Legislature(2019 - 2020)BELTZ 105 (TSBldg)
03/20/2020 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| HB124 | |
| SB8 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 123 | TELECONFERENCED | |
| *+ | HB 124 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 8 | TELECONFERENCED | |
HB 124-ELECTRONIC DOCUMENTS AND NOTARIZATION
2:03:46 PM
CHAIR COGHILL announced consideration of 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."
2:04:39 PM
REPRESENTATIVE MATT CLAMAN, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 124, said the bill would establish a
secure process for remote online notarization to facilitate
commercial transactions in Alaska. It would add substance to the
words, "Alaska is open and ready for business." The
legislature's current work to address the COVID-19 pandemic
highlights the importance of this legislation. It makes it
possible for individuals who are self-quarantined to safely
execute legal documents from their homes and in the electronic
presence but not the physical presence of a notary public.
He said HB 124 was presented initially to the House Judiciary
Committee in April 2019. Since then, his office has met
regularly with the lieutenant governor's office to ensure that
the bill aligns with the strengths and the daily operations of
the Notary Commission. He expressed gratitude to Senator Hughes
who carried the Senate version, which also sits in this
committee. Notaries are responsible for supervising the signing
of documents and attesting to the authenticity of a document and
the identities of the parties involved. Setting up a system for
a remote, online notarization is particularly useful in Alaska
given the state's immense size and the fact that many
communities are not connected by roads.
REPRESENTATIVE CLAMAN stated that commercial transactions within
the state are often delayed as parties ship documents back and
forth for the purpose of notarization. HB 124 would allow
individuals to have documents notarized from their own homes and
offices without these delays.
2:06:23 PM
REPRESENTATIVE CLAMAN offered an example of how the bill will
help Alaskans. He described a military family that was in the
process of selling the family home while the husband was
deployed overseas. The wife could sign documents, but because
she was not able to get the documents to her husband, the family
lost the sale. If remote notarization had been in place, the
husband could have had the document notarized from the base
where he was stationed.
REPRESENTATIVE CLAMAN said given the sensitive nature of
notarized documents, any updates to notarial law must maintain
the integrity and security of the process. HB 124 will update
Alaska's notarial law to keep the process secure and make sure
that it is consistent with notarial law in the growing number of
states that permit remote online notarization. Use of electronic
records in commercial, governmental, and personal transactions
is becoming increasingly prevalent in Alaska and around the
world. This bill will allow Alaskans to keep up with these
trends and perform notarizations with greater ease. This bill
will help strengthen Alaska by creating a process for remote
online notarization and improving efficiency and convenience of
transactions in the state.
2:08:06 PM
DAVID CLARK, Staff, Representative Matt Claman, Alaska State
Legislature, Juneau, Alaska, said HB 124 updates Alaska's
current notarial laws by giving notaries the option to perform
online notarizations for remotely located individuals. It would
also make sure that these online notarizations remain secure.
Through a series of meetings with the Notary Commission in the
Office of the Lieutenant Governor, the sponsor has made the
following revisions to HB 124:
• Section 3: This section was added to establish that
the Uniform Electronic Transactions Act (AS 09.80)
applies to AS 40.17, and the Department of Natural
Resources shall accept notarial acts as described in
section 10 of this bill.
• Section 5 Amends AS 44.50.034(a): Raises the bond
requirement for a notary public applicant from $1,000
to $2,500.
• Section 10: Similar to section 13 of version A, except
that it establishes three requirements for identifying
a remotely located individual: (1) viewing a
government-issued identification card, (2) credential
analysis of the government-issued identification card,
and (3) one type of identity proofing.
• Section 11: Subparagraph (b) is amended to add that a
notary public must maintain at least one journal in a
tangible medium to chronicle all remote notarial acts.
The notary public may also keep one or more electronic
journals to chronicle remote notarial acts.
Additionally, because the Lieutenant Governor's office
has never retained or stored notary journals, it
removes subparagraph (f), which would allow a notary
public to transmit a journal to the Office of the
Lieutenant Governor for retention, and subparagraph
(g), which would require the estate to transmit the
notary public's journal(s) to the Office of the
Lieutenant Governor upon death or adjudication of
incompetence of the notary public.
2:09:59 PM
CHAIR COGHILL asked whether the companion bill includes these
changes.
SENATOR HUGHES answered that she was aware of and did not object
to the changes. She commented that Representative Claman's staff
did a good job updating members on the changes.
CHAIR COGHILL asked invited testifiers to comment on the bill.
2:10:58 PM
TERRY BRYAN, President, Yukon Title Company; Member, Alaska Land
Title Association, Anchorage, Alaska, spoke in support of HB
124, which would allow online notarization. He thanked staff and
the Lieutenant Governor's office. He said that it is a pleasure
to see bipartisan coordination and cooperation. He offered his
view that HB 124 is good legislation.
2:12:04 PM
CHAIR COGHILL noted that Senator Reinbold had joined the meeting
via teleconference.
2:12:12 PM
MR. BRYAN said the current regulations for notarization have
been incorporated into the bill. He has vetted the process
through the Lieutenant Governor's office, the Department of
Natural Resources Recorder's Office, the Alaska Real Estate
Commission, and the Alaska real estate and mortgage lending
industries while confirming the compatibility of HB 124 with
other states that have enacted or proposed similar legislation.
He pointed out that this bill is not exclusively for real estate
or insurance related industries. It also supports all segments
of Alaska's economy and consumers that use or require a notary
process. At present, 23 states have enacted remote online
notarization statutes and 11 more are in the process of doing
so. He offered his view, which is shared by the stakeholders,
that passage of HB 124 will improve the flow of commerce while
enhancing consumer protections. This need has been brought to
the forefront by the current pandemic. The development of
appropriate and necessary regulations by the Lieutenant
Governor's office should be eased by his office's current
engagement with the Association of Secretaries of State, who
have developed a detailed set of recommended guidelines and
parameters for writing and creating regulations. This could help
provide a template for implementation of this legislation while
taking into consideration the needs and uniqueness of Alaska and
its citizens. The Alaska Land Title Association and other
industry associations stand in support of HB 124, as currently
written.
2:14:10 PM
CHAIR COGHILL asked if the industry supported the increase in
the bonding requirements.
REPRESENTATIVE CLAMAN deferred to Mr. Bryan to answer. He noted
that these bonds are referred to as signature bonds or unsecured
bonds, but that is not seen as a barrier to performing work.
MR. BRYAN answered that the Alaska Land Title Association is
very comfortable with the increase, which has not been changed
in many years. It is representative of bond requirements in
other states.
2:15:56 PM
SENATOR KIEHL asked how the process to notarize signatures would
work remotely. When the bill speaks to credential analysis of an
identification and the definition of identity proofing, it
speaks to a third person assisting the notary. He asked for a
sense of model regulations and how the process would work.
REPRESENTATIVE CLAMAN deferred to Mr. Bryan to describe the
regulations. He commented that the regulations will be
consistent with other states and not simply developed in Alaska.
MR. BRYAN said the Alaska Land Title Association worked with the
sponsor to provide the Lieutenant Governor the flexibility to
tailor the regulations and maintain compatibility with other
states and yet allow the addition of other restrictions related
to third-party analysis. He explained that the state could
contract for electronic software programs to be used for
credentialed analyses. For example, a person could hold real
driver license identification up to a cell phone or camera which
can provide a high level of authenticity, much greater than the
visual eye. There are several models of identity proofing,
including using private knowledge. For example, one question
might ask which of five addresses was used for a car loan. A
follow-up question could ask the person to select addresses the
person is familiar with, including one with perhaps a childhood
address. A certain set of private questions would be used to
increase confidentiality and protection using information not
normally found in a person's wallet or at one's home.
SENATOR KIEHL said that gives him a better idea of the process
and regulations.
2:20:26 PM
CHAIR COGHILL asked how often notaries have been called for
mistakes in identifying someone.
MR. BRYAN answered that he is not aware of any in his 20 plus
years and his office has over 40 notaries. It has not been an
issue.
2:21:07 PM
SENATOR MICCICHE asked why the requirement on page 7, lines [1-
4] in subsection (c) is only for remotely located individuals
outside the U.S., but it is not required for domestic.
(c) If a notarial act is performed under this
section, the certificate of notarial act required
under AS 44.50.060 must state that the notarial act
was performed using communication technology. A
statement is sufficient if it states substantially as
follows: "This notarial act involved the use of
communication technology."
REPRESENTATIVE CLAMAN explained that much of the language came
from the Uniform Laws Act.
CHAIR COGHILL pointed out that the provision on page 6,
[paragraph](1)(A), (B), and (C) has the same requirement for
domestic notarizations.
SENATOR MICCICHE said he didn't read it that way.
REPRESENTATIVE CLAMAN clarified that the language on page 5,
lines 29-30 requires the use of communication technology.
2:23:25 PM
SENATOR MICCICHE said the language on page 6 talks about
remotely located individuals outside the U.S. and the language
on page 7 in subsection (c) requires a statement that says,
"This notarial act involved the use of communication
technology." He said he believes that requirement only applies
to individuals living outside the state but not for domestic
notarial acts.
REPRESENTATIVE CLAMAN said he did not have an explanation.
CHAIR COGHILL asked Mr. Bryan if he had an answer.
MR. BRYAN said the industry understands that there would not be
any differentiation between those living in Alaska, in the Lower
48, or outside the U.S, such that the same verification that
identifies it as an electronic notarial action would be a
requirement. He said that he did not notice the omission but the
intent is for the process to be the same.
CHAIR COGHILL commented that the language needs to conform.
2:25:18 PM
REPRESENTATIVE CLAMAN agreed with Mr. Bryan that it appears to
be a drafting oversight. He referred to page 5, noting there is
clearly a requirement in subsection (a) that an individual can
comply by using communication technology. He said a person could
not comply with this section without using communication
technology.
CHAIR COGHILL referred to page 6, lines 16-18, which read, "(2)
the notary public is able reasonably to confirm that a record
before the notary public is the same record in which the
remotely located individual made a statement or on which the
individual executed a signature;". He mentioned the language in
paragraph (B) and questioned whether he was missing the point.
2:26:15 PM
SENATOR MICCICHE restated that a foreign individual must state
on the record that the notarial act involved the use of
communication technology but that doesn't seem to be required
for a domestic notarial act. He said he didn't understand why
more would be required for a foreign transaction than a domestic
transaction because the notary wouldn't necessarily know the
identity of someone in the next town any more than one located
on the other side of the world.
2:27:03 PM
SENATOR KIEHL said his reading was slightly different. The
section related to remotely located individuals located outside
of the U.S. is found [on page 6], Sec. 44.50.075](b)(4), which
has its own subparagraphs (A) and (B). The statement that the
notarial act was performed using communication technology is
located in [Sec. 44.50.075](c). He said we jumped from
subsection (b)(4)(B) to subsection (c) and he believes
subsection (c) applies to all notarial acts performed remotely.
2:27:50 PM
CHAIR COGHILL suggested asking the Legislative Legal drafter to
review the language in Sec. 44.50.075.
REPRESENTATIVE CLAMAN acknowledged that Senator Kiehl had a
point. The language on page 5, line 29 says that complying with
the law would be under AS 44.50.062(5)(A). The language on page
6, line 6, under subsection (b)[(1)(B)], also says complying
with the law would be under AS 44.50.062(5)(A). But the language
in subsection (c) on page 7 talks about a notarial act under AS
44.50.060, which is a slightly different statute.
He referred to Sec. 44.50.062(5)(A) starting on page 3 that has
to do with the signature and Sec. 44.50.060 on page 3 that
applies to the foreign notarization and opined that the
distinction between the foreign and the domestic notarial
transactions is that each one references a different section of
statute.
CHAIR COGHILL related his understanding that AS 44.50.060
relates to the duties of a notary public. The new section would
add language to certify that the tangible copy is accurate.
REPRESENTATIVE CLAMAN agreed.
2:30:03 PM
SENATOR MICCICHE said he believes that Senator Kiehl is correct.
In Section 10, subsection (a) states that a remotely located
individual may comply with AS 44.50.062(5)(A) by using
communication technology to appear before a notary public.
Subsection (b), beginning on page 5, line 31, includes
substantial language but separates out the foreign located
individual. Subsection (c) [on page 7 lines 1-4] is still part
of Section 10, and it applies to foreign and domestic
transactions. He said he was satisfied that all notarial actions
that would be performed electronically using communication
technology will require that statement.
2:31:02 PM
CHAIR COGHILL asked Mr. Bryan if he agreed.
MR. BRYAN responded that he was not able to track the cites, but
he agreed that [requiring that statement for all transactions]
was the intention.
2:32:08 PM
SENATOR HUGHES said she was satisfied with the bill.
2:32:11 PM
SENATOR REINBOLD said she too was satisfied with the bill.
2:32:23 PM
CHAIR COGHILL solicited a motion.
SENATOR MICCICHE said that he does not have any concern with the
bill and he supports electronic conveyance of notarization.
2:32:59 PM
SENATOR MICCICHE moved to report HB 124, work order 31-LS0627\S,
from committee with individual recommendations and attached zero
fiscal note(s).
CHAIR COGHILL found no objection and SSHB 124 was reported from
the Senate Judiciary Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 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 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 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 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 2.28.20.PDF |
SJUD 3/20/2020 1:30:00 PM |
HB 124 |
| SB 8 Support Letter - AMIA - 2.25.20.pdf |
SJUD 3/18/2020 1:30:00 PM SJUD 3/20/2020 1:30:00 PM |
SB 8 |
| SB 8 Amendment S.4 3.20.20.pdf |
SJUD 3/20/2020 1:30:00 PM |
SB 8 |
| SB 8 Amendment S.5 3.20.20.pdf |
SJUD 3/20/2020 1:30:00 PM |
SB 8 |