chronicle notarial acts performed regarding electronic records.
97. Allows an individual who is physically unable to sign a record to direct another individual to sign the record and requires the notarial officer to insert the following or words of similar import:
Signature affixed by (name of other individual) at the direction of (name of individual).
98. Specifies that the requirements of this legislation modify, limit and supersede the federal Electronic Signature in Global and National Commerce Act, except for specified exemptions outlined in federal code, including court orders and notices
99. Continues, until expiration, a notary public's commission that is in effect on January 1, 2021.
100. Subjects, to the Revised Uniform Law on Notarial Acts, a notary public performing notarial acts and a notary public renewing a commission after January 1, 2021.
Definitions
101. Defines notarial officer, representative capacity, official stamp, person, record, sign, signature, stamping device and verification on oath or affirmation.
102. Expands the definitions of notarial act or notarization to:
a) replace specified duties of a notary public with any act a notarial officer may perform as authorized by Arizona law;
b) include acts performed with respect to a tangible or electronic record;
c) remove the specification that the act verifies only the signer's identity and not the truthfulness, accuracy or validity of the document; and
103. Redefines electronic signature relating to notarial acts as an electronic symbol, sound or process attached to or logically associated with a record, that is executed or adopted by an individual with the intent to sign the record.
104. Redefines acknowledgment as a declaration by an individual before a notarial officer that the individual has signed a record for the stated purpose and, if signed in a representative capacity, with proper authority as the act of the individual or entity identified in the record.
105. Applies the definitions of electronic and state relating to Remote Online Notarizations to the Revised Uniform Law on Notarial Acts.
106. Removes the definitions of copy certification, incomplete document, jurat, notarial certificate or certificate, oath or affirmation, satisfactory evidence of identity and venue.
107. Conforms statutory references relating to qualifying contributions in the Citizens' Clean Elections Act, subject to the affirmative vote of at least three-fourths of the members of each house of the Legislature (Proposition 105).
108. Makes technical and conforming changes.
109. Becomes effective July 1, 2021.
Revisions
1. Corrects provisions relating to a county recorder's responsibility in recording instruments affecting real property.
2. Adds provisions to reflect the removal of:
a) certain requirements for a notary public's journal entries relating to remote online notarizations; and
b) specifications relating to the statutes that govern a notary public who performs remote online notarizations.