Legislature(2019 - 2020)GRUENBERG 120

02/24/2020 01:00 PM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 124 ELECTRONIC DOCUMENTS AND NOTARIZATION TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 201 DEFENSE OF PUB. OFFICER: ETHICS COMPLAINT TELECONFERENCED
Moved CSHB 201(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
          HB 124-ELECTRONIC DOCUMENTS AND NOTARIZATION                                                                      
                                                                                                                                
1:03:16 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN announced that the  first order of business would be                                                               
SPONSOR SUBSTITUTE  FOR HOUSE BILL  NO. 124, "An Act  relating to                                                               
the   recording   of   documents;  relating   to   notaries   and                                                               
notarization,  including  notarial  acts performed  for  remotely                                                               
located individuals; and providing for an effective date."                                                                      
                                                                                                                                
CHAIR CLAMAN  passed the gavel  to Representative Stutes  for the                                                               
duration of the presentation of SSHB 124.                                                                                       
                                                                                                                                
1:04:17 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN  introduced SSHB 124,  as prime sponsor.   He stated                                                               
that SSHB 124 would establish  a secure process for remote online                                                               
notarization  to  facilitate commercial  transactions  throughout                                                               
the  state.   He announced  that  since the  introduction of  the                                                               
proposed legislation  on April 15,2019,  his office had  met with                                                               
the  lieutenant  governor  and representatives  from  the  notary                                                               
commission to  ensure that the  proposed legislation  would align                                                               
with  and   strengthen  the  daily   operations  of   the  notary                                                               
commission.                                                                                                                     
                                                                                                                                
CHAIR  CLAMAN   explained  that  notaries  are   responsible  for                                                               
supervising  the  signing  of  documents  and  attesting  to  the                                                               
authenticity of the  documents and the identities  of the parties                                                               
involved.  He  said that a system for  remote online notarization                                                               
would  be  particularly  useful  in  Alaska,  given  the  state's                                                               
immense size  and the fact that  many of its communities  are not                                                               
connected  by road.   Currently,  commercial transactions  within                                                               
Alaska often  necessitate delays  as parties ship  documents back                                                               
and forth for  the purpose of notarization.  He  stated that SSHB
124 would  allow individuals to have  documents notarized without                                                               
delays  from their  homes  and  offices.   He  remarked that  the                                                               
sensitive  nature  of  notarized   documents  requires  that  any                                                               
updates to notarial law must  maintain the integrity and security                                                               
of  the process.   He  added that  SSHB 124  would update  Alaska                                                               
notarial law with adequate provisions  to keep the process secure                                                               
and consistent  with notarial law  in a growing number  of states                                                               
which have adopted standards for remote online notarization.                                                                    
                                                                                                                                
CHAIR  CLAMAN  stated  that  the use  of  electronic  records  in                                                               
commercial,  governmental, and  personal transactions  has become                                                               
increasingly  prevalent in  Alaska  and throughout  the world  in                                                               
recent years.  He remarked that  SSHB 124 would allow Alaskans to                                                               
keep up with trends and  perform notarizations with greater ease.                                                               
He summarized that SSHB 124  would strengthen Alaska's economy by                                                               
creating a  process for remote online  notarization and improving                                                               
the efficiency and convenience of transactions in the state.                                                                    
                                                                                                                                
1:06:35 PM                                                                                                                    
                                                                                                                                
DAVID  CLARK, Staff,  Representative  Matt  Claman, Alaska  State                                                               
Legislature,  explained  changes  made  from  the  original  bill                                                               
version on  behalf of Representative  Matt Claman,  prime sponsor                                                               
of  SSHB 124.   He  stated that  SSHB 124  would update  Alaska's                                                               
current notarial laws by allowing  notaries the option to perform                                                               
online  notarizations   for  remotely  located   individuals  and                                                               
ensuring  that online  notarizations remain  secure.   He pointed                                                               
out  that   through  a  series   of  meetings  with   the  notary                                                               
commission,  which is  housed  in the  Office  of the  Lieutenant                                                               
Governor,  the following  modifications  have been  made to  SSHB
124.   He explained that  Section 3 is  a new section  that would                                                               
provide  for AS  09.80 (Uniform  Electronic Transactions  Act) to                                                               
apply  to  AS  40.17.    He said  that  this  would  require  the                                                               
Department  of  Natural  Resources  (DNR)  to  accept  electronic                                                               
notarial   acts  that   are   performed   for  remotely   located                                                               
individuals.                                                                                                                    
                                                                                                                                
MR.  CLARK stated  that Section  5 would  raise the  current bond                                                               
requirement for a notary public  applicant from $1,000 to $2,500.                                                               
He  pointed  out  that  Section   10  would  strengthen  identity                                                               
confirmation  for  remote  notarial  acts  through  a  three-step                                                               
process.    First, a  client  must  furnish a  government  issued                                                               
identification card.  Second, the  notary public must ensure that                                                               
a  third  party  has  confirmed the  accuracy  of  the  furnished                                                               
government issued identification card.   Third, the notary public                                                               
would be  required to use  at least  one type of  remote identity                                                               
proofing.                                                                                                                       
                                                                                                                                
MR. CLARK explained  that Section 11 would be  amended to require                                                               
a notary  public to maintain at  least one journal in  a tangible                                                               
medium  to chronical  all remote  notarial acts.   He  added that                                                               
Section 11  would also allow a  notary public to maintain  one or                                                               
more  electronic journals  in  a secure  electronic  medium.   He                                                               
remarked  that the  lieutenant governor  has  never retained  nor                                                               
stored  notary  journals  prior  to  this.    He  remarked  that,                                                               
accordingly, subsection (f) and  subsection (g) were removed from                                                               
the  Sponsor  Substitute; subsection  (f)  would  have allowed  a                                                               
notary  public   to  store  his/her  journals   with  the  notary                                                               
commission, and subsection  (g) would have required  the state to                                                               
transmit the  notary public's journals  to the  notary commission                                                               
upon death or adjudication of incompetence.                                                                                     
                                                                                                                                
1:08:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES asked the bill  sponsor to walk her through                                                               
what  the  notarization  process  would  be  under  the  proposed                                                               
legislation.   She  asked whether  she  would go  to an  existing                                                               
notary if she  was in a remote location, such  as Kodiak, and she                                                               
needed to send a notarized document to Anchorage.                                                                               
                                                                                                                                
1:09:07 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN  replied that  in this  situation the  process would                                                               
probably  require an  individual to  go  to a  location that  has                                                               
online communication and could  communicate via secure electronic                                                               
means between  Kodiak and an  office in Anchorage.   He explained                                                               
that  the  individual would  have  the  document physically  with                                                               
him/her to sign in Kodiak.   In response to a follow-up question,                                                               
he remarked  that it would be  like a video networking  app, such                                                               
as FaceTime,  but he  thinks it  would be more  secure.   He said                                                               
that he  suspects that if someone  were physically in front  of a                                                               
notary in  Kodiak, he/she would  still have to sign  the document                                                               
in  that  location,  in  which  case  the  electronic  notarizing                                                               
wouldn't  come  into  play  as the  physical  document  would  be                                                               
signed.                                                                                                                         
                                                                                                                                
CHAIR CLAMAN  expressed that SSHB  124 would allow for  people to                                                               
sign a  document over a secure  connection with a notary  that is                                                               
in a  different location.   He clarified that when  an individual                                                               
is  signing a  document, the  notary's job  is to  attest to  the                                                               
validity of  the signature  on the document.   He  explained that                                                               
under a  remote notarization,  the document would  have to  be in                                                               
front  of the  individual signing  it, but  the signing  would be                                                               
done over  the video  link and  the notary  would observe  from a                                                               
different location.   The  notary would  confirm the  identity of                                                               
the individual and issue a  certification saying the document was                                                               
signed and witnessed by the notary.                                                                                             
                                                                                                                                
1:11:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked whether  Chair Claman envisioned that                                                               
this would  take place  in locations that  do not  have notaries.                                                               
She  remarked that  many of  the remote  areas that  do not  have                                                               
notaries, and  would benefit most from  the proposed legislation,                                                               
also have  a problem with  Internet service, and she  thinks that                                                               
the system might not necessarily work  in areas where it would be                                                               
most critical.                                                                                                                  
                                                                                                                                
CHAIR  CLAMAN  replied   that  Representative  LeDoux's  question                                                               
identified a  broader issue  with electronic  technology; without                                                               
Internet  service   it  won't  be  possible   to  utilize  remote                                                               
notarizations.    He remarked  that  these  individuals would  be                                                               
facing the  same challenges they are  today, even if they  do not                                                               
have  a  notary  in  their  location.   He  summarized  that  the                                                               
proposed  legislation would  not  solve all  those problems,  but                                                               
there would be many times  when the Internet service is available                                                               
and remote notarization from another  location would be possible,                                                               
thus providing more access to notarization for remote locations.                                                                
                                                                                                                                
REPRESENTATIVE LEDOUX  asked whether  every current  notary would                                                               
be required  to have a  special encrypted access to  the Internet                                                               
for the remote notarization process.                                                                                            
                                                                                                                                
CHAIR CLAMAN  replied that  this would not  be a  requirement for                                                               
notaries.    As  an  example,   he  recalled  that  when  he  was                                                               
practicing law with  a private law firm, a lot  of the assistants                                                               
were notaries  public, but they  did not want to  notarize anyone                                                               
except for  those that came into  the office.  He  suggested that                                                               
he expects there to be many  notaries who would choose not to get                                                               
involved  in the  electronic certification  process.   He  stated                                                               
that other notaries, such as  those that work for title companies                                                               
and have  to routinely notarize  title documents  for properties,                                                               
would  be   very  likely   to  be  set   up  for   online  remote                                                               
notarization, as  they would be  much more likely to  come across                                                               
scenarios in which someone in a  remote location can't get to the                                                               
location to sign the documents.                                                                                                 
                                                                                                                                
REPRESENTATIVE LEDOUX  asked whether  special equipment  would be                                                               
required for the individuals in  remote locations wishing to have                                                               
a document notarized electronically.                                                                                            
                                                                                                                                
CHAIR  CLAMAN  answered  that  he would  let  someone  with  more                                                               
expertise on that topic answer the question.                                                                                    
                                                                                                                                
1:15:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  repeated her  question for Terry  Bryan to                                                               
answer.                                                                                                                         
                                                                                                                                
1:16:02 PM                                                                                                                    
                                                                                                                                
TERRY BRYAN,  President, Yukon Title  Company, answered  that the                                                               
fine  tuning  of  the  equipment  that  would  be  necessary  for                                                               
electronic notarizations  would be the result  of the regulations                                                               
that would be  written by the Office of  the Lieutenant Governor;                                                               
however,  he  said  that  in   the  25  states  where  electronic                                                               
notarizations  have  been  implemented,  a  traditional  Internet                                                               
connection on a device with  video capability would be sufficient                                                               
for the communication.   He remarked that a cell  phone camera or                                                               
laptop camera  would suffice in  most situations.  He  added that                                                               
notarization   could   be    accomplished   through   audio-video                                                               
communication,  whether it  be on  a fishing  boat, in  a hunting                                                               
camp, or even in Afghanistan.                                                                                                   
                                                                                                                                
1:17:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN   asked  whether   there  had   been  any                                                               
discussion  on  how  the electronic  notarization  process  could                                                               
potentially be abused,  and whether there would be a  way to undo                                                               
a notarization after the fact if it was found to be fraudulent.                                                                 
                                                                                                                                
1:17:49 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN  replied that  Section [10] of  SSHB 124  proposes a                                                               
three-step requirement  be met during the  identification process                                                               
to satisfy that the individual is  who he/she says he/she is.  He                                                               
remarked that  he thinks it  would be  in the regulations  that a                                                               
fraudulent notarization could be undone.                                                                                        
                                                                                                                                
1:18:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN remarked  that he would like  to know more                                                               
about how the  reversal process might work.  He  recalled a story                                                               
in which "someone  had been deemed dead according  to the courts,                                                               
and then  the courts weren't  recognizing them because  they were                                                               
dead," and  he said  that he  would like  to make  sure something                                                               
like that wouldn't happen.                                                                                                      
                                                                                                                                
1:18:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES returned the gavel to Chair Claman.                                                                       
                                                                                                                                
1:19:20 PM                                                                                                                    
                                                                                                                                
CHAIR  CLAMAN,  after  ascertaining  that there  was  no  further                                                               
discussion  from   the  committee,  opened  invited   and  public                                                               
testimony.                                                                                                                      
                                                                                                                                
1:20:12 PM                                                                                                                    
                                                                                                                                
ERROL  CHAMPION,  Broker,  Chair, Legislative  Issues  Committee,                                                               
Alaska Association  of Realtors, offered testimony  in support of                                                               
SSHB 124  [letter of support  included in committee packet].   He                                                               
complimented Chair Claman on the work  he had done to improve the                                                               
integrity and security of  the proposed legislation, specifically                                                               
within  Section  10.   He  pointed  out that  the  identification                                                               
process would now require the  following three steps:  First, the                                                               
viewing  of  a  government issued  identification  card;  second,                                                               
credential  analysis  of  the  government  issued  identification                                                               
card;  and third,  one type  of identity  proofing.   He remarked                                                               
that while  there was still  possibility for an error,  he thinks                                                               
these were  important improvements  which had  been made  to SSHB
124.   He remarked that  he is positive the  proposed legislation                                                               
would be a good think for  Alaskans, and he urged the adoption of                                                               
SSHB 124.                                                                                                                       
                                                                                                                                
CHAIR CLAMAN  noted that his  reference earlier to Section  6 had                                                               
been mistaken; Section  10 was the section to which  he had meant                                                               
to refer.                                                                                                                       
                                                                                                                                
1:21:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  asked whether Mr. Champion  could provide                                                               
the committee with  an idea of the impact SSHB  124 would have on                                                               
his industry if it were to pass.                                                                                                
                                                                                                                                
1:21:55 PM                                                                                                                    
                                                                                                                                
MR.  CHAMPION  replied that  the  proposed  legislation would  be                                                               
utilized  by people  in his  industry  quite frequently.   As  an                                                               
example, he recalled a situation  in which someone trying to sell                                                               
a home had the deal fall through,  because he was in the Far East                                                               
on active  duty in the  military and could  not find a  notary to                                                               
sign the deed.   He remarked that today's society  is very mobile                                                               
and often,  when a  transaction is  ready to  be closed,  the two                                                               
parties required  to sign are  located far apart,  which requires                                                               
hard copies  and takes  up to  a few extra  days.   He summarized                                                               
that SSHB  124 would  expedite that process  and bring  Alaska in                                                               
step  with approximately  35 other  states  that currently  allow                                                               
electronic notarization.                                                                                                        
                                                                                                                                
REPRESENTATIVE EASTMAN asked Mr.  Champion whether he could speak                                                               
to the  possibility of  allowing individuals,  such as  a service                                                               
member in the  military, to use a notary from  another state that                                                               
already allows electronic notarization.                                                                                         
                                                                                                                                
MR. CHAMPION  answered that  this has been  an option  all along,                                                               
and often  when an  individual is in  another state  which offers                                                               
electronic  notarization this  can  be accommodated.   He  stated                                                               
that  in remote  areas where  there  is no  notary available,  it                                                               
results in a  situation in which that person's only  option is to                                                               
present  themselves  physically in  front  of  a notary,  and  it                                                               
cannot be done.                                                                                                                 
                                                                                                                                
1:23:50 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN commented  that the authority of a  notary public to                                                               
notarize  a  signature  is  a   jurisdictional  matter,  and  "in                                                               
California somebody  could notarize  my signature  in California,                                                               
but  I'm  not sure  that  they  could  notarize my  signature  in                                                               
Alaska."                                                                                                                        
                                                                                                                                
1:24:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EASTMAN repeated  his  previous  question to  Mr.                                                               
Champion.                                                                                                                       
                                                                                                                                
1:24:44 PM                                                                                                                    
                                                                                                                                
MR. CHAMPION  answered that he  did not feel qualified  to answer                                                               
that question,  as it seems  to be  a judicial matter  of whether                                                               
the  state  would recognize  a  notarized  signature recorded  in                                                               
another jurisdiction, which he doubts.                                                                                          
                                                                                                                                
1:24:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX asked whether someone  would be able to use                                                               
the electronic  notarization system  in another country  that has                                                               
notaries,  in   order  to  get   around  lengthy   processes  and                                                               
requirements.    She explained  that  her  understanding is  that                                                               
getting  a document  authorized  in a  foreign  country and  then                                                               
having it  recognized in the U.S.  is very involved, and  "by the                                                               
time  you've  done that,  you  know,  your deal's  probably  long                                                               
blown."                                                                                                                         
                                                                                                                                
1:26:06 PM                                                                                                                    
                                                                                                                                
MR.  CHAMPION replied  that he  is not  a title  officer, but  he                                                               
thinks that  electronic notarization would avail  itself over any                                                               
kind of legal requirement for  a notarized signature and could be                                                               
used anytime its  needed, even in countries  where a notarization                                                               
system doesn't exist.                                                                                                           
                                                                                                                                
1:27:18 PM                                                                                                                    
                                                                                                                                
HOWARD  HANCOCK, Chief  Title Officer,  Fidelity Title  Agency of                                                               
Alaska, LLC, offered  testimony in support of SSHB  124, which he                                                               
described  is in  sync and  consistent  with model  bills on  the                                                               
topic  that have  been passed  or in  the legislative  process in                                                               
other  states around  the country.   He  stated that  his company                                                               
expects that several  of its staff members  would be commissioned                                                               
as  remote online  notaries, which  would eliminate  the need  to                                                               
mail  out documents  and  streamline the  real  estate title  and                                                               
closing process.   He strongly  urged the support and  passage of                                                               
SSHB 124.                                                                                                                       
                                                                                                                                
1:28:46 PM                                                                                                                    
                                                                                                                                
TERRY  BRYAN addressed  a previous  question from  Representative                                                               
LeDoux  regarding  electronic  notarization  for  individuals  in                                                               
foreign  countries.   He  stated  that SSHB  124  would allow  an                                                               
Alaska notary,  who is commissioned  as an electronic  notary, to                                                               
notarize anyone  electronically worldwide.   He remarked  that if                                                               
someone  were on  a fishing  charter or  located internationally,                                                               
then the  requirement would  be for  the notary  to be  an Alaska                                                               
notary,  present  in   the  state  of  Alaska  at   the  time  of                                                               
notarization.    He expressed  that  this  would facilitate  real                                                               
estate  and other  transactions  and would  improve  the flow  of                                                               
commerce in  Alaska dramatically.   He stated  that approximately                                                               
20 percent  of the  real estate  transactions conducted  by Yukon                                                               
Title  Company  require  a  "mail  out" in  which  the  buyer  or                                                               
seller's  documents  are  sent  out  via  mail  in  order  to  be                                                               
notarized at that  individual's location.  He  remarked that this                                                               
adds several days to many transactions.                                                                                         
                                                                                                                                
1:30:38 PM                                                                                                                    
                                                                                                                                
JORDAN  BARTELS,  Title  Officer, Yukon  Title  Company,  offered                                                               
testimony in support  of SSHB 124.  He reiterated  what Mr. Bryan                                                               
had  said about  the mail  out requirement  for approximately  20                                                               
percent  of the  transactions processed  by Yukon  Title Company.                                                               
He remarked  that SSHB 124  would streamline the  titling process                                                               
for many Alaskan's who live  in remote locations, and he strongly                                                               
supports the proposed legislation.                                                                                              
                                                                                                                                
1:31:16 PM                                                                                                                    
                                                                                                                                
CHAIR CLAMAN, after  ascertaining that there was no  one else who                                                               
wished to testify, closed public testimony on SSHB 124.                                                                         
                                                                                                                                
CHAIR  CLAMAN announced  that SSHB  124  would be  held over  for                                                               
further review.                                                                                                                 
                                                                                                                                

Document Name Date/Time Subjects
HB 124 v. S 2.17.2020.PDF HJUD 2/24/2020 1:00:00 PM
HJUD 2/26/2020 1:00:00 PM
HB 124
HB 124 v. A 4.12.2019.PDF HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 2/24/2020 1:00:00 PM
HB 124
HB 124 Sponsor Statement v. S 2.20.2020.pdf HJUD 2/24/2020 1:00:00 PM
HJUD 2/26/2020 1:00:00 PM
SJUD 3/20/2020 1:30:00 PM
HB 124
HB 124 Sponsor Statement v. A 4.12.2019.pdf HJUD 2/24/2020 1:00:00 PM
HB 124
HB 124 Sectional Analysis v. S 2.21.2020.pdf HJUD 2/24/2020 1:00:00 PM
HJUD 2/26/2020 1:00:00 PM
SJUD 3/20/2020 1:30:00 PM
HB 124
HB 124 Explanation of Changes v. A to v. S 2.21.2020.pdf HJUD 2/24/2020 1:00:00 PM
HJUD 2/26/2020 1:00:00 PM
SJUD 3/20/2020 1:30:00 PM
HB 124
HB 124 Supporting Document - Letters Receieved by 2.21.2020.pdf HJUD 2/24/2020 1:00:00 PM
HJUD 2/26/2020 1:00:00 PM
SJUD 3/20/2020 1:30:00 PM
HB 124
HB 124 Fiscal Note DNR-RO 2.14.2020.pdf HJUD 2/24/2020 1:00:00 PM
HJUD 2/26/2020 1:00:00 PM
HB 124
HB 201 Work Draft Committee Substitute v. S 2.18.2020.pdf HJUD 2/24/2020 1:00:00 PM
HB 201
HB 201 v. U 2.10.2020.PDF HJUD 2/10/2020 1:00:00 PM
HJUD 2/17/2020 1:00:00 PM
HJUD 2/24/2020 1:00:00 PM
HB 201
HB 201 Sponsor Statement 2.10.2020.pdf HJUD 2/10/2020 1:00:00 PM
HJUD 2/17/2020 1:00:00 PM
HJUD 2/24/2020 1:00:00 PM
HB 201
HB 201 Summary of Changes v. U to v. S 2.24.2020.pdf HJUD 2/24/2020 1:00:00 PM
HB 201
HB 201 Fiscal Note LAW-CIV 2.8.20.pdf HJUD 2/17/2020 1:00:00 PM
HJUD 2/24/2020 1:00:00 PM
HB 201