Legislature(2019 - 2020)GRUENBERG 120

04/15/2019 01:00 PM JUDICIARY

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01:02:30 PM Start
01:03:09 PM Confirmation Hearing: Commission on Judicial Conduct
01:04:25 PM Confirmation Hearing: State Commission for Human Rights
01:13:06 PM HB124
02:37:39 PM HB14
03:02:04 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: State TELECONFERENCED
Commission for Human Rights
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
Heard & Held
+ Consideration of Governor's Appointees: TELECONFERENCED
Commission on Judicial Conduct
          HB 124-ELECTRONIC DOCUMENTS AND NOTARIZATION                                                                      
1:13:06 PM                                                                                                                    
CHAIR CLAMAN announced  that the next order of  business would be                                                               
HOUSE  BILL  NO.  124,  "An  Act relating  to  the  recording  of                                                               
documents; relating  to notaries and notarization;  and providing                                                               
for an effective date."                                                                                                         
CHAIR CLAMAN passed the gavel to Vice Chair LeDoux.                                                                             
1:13:35 PM                                                                                                                    
The committee took an at-ease from 1:13 p.m. to 1:14 p.m.                                                                       
1:14:16 PM                                                                                                                    
CHAIR CLAMAN introduced HB 124 as  prime sponsor.  He read from a                                                               
prepared statement,  which read as follows  [original punctuation                                                               
     Good afternoon. For the record my name is Matt Claman,                                                                     
      State Representative for House District 21. I would                                                                       
     like  to  thank you  all  for  hearing House  Bill  124                                                                    
     HB 124  establishes a secure process  for remote online                                                                    
     notarization to  facilitate commercial  transactions in                                                                    
     the state.                                                                                                                 
     Notaries  are responsible  for supervising  the signing                                                                    
     of documents and attesting to  both the authenticity of                                                                    
     a  document as  well  as the  identity  of the  parties                                                                    
     involved.  Setting  up a  system  to  allow for  remote                                                                    
     online  notarization is  particularly useful  in Alaska                                                                    
     given our state's  immense size and the  fact that many                                                                    
     of  our  communities  are not  connected  by  road.  At                                                                    
     present,  commercial  transactions   within  the  state                                                                    
     often necessitate delays as  the parties ship documents                                                                    
     back and forth for the  purpose of notarization. HB 124                                                                    
     would  allow individuals  to  have documents  notarized                                                                    
     without  these delays,  from the  comfort of  their own                                                                    
     Given the  sensitive nature of notarized  documents, it                                                                    
     is critical  that any updates to  notarial law maintain                                                                    
     the  integrity  and security  of  the  process. HB  124                                                                    
     adopts   language  directly   from   two  Uniform   Law                                                                    
     Commission  Acts  to  ensure  that  updates  to  Alaska                                                                    
     notarial law  include adequate  provisions to  keep the                                                                    
     notarial process  secure and  that Alaska  notarial law                                                                    
     is consistent  with notarial law in  the growing number                                                                    
     of  states that  have  adopted  Uniform Law  Commission                                                                    
     standards for remote online notarization.                                                                                  
     The   use   of   electronic  records   in   commercial,                                                                    
     governmental,  and  personal  transactions  has  become                                                                    
     increasingly prevalent  in Alaska and around  the world                                                                    
     in  recent years.  HB 124  allows Alaskans  to keep  up                                                                    
     with  these  trends   and  perform  notarizations  with                                                                    
     greater ease.  By creating a process  for remote online                                                                    
     notarization, improving the  efficiency and convenience                                                                    
     of  transactions in  the state,  HB 124  will open  new                                                                    
     opportunities   for  commerce   in   Alaska  and   help                                                                    
     strengthen our state's economy.                                                                                            
     With  that,  I will  turn  it  over  to my  staff  Ceri                                                                    
     Godinez to explain the bill in greater detail.                                                                             
1:16:08 PM                                                                                                                    
CERI  GODINEZ, Staff,  Representative Matt  Claman, Alaska  State                                                               
Legislature,  conducted a  sectional analysis  of HB  124 with  a                                                               
prepared statement,  which read as follows  [original punctuation                                                               
     To  the Chair  and  the Committee,  thank  you for  the                                                                    
     opportunity to testify. For the  record my name is Ceri                                                                    
     Godinez, and I'm staff to Representative Claman.                                                                           
     House Bill  124 updates  Alaska's notarial law  for the                                                                    
     digital  age by  allowing  notaries  to perform  online                                                                    
     notarizations  for  remotely  located  individuals  and                                                                    
     including   provisions    to   ensure    these   online                                                                    
     notarizations are secure.                                                                                                  
     Section  1  establishes  an electronic  document  of  a                                                                    
     conveyance as an acceptable  equivalent for an original                                                                    
     conveyance or certified copy of the conveyance.                                                                            
     Section  2 establishes  the  equivalence of  electronic                                                                    
     notarized documents  with those produced on  a tangible                                                                    
     medium and  allows recorders to accept  tangible copies                                                                    
     of electronic records.                                                                                                     
     Section 3  adds conforming language to  reflect changes                                                                    
     made in Section 2.                                                                                                         
     Section   4  requires   that   recorders  comply   with                                                                    
     standards set  by the  Department of  Natural Resources                                                                    
     and  allows  the  recorder to  receive,  index,  store,                                                                    
     archive, and transmit electronic documents.                                                                                
     Section 5  adds three new  sections to AS  40.17, which                                                                    
     relates   to  the   recording  of   documents:  Section                                                                    
     40.17.800,  which  requires   that  the  Department  of                                                                    
     Natural   Resources   adopt  standards   to   implement                                                                    
     provisions  relating to  electronic recording;  Section                                                                    
     40.17.810, which  requires that consideration  be given                                                                    
     to  promoting   uniformity  among  states   with  these                                                                    
     provisions;  and Section  40.17.820, which  establishes                                                                    
     the   relationship  between   this   chapter  and   the                                                                    
     Electronic Signatures and National Commerce Act.                                                                           
     Section 6  changes the definition of  "document" to the                                                                    
     definition found in Uniform Law Commission language.                                                                       
     Section   7   adds    definitions   for   "electronic,"                                                                    
     "electronic document," and "electronic signature."                                                                         
     Section   8   establishes    "Uniform   Real   Property                                                                    
     Electronic  Recording Act"  as the  title for  sections                                                                    
     added in Sections 2, 4, and 5 of the bill.                                                                                 
     Section 9  adds certifying that  a tangible copy  of an                                                                    
     electronic   record  is   an  accurate   copy  of   the                                                                    
     electronic  record to  the duties  a notary  public may                                                                    
     Section 10 adds conforming  language to reflect changes                                                                    
     made in Section 13 of this bill.                                                                                           
     Section 11 requires that  the lieutenant governor adopt                                                                    
     regulations to carry out the purposes of this chapter.                                                                     
     Section  12  requires   that  the  lieutenant  governor                                                                    
     provide  standards  for  communication  technology  and                                                                    
     identity  proofing. The  lieutenant governor  may adopt                                                                    
     regulations   including   provisions  prescribing   the                                                                    
     process  for  performing  notarial acts,  ensuring  the                                                                    
     integrity  of  the   process,  and  preventing  against                                                                    
     Section 13  allows an  individual to  use communication                                                                    
     technology as a substitute for  appearing in front of a                                                                    
     notary, establishes  a set of procedures  a notary must                                                                    
     follow in  order to verify  the identity of  a remotely                                                                    
     located   individual  and   perform  a   remote  online                                                                    
     notarization, and  requires that the notary  follow any                                                                    
     standards set by the lieutenant governor.                                                                                  
     Section 14  requires that the notary  maintain a single                                                                    
     journal  chronicling all  notarial  acts they  perform,                                                                    
     specifies  the  information  each  journal  entry  must                                                                    
     contain,  and  specifies   storage  procedure  for  the                                                                    
     Section 15  allows the notary to  select the technology                                                                    
     they use  to perform a  notarial act and  requires that                                                                    
     they notify  the lieutenant governor of  the technology                                                                    
     they will be using.                                                                                                        
     Section  16  establishes  that   failure  to  meet  the                                                                    
     requirements outlined in this  bill does not invalidate                                                                    
     a notarial act and that  the validity of a notarial act                                                                    
     does  not   prevent  an  individual  from   seeking  to                                                                    
     invalidate the  record nor from seeking  other remedies                                                                    
     based on law.                                                                                                              
     Section  17 establishes  the relationship  between this                                                                    
     chapter  and  the  Electronic Signatures  and  National                                                                    
     Commerce Act.                                                                                                              
     Section 18 adds to the  definition of "notarial act" to                                                                    
     reflect that an act may  be performed with respect to a                                                                    
     tangible or electronic record.                                                                                             
     Section  19  adds  definitions  for  "acknowledgement,"                                                                    
     "communication  technology," "electronic,"  "electronic                                                                    
     signature," "identity  proofing," "in  a representative                                                                    
     capacity,"  "notarial   officer,"  "record,"  "remotely                                                                    
     located individual," "sign," and "signature."                                                                              
     Section 20  establishes that Sections  1-8 of  this Act                                                                    
     apply to  electronic signatures and  documents received                                                                    
     by  a  recorder  on  or after  the  effective  date  of                                                                    
     Sections 1-8. And that Sections  9-19 apply to notarial                                                                    
     acts  performed  on  or after  the  effective  date  of                                                                    
     Sections 9-19.                                                                                                             
     Section 21  allows the Department of  Natural Resources                                                                    
     to  adopt  regulations  to implement  changes  made  by                                                                    
     Sections  1-8 and  allows  the  lieutenant governor  to                                                                    
     implement changes made by sections 9-19.                                                                                   
     Section 22 clarifies that this  Act does not affect the                                                                    
     validity  of documents  recorded  before the  effective                                                                    
     date of Sections  1-8 or the validity  of notarial acts                                                                    
     performed before the effective date of Sections 9-19.                                                                      
     Section  23 provides  an immediate  effective date  for                                                                    
     Section 21.                                                                                                                
     Section  24 provides  an effective  date of  January 1,                                                                    
     2020 for all other sections.                                                                                               
     Thank you  for considering  House Bill 124  today. With                                                                    
     that,  we're   happy  to   answer  any   questions  the                                                                    
     Committee may have.                                                                                                        
1:21:28 PM                                                                                                                    
REPRESENTATIVE KOPP said  it appears that HB  124 would modernize                                                               
existing statutes to  allow for current technology.   He compared                                                               
electronic notarization to  telemedicine technology and commented                                                               
that it would allow for the internet  to be used as a vehicle for                                                               
commerce.  He asked if that is primarily the intent of HB 124.                                                                  
CHAIR CLAMAN  answered "yes."   He said  HB 124 would  also bring                                                               
Alaska in line  with what other jurisdictions are  doing, so that                                                               
electronic  notarization is  not  hindered by  different laws  in                                                               
different states.                                                                                                               
REPRESENTATIVE  KOPP  discussed  the  process  through  which  he                                                               
purchased    his   house    and   recalled    signing   documents                                                               
electronically.  He  asked what in HB 124 is  different from what                                                               
was   previously   allowable    regarding   real   estate   title                                                               
CHAIR  CLAMAN  said  the  contracts  Representative  Kopp  signed                                                               
electronically  were likely  not required  to be  notarized.   He                                                               
suggested   that   a   notary    was   probably   involved   when                                                               
Representative Kopp  signed the  actual documents related  to the                                                               
title transfer.                                                                                                                 
1:24:06 PM                                                                                                                    
REPRESENTATIVE WOOL  asked if HB  124 would only apply  for those                                                               
in remote  locations, or whether  someone who lives near  a title                                                               
agency could instead elect to utilize electronic notarization.                                                                  
MS.  GODINEZ said  any individual  would be  able to  utilize the                                                               
service regardless of where he/she lives.                                                                                       
1:24:42 PM                                                                                                                    
REPRESENTATIVE EASTMAN asked for  clarification of language found                                                               
in  line 6  on page  13 [section  18], which  he explained  would                                                               
change the  definition of "notarial act"  by including electronic                                                               
records.   He noted that  AS 44.50.060 does not  include language                                                               
directing a  notary to do  anything, citing  the word "may."   He                                                               
asked, "If I am a notary public  ... am I going to be required to                                                               
accept this  electronic record?   Or is  it optional?"   He asked                                                               
what the legal significance of "directed" is in AS 44.50.200(2).                                                                
CHAIR  CLAMAN  said his  office  did  not research  the  existing                                                               
language  that is  not  being  changed.   He  noted  that if  the                                                               
statute  does not  require anything  of a  notary public  and the                                                               
language is  "may," then  the status quo  would remain  in place.                                                               
With  regard to  the electronic  record, he  mentioned that  some                                                               
states have  required all notaries to  become electronic notaries                                                               
while others  have allowed  it to be  a choice.   He said  if the                                                               
State of  Alaska (SOA) were  to give notaries the  choice between                                                               
being  "a paper  notary versus  an electronic  notary," then  the                                                               
electronic  requirements  would  only  apply  to  the  electronic                                                               
1:27:26 PM                                                                                                                    
REPRESENTATIVE EASTMAN asked if it  is the prime sponsor's intent                                                               
 to infer a  right or an ability  of someone to claim  to be able                                                               
to accomplish a  notarial act electronically.    He asked whether                                                               
a person who  is not able to accomplish  that electronic notarial                                                               
act could claim that his/her rights were not honored.                                                                           
CHAIR CLAMAN  said being a notary  public is not a  right, rather                                                               
it  is a  licensed privilege  administered by  the Office  of the                                                               
Lieutenant Governor.   He explained the process  through which an                                                               
individual may become a notary public.                                                                                          
REPRESENTATIVE  EASTMAN clarified  that he  was referring  to the                                                               
rights  of  the person  seeking  an  electronic notary,  not  the                                                               
notary themselves.                                                                                                              
CHAIR CLAMAN  said that  is not a  question he  has investigated.                                                               
He said he  thinks it would be unlikely that  an individual would                                                               
be unable  to find and utilize  an electronic notary.   He listed                                                               
myriad locations where one could find a notary.                                                                                 
1:29:38 PM                                                                                                                    
REPRESENTATIVE  WOOL   asked  about  the   identity  verification                                                               
process when utilizing an electronic notary.                                                                                    
MS. GODINEZ said  the most common way a person's  identity can be                                                               
verified is  by running  a series  of forensic  tests on  a high-                                                               
resolution image  of his/her identification  document (ID).   She                                                               
noted that  HB 124 allows for  a situation in which  a notary can                                                               
confirm  a person's  identity when  that person  is known  to the                                                               
notary or  when a credible  witness who can confirm  the person's                                                               
identity is present with the notary.                                                                                            
1:30:46 PM                                                                                                                    
VICE CHAIR LEDOUX  asked for more information  about the forensic                                                               
MS. GODINEZ said  she is not totally certain about  how the tests                                                               
work, but  that they can involve  running the bar code  on the ID                                                               
and examining  the image  for microdots.   She remarked  that the                                                               
tests are in-depth and are "more  than just giving it a once-over                                                               
with your eyes."  She  deferred answering the question further to                                                               
an expert testifier who would join the meeting shortly.                                                                         
1:31:45 PM                                                                                                                    
REPRESENTATIVE  WOOL described  the  relative  casualness of  in-                                                               
person  identification  verification  at  his  local  bank.    He                                                               
observed that  the electronic verification process  would be more                                                               
stringent than in-person.                                                                                                       
MS. GODINEZ  said that is  correct.   She noted that  some people                                                               
have remarked  that remote online notarization  has the potential                                                               
to be more rigorous in terms of identity-proofing.                                                                              
REPRESENTATIVE WOOL  mused on his  earlier question  about having                                                               
the option to  utilize an electronic notary even  though he lives                                                               
near a bank.   He observed that it may be easier  for him to just                                                               
go into the  bank.  He suggested that many  people would elect to                                                               
maintain use of traditional notaries.                                                                                           
1:32:45 PM                                                                                                                    
VICE  CHAIR LEDOUX  asked  who would  among  those available  for                                                               
questions  would best  be  able to  answer  her earlier  question                                                               
about the forensic tests.                                                                                                       
MS. GODINEZ said  Terry Bryan from the Yukon  Title Company might                                                               
be able to field the question.                                                                                                  
1:33:35 PM                                                                                                                    
TERRY  BRYAN,  President, Yukon  Title  Company,  noted that  the                                                               
detail of  any forensic testing  would be determined  through the                                                               
development  of  regulations  through the  Lieutenant  Governor's                                                               
office.   He  said  Michael  O'Neal of  First  American Title  in                                                               
Washington,  D.C.  would likely  be  able  to discuss  how  other                                                               
states have  handled the issue.   He noted that Mr.  O'Neal would                                                               
be calling into the meeting shortly.                                                                                            
VICE  CHAIR LEDOUX  asked  whether the  kinds  of forensic  tests                                                               
would have to be determined through regulations.                                                                                
MR. BRYAN  said a requirement  for testing  would be a  matter of                                                               
regulatory enforcement.   He said his interpretation  is that the                                                               
regulatory process  would mandate  something between  the current                                                               
norm    presentation  of a  government-issued  ID in  front of  a                                                               
notary  and a thorough test.                                                                                                    
CHAIR CLAMAN  said Mr.  O'Neal would  be available  at 2  p.m. to                                                               
address the question.                                                                                                           
1:35:17 PM                                                                                                                    
REPRESENTATIVE  EASTMAN asked  about forensic  tests required  in                                                               
other states.                                                                                                                   
CHAIR CLAMAN deferred to Mr. O'Neal.                                                                                            
REPRESENTATIVE  EASTMAN acknowledged  that  an electronic  notary                                                               
could verify  through various  means that an  ID is  genuine, but                                                               
questioned how  the notary would  be able to verify  the identity                                                               
of the person who has sent the image of the ID.                                                                                 
MS.  GODINEZ said  the  online notarial  act  would be  conducted                                                               
face-to-face through video chat and would be recorded.                                                                          
1:37:06 PM                                                                                                                    
The committee took a brief at-ease from at 1:37 p.m.                                                                            
1:37:37 PM                                                                                                                    
VICE CHAIR LEDOUX returned the gavel to Chair Claman.                                                                           
CHAIR CLAMAN opened public testimony on HB 124.                                                                                 
1:38:19 PM                                                                                                                    
MR. BRYAN  said he has been  involved in the title  insurance and                                                               
real estate industry for over 20  years.  He mentioned that he is                                                               
daily aware  of dozens of  notarial acts, including  by employees                                                               
of his company.  He opined that  HB 124 would improve the flow of                                                               
commercial  transactions  which  require or  request  a  notarial                                                               
function.   He said HB  124 is consumer-focused  legislation that                                                               
would save money  and time for consumers.  He  stated that HB 124                                                               
would benefit Alaskans  who do not live near a  notary as well as                                                               
members of the state's mobile population.   He opined that HB 124                                                               
would enact a  "safer process" because he has  more confidence in                                                               
notarial  functions  within  Alaska than  from  other  non-Alaska                                                               
jurisdictions.   He shared that  his company often  questions the                                                               
integrity of  a notarial act  from a different jurisdiction.   He                                                               
shared similar apprehensions about  the integrity and validity of                                                               
international notary functions.   He discussed the potential ease                                                               
and  efficiency that  would  result if  all  these notarial  acts                                                               
could be controlled through the State  of Alaska (SOA).  He noted                                                               
that 20 percent of his  company's transactions require a mail-out                                                               
or shipment of documents for an  individual to sign with a notary                                                               
outside the  company's jurisdiction.  He  said these transactions                                                               
are  slowed   because  the  buyer/lender/seller  must   wait  for                                                               
documents to  be delivered  by a courier  service.   He suggested                                                               
changes to  HB 124  provisions relating  to maintaining  a single                                                               
notary journal  and the responsibility  placed on  the Lieutenant                                                               
Governor's office  regarding service of process  for transactions                                                               
regarding notary functions.   He said he and  Yukon Title Company                                                               
support HB 124.                                                                                                                 
1:42:25 PM                                                                                                                    
CRYSTAL   HAMAN,  Vice   President/Title  Manager,   Yukon  Title                                                               
Company, said her  office provides title and  escrow services for                                                               
the whole  northern portion of Alaska.   She shared that  she has                                                               
worked for Yukon  Title for approximately 26  years and described                                                               
the  numerous  occasions  in  which   she  reviewed  foreign  and                                                               
overseas  notaries,   in  particular  documents  that   were  not                                                               
properly notarized.   She said  she has seen many  documents that                                                               
she has  questioned in terms of  their validity.  She  noted that                                                               
she was  initially skeptical about  electronic notaries  but said                                                               
her  skepticism has  since  been assuaged.    She echoed  earlier                                                               
discussion  about electronic  notarial  acts  being more  secure.                                                               
She described  the process through  which her office  attempts to                                                               
verify foreign  notaries.  She  said military members  who reside                                                               
in Alaska would  benefit from HB 124, as they  are often overseas                                                               
and would be able to access an electronic notary in Alaska.                                                                     
1:44:57 PM                                                                                                                    
KIM  MATTLE, President,  Alaska  Land  Title Association  (ALTA);                                                               
General Manager,  Alaska Escrow  & Title Insurance  Agency, Inc.,                                                               
said  she has  worked in  the title  and escrow  industry for  17                                                               
years and  in banking "on  the lending side"  for 13 years.   She                                                               
said  ALTA  supports  HB  124   and  the  option  to  utilize  an                                                               
electronic notary,  which she described as  consumer-friendly and                                                               
secure.   She  said HB  124 would  bring Alaska  up to  date with                                                               
technology  available  to  consumers, making  the  completion  of                                                               
transactions easier,  more efficient,  and more secure  no matter                                                               
where the transacting party is physically located.                                                                              
1:46:26 PM                                                                                                                    
HOWARD  HANCOCK, Chief  Title Officer,  Fidelity Title  Agency of                                                               
Alaska, said his  company fully supports HB 124.   He relayed the                                                               
process  through which  his company  currently handles  paperwork                                                               
with parties involved in a  transaction when those parties are in                                                               
a  foreign  country.    In  most  cases,  he  said,  his  company                                                               
recommends  those  people go  to  the  United States  Embassy  or                                                               
Consulate Office for a notary.   He noted that this is not always                                                               
possible  due  to logistical  reasons  or  the considerable  time                                                               
required to schedule an appointment.   Alternatively, he said, if                                                               
the party  is in a country  that abides by [The  Hague Convention                                                               
Abolishing  the Requirement  of Legalisation  for Foreign  Public                                                               
Documents], the  party can  use a  foreign notary  public, though                                                               
the  document must  be accompanied  by  an apostille  certificate                                                               
signed by  a foreign government  official verifying  the validity                                                               
of the foreign  notary public that signed it.   He noted that the                                                               
process of  obtaining an  apostille can  lead to  further delays.                                                               
Additionally, he said,  if the notarization is done  in a foreign                                                               
language, a written translation must  be attached to the document                                                               
to be  accepted by the  State Recorder's  Office.  He  noted that                                                               
obtaining  a translation  can also  lead to  further delays.   He                                                               
stated that  his company  anticipates that  the option  of remote                                                               
online  notarization would  streamline  operations and  eliminate                                                               
the cumbersome mail-out process.   He urged support in passage of                                                               
HB 124.                                                                                                                         
1:48:35 PM                                                                                                                    
REPRESENTATIVE EASTMAN  asked if passage  of HB 124  would change                                                               
the way notaries are recruited.                                                                                                 
MR. HANCOCK said he does not  believe it would have any impact at                                                               
all.  He said  the goal is to give notaries  the option to either                                                               
be a "paper notary" or an "electronic notary.                                                                                   
1:49:28 PM                                                                                                                    
REPRESENTATIVE  LEDOUX asked  how  notaries  deal with  identical                                                               
MR. HANCOCK said they would presumably have different names.                                                                    
REPRESENTATIVE  LEDOUX  said  she  understands  they  would  have                                                               
different names,  but if they  are identical, how would  a notary                                                               
know if he/she is looking at one twin's ID and not the other's.                                                                 
MR. HANCOCK  said it is a  good question.  He  suggested that Mr.                                                               
O'Neal might be able to provide an answer.                                                                                      
1:51:24 PM                                                                                                                    
REPRESENTATIVE STUTES asked, assuming HB  124 were to become law,                                                               
whether an electronic notarization  in Alaska would be considered                                                               
legitimate in a jurisdiction in  which electronic notarization is                                                               
not recognized in statute.                                                                                                      
MR. HANCOCK said  he does not believe  an electronic notarization                                                               
would be accepted  in a state that has not  yet adopted a similar                                                               
law.  He  commented that this is the way  things are currently in                                                               
Alaska.    He  said  there are  approximately  nine  states  that                                                               
currently recognize electronic notarization.                                                                                    
1:53:12 PM                                                                                                                    
The committee took an at-ease from 1:52 p.m. to 1:53 p.m.                                                                       
1:54:05 PM                                                                                                                    
The committee took an at-ease from 1:54 p.m. to 1:58 p.m.                                                                       
1:58:44 PM                                                                                                                    
MICHAEL O'NEAL,  Vice President of Corporate  Underwriting, First                                                               
American Title  Insurance Company, said  he has worked  on remote                                                               
notarization  legislation   in  approximately  40  states.     He                                                               
mentioned  that for  HB  124,  he worked  very  closely with  the                                                               
Uniform Law Commission  (ULC) as it crafted the  legislation.  He                                                               
said he is grateful for the opportunity to support HB 124.                                                                      
Mr.  O'Neal explained  that the  remote notarization  concept has                                                               
existed for several years.  He  said that in 2012 Virginia became                                                               
the   first   state   to  experiment   with   remote   electronic                                                               
notarizations via  webcam interactions.   He called  the Virginia                                                               
law "novel" and  noted that it raised  unanswered questions about                                                               
the steps  required to securely  identify a document  signer over                                                               
the  internet.   He  described  how  various public  and  private                                                               
stakeholders worked  together to determine how  to achieve secure                                                               
remote  notarization.   He  said  this  process resulted  in  two                                                               
pieces  of  model legislation,  one  produced  by the  title  and                                                               
mortgage industries and  the other crafted by the ULC.   He noted                                                               
that HB 124  uses "the ULC approach.    He said he  served as the                                                               
liaison  between  the  two  processes and  stated  that  the  two                                                               
uniform laws are in substantive  alignment, which he explained is                                                               
"very intentional."  He said  17 states have passed remote notary                                                               
laws and 15 others have bills pending.                                                                                          
MR. O'NEAL addressed  the topic of safeguards  and explained that                                                               
there  are  three  requirements: identification  procedures,  the                                                               
creation of  an audit trail,  and the use of  secure technologies                                                               
to prevent  after-the-fact records  alteration.   He said  HB 124                                                               
calls  for  multifactor  authentication  and  would  require  the                                                               
application  of two  types of  identity-proofing.   He  explained                                                               
that  the  bill  would  allow the  Lieutenant  Governor,  through                                                               
regulation, to establish  a process to identify  signers and stop                                                               
fraud.   He  described  the two-step  process  that is  currently                                                               
standard.   The  first step,  he explained,  involves checking  a                                                               
scanned  image   of  an  ID   for  security  features,   such  as                                                               
microprints, microdots,  holographic features, and barcodes.   He                                                               
drew a contrast between this  thorough process and the process by                                                               
which a traditional notary verifies  a document.  The second form                                                               
of identity-proofing, he  said, is a requirement  that the signer                                                               
takes an  identification quiz.   He noted  that this is  the same                                                               
quiz that  many people take  online when  applying for a  loan or                                                               
doing a  credit check.   He detailed  how the  personal questions                                                               
are designed  so that they could  not be answered by  someone who                                                               
has stolen  a wallet.  He  said these questions are  difficult to                                                               
solve for identity thieves.                                                                                                     
2:05:22 PM                                                                                                                    
REPRESENTATIVE  EASTMAN  asked  how   the  identity  quizzes  are                                                               
generated and who generates them.                                                                                               
MR. O'NEAL  said there are  various vendors who  produce identity                                                               
quizzes.  He said it  is widespread commercial application in the                                                               
banking industry  and credit reporting  industry.   He identified                                                               
LexisNexis as one major vendor.   He explained that these vendors                                                               
plumb  data from  public data  records  about individuals,  which                                                               
allows them  to create the quizzes.   He said HB  124 would allow                                                               
notaries   to  leverage   the  same   tools  used   by  financial                                                               
institutions to verify customers' identities.                                                                                   
2:06:31 PM                                                                                                                    
REPRESENTATIVE EASTMAN  asked how many  of the 17 states  to have                                                               
authorized remote notarization currently  require notaries to use                                                               
vendor-produced identity quizzes.                                                                                               
MR.  O'NEAL  clarified that  17  states  have enacted  laws,  but                                                               
remote notarization is  only "up and running"  in approximately 5                                                               
states.   He  said  each  of those  states  requires  the use  of                                                               
identity-proofing quizzes.   He  said it  is fully  expected that                                                               
every state  to implement regulations  will adopt the  concept of                                                               
an  identity-proofing   quiz.     He  noted  that   the  National                                                               
Association of Secretaries  of State (NASS), which  has worked to                                                               
produce national  standards to help  guide the  implementation of                                                               
remote notarization laws, adopted  identity-proofing quizzes as a                                                               
core standard.                                                                                                                  
2:08:29 PM                                                                                                                    
REPRESENTATIVE LEDOUX asked  for examples of the  questions on an                                                               
identity-proofing quiz.                                                                                                         
MR.  O'NEAL  gave  a  few   examples  including,  "Which  of  the                                                               
following addresses  have you lived  at over the last  20 years?"                                                               
and, "Which of these people are  you related to?"  He highlighted                                                               
that these  questions draw from  the user's personal  history and                                                               
restated that the answers could not be found in one's wallet.                                                                   
REPRESENTATIVE  LEDOUX asked  why these  questions would  only be                                                               
asked online and not during an in-person notarial act.                                                                          
MR.  O'NEAL said  that  is an  excellent question.    He said  it                                                               
points   to   the   heightened  robustness   of   identification-                                                               
verification for remote notarization.   He noted that it combines                                                               
two  features    physical possession  of an  ID and  knowledge of                                                               
personal  history    to create  a state-of-the-art,  multi-factor                                                               
authentication  process.   He remarked  that advocates  of remote                                                               
notarization  point to  it as  an extremely  secure process.   He                                                               
said many  people believe  that  paper  notaries" can  and should                                                               
adopt those same tools.                                                                                                         
CHAIR CLAMAN  said Representative  LeDoux's question  presents an                                                               
interesting  topic and  noted that  he cannot  remember the  last                                                               
time he  heard of anyone  misusing the notary process,  though it                                                               
must happen on occasion.                                                                                                        
2:12:09 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  said she  is  reminded  of the  questions                                                               
generated when  she attempts to sign  into her bank account  on a                                                               
computer terminal  not recognized  by the bank.   She  noted that                                                               
these questions are  sometimes not relevant and thus  there is an                                                               
option to  generate a new  question.   She asked whether  such an                                                               
option would be available in an identity-proofing quiz.                                                                         
MR. O'NEAL answered yes.   He explained that an industry standard                                                               
for the  administration of  the quizzes  has been  established by                                                               
the  federal   government  through  the  National   Institute  of                                                               
Standards of Technology  (NIST).  He said the way  it works today                                                               
is that each quiz contains five  questions, four of which must be                                                               
answered within a time limit.   There is an opportunity to retake                                                               
the quiz should the user fail,  and at least two of the questions                                                               
from the original  quiz must be replaced the  second time around.                                                               
He  said getting  four out  of  five questions  correct would  be                                                               
nearly  impossible  for  someone  fraudulently  claiming  another                                                               
person's identity.   This, he  explained, is why the  quizzes are                                                               
flexible  in allowing  one wrong  answer that  does not  kick the                                                               
user entirely out of the process.                                                                                               
2:15:46 PM                                                                                                                    
REPRESENTATIVE  WOOL  inquired  about  the  prevalence  of  fraud                                                               
related to electronic  notaries.  He noted that he  does not want                                                               
to see the cessation of  traditional notaries under the rationale                                                               
that remote notarization is more secure.                                                                                        
MR.  O'NEAL said  HB 124  would make  remote notarization  purely                                                               
optional for those Alaskans who wish to  use it.  He said the ULC                                                               
sought to  create an equivalence of  notarial acts.  He  said, "A                                                               
notary is a  notary is a notary."  He  mused on the impossibility                                                               
of capturing a signature through  electronic means and said it is                                                               
the  impetus for  imposing heightened  security requirements  for                                                               
remote notarization.                                                                                                            
CHAIR CLAMAN added that the  Office of the Lieutenant Governor is                                                               
confident that "many people" would  prefer not to get involved in                                                               
the electronic notary business.                                                                                                 
2:19:24 PM                                                                                                                    
MR. O'NEAL said  HB 124 would require a notary  to keep a journal                                                               
that logs  the bare facts  about the notarization which  could be                                                               
used as evidence as to  who actually signed the document involved                                                               
in  a notarial  act.    He commented  that  the  bill would  also                                                               
require the  creation and retention  of an  audio/video recording                                                               
of  the performance  of the  notarial act  itself.   He explained                                                               
that the  act would be recorded  on a webcam and  retained by the                                                               
notary for  a period either  set in  statute or regulated  by the                                                               
Lieutenant Governor.  Most states, he  said, require a 5-, 7-, or                                                               
10-year retention period.   He explained that the  purpose of the                                                               
video is to  contribute to the audit  trail  He added  that it is                                                               
also  a significant  fraud deterrent  because criminals  are much                                                               
less likely  to fraudulently sign  in front of a  public official                                                               
and on camera.  He also  spoke to the importance of retaining the                                                               
video  for  identity-verification  purposes  in  the  absence  of                                                               
MR. O'NEAL  spoke to the importance  of tamper-proofing notarized                                                               
online  documents.    He  described  the  kinds  of  technologies                                                               
currently available  today that  are tamper-evident  and generate                                                               
error  messages on  electronic documents  that have  been altered                                                               
post-notarization.   He  summarized that  these three  features                                                                 
identity-verification,   an  audit   trail,  and   tamper-evident                                                               
documents    have the  potential to  make remote  notarization as                                                               
secure  or  even  more  secure   than  the  traditional  notarial                                                               
2:23:10 PM                                                                                                                    
REPRESENTATIVE EASTMAN  said that  SOA has  historically required                                                               
its  notaries to  be bonded.    He asked  what effect  electronic                                                               
options have had on bonding requirements elsewhere.                                                                             
MR. O'NEAL answered that most  states are not changing their bond                                                               
requirements as a  result of enacting a  remote notarization law.                                                               
He said  the question of  bonds varies greatly among  the states.                                                               
He stated that  only about half of states require  a bond and, in                                                               
some  cases, the  bond was  set at  a figure  like $500  almost a                                                               
century ago and has hardly changed.                                                                                             
CHAIR CLAMAN said Alaska is "settled" at $1,000.                                                                                
MR.  O'NEAL said  the only  state  that has  changed its  bonding                                                               
requirement is  Florida.  He said  he thinks Florida will  be "at                                                               
the top of  the heap" by requiring a $25,000  bond, an additional                                                               
cost  borne by  notaries  in that  state.   He  said attempts  to                                                               
maintain  equivalent safeguards  between  traditional and  remote                                                               
notarization  have  resulted  in   most  states  finding  it  not                                                               
necessary to change bonding requirements.                                                                                       
2:25:01 PM                                                                                                                    
REPRESENTATIVE   EASTMAN  asked   about  forensic   and  microdot                                                               
technologies  and  whether they  are  used  in states  that  have                                                               
enacted similar legislation.                                                                                                    
MR. O'NEAL answered yes.  He  described how Virginia law does not                                                               
actually require  those types of  technology, though  he believes                                                               
most  vendors  operating  in  Virginia  voluntarily  allow  their                                                               
notaries to use that step.   He stated that the forensic analysis                                                               
of  identification  credentials  has  been  part  of  all  remote                                                               
notarization laws enacted since Virginia's.                                                                                     
2:26:22 PM                                                                                                                    
REPRESENTATIVE  EASTMAN asked  if Mr.  O'Neal has  encountered or                                                               
has any  solutions for "the  sticky issue" of religious  garb and                                                               
identifying someone wearing religious garb.                                                                                     
MR. O'NEAL  said he  has never been  asked that  question before.                                                               
He noted  that a traditional notary  must see a person's  face to                                                               
verify  identity.   He commented  that the  question raises  some                                                               
fundamental  First  Amendment  issues relating  to  notarization.                                                               
The bottom line, he stated,  is that remote notarization requires                                                               
the presentation  to the  notary of  an ID  and a  similar visual                                                               
identity verification to the traditional notarial process.                                                                      
2:28:28 PM                                                                                                                    
CHAIR   CLAMAN  returned   to  Representative   Stutes's  earlier                                                               
question  about  whether  an electronic  notarization  in  Alaska                                                               
would be  considered legitimate  in a  jurisdiction that  has not                                                               
enacted a remote notarization law.                                                                                              
TERRY BANNISTER,  Legislative Legal Services, said  it depends on                                                               
the law  of the other  state.  She said  this is why  more states                                                               
are  being encouraged  to adopt  uniform electronic  notarization                                                               
CHAIR CLAMAN  asked, "Isn't there  a full faith and  credit issue                                                               
if North  Carolina doesn't recognize  a notarized  signature that                                                               
is considered valid in Alaska?"                                                                                                 
MS. BANNISTER  said if the  notarized material has  been accepted                                                               
in  Alaska, then  it would  probably be  accepted in  a different                                                               
state.  But, she  said, if there is any reason that  it has to be                                                               
acknowledged  electronically  in the  other  state,  "it may  not                                                               
2:30:08 PM                                                                                                                    
REPRESENTATIVE KOPP  addressed AS  09.80, the  Uniform Electronic                                                               
Transactions Act.  He explained that  it was enacted in 2004 with                                                               
the intent to align practices  relating to electronic records and                                                               
electronic signatures.  He asked whether  the intent of HB 124 is                                                               
already covered in AS 09.80.                                                                                                    
MS. BANNISTER said  she would have to do  additional research and                                                               
get back to  the committee with more details.   She remarked that                                                               
her  initial  assessment  is  that the  current  statute  is  not                                                               
sufficient for what for what  HB 124 is attempting to accomplish.                                                               
She commented that  AS 09.80 acknowledges that  signatures can be                                                               
done   electronically,  but   HB  124   relates  to   a  specific                                                               
application for notarization.                                                                                                   
CHAIR CLAMAN  said there will be  plenty of time to  conduct more                                                               
research.   He asked Ms.  Bannister to submit a  written response                                                               
to Representative Kopp's question.                                                                                              
2:33:42 PM                                                                                                                    
REPRESENTATIVE  EASTMAN  mentioned  that there  has  been  recent                                                               
debate in the  legislature about whether to  close or consolidate                                                               
district offices.   He asked if there is anything  related to the                                                               
State  Recorder's Office  that  does not  lend  itself to  remote                                                               
notarization.    He  asked  why  physical  office  locations  are                                                               
CHRISSI  THURMAN,   State  Recorder,  State   Recorder's  Office,                                                               
Department  of  Natural  Resources,  said the  offices  that  are                                                               
slated to  be closed  due to  budget cuts have  no effect  on the                                                               
electronic recording applications presented in HB 124.                                                                          
REPRESENTATIVE  EASTMAN said  he understands  that.   He said  he                                                               
wanted to  know if there is  a reason that the  offices could not                                                               
be categorically replaced by electronic processes.                                                                              
CHAIR CLAMAN said he does not  think there is a proposal to close                                                               
recorder's offices.   He ruled that the question  is not relevant                                                               
to discussion of HB 124.                                                                                                        
2:36:11 PM                                                                                                                    
CHAIR CLAMAN  closed public testimony.   He said HB 124  would be                                                               
held for further review.                                                                                                        
2:36:45 PM                                                                                                                    
The committee took a brief at-ease at 2:37 p.m.                                                                                 

Document Name Date/Time Subjects
State Commission for Human Rights Appointment-Cynthia Erickson Application 4.15.19.pdf HJUD 4/15/2019 1:00:00 PM
State Commission for Human Rights Appointment-Debbie Fullenwider Resume 4.15.19.pdf HJUD 4/15/2019 1:00:00 PM
Commission on Judicial Conduct Appointment-Jane Mores Resume 4.12.19.pdf HJUD 4/15/2019 1:00:00 PM
HB014 ver G 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Sponsor Statement 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Sectional Analysis ver G 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Summary of Changes ver K to ver G 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Supporting Document-Letters 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Fiscal Note DHSS-PS 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Fiscal Note LAW-CRIM 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Fiscal Note DPS-DET 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Fiscal Note DOA-OPA 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Fiscal Note DOA-PDA 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
HB014 Fiscal Note DOC-IDO 3.20.19.pdf HJUD 3/20/2019 1:30:00 PM
HJUD 4/15/2019 1:00:00 PM
HJUD 4/16/2019 5:15:00 PM
HB 14
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 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124 Sectional Analysis ver A 4.12.19.PDF HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document-RON Process One - Pager 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document-RON Law State-by-State Graphic 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document-Why URPERA 4.12.19.PDF HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document - RULONA 2018 Summary 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document - Letters 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document - Quicken Loans Letter 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document - Alyeska Title Guaranty Agency Letter 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Supporting Document - Alaska Association of Realtors Letter 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB 124 Fiscal Note DNR-RO 4.12.19.pdf HJUD 4/12/2019 1:00:00 PM
HJUD 4/15/2019 1:00:00 PM
HB 124
HB014 Amendment #1 4.15.19.pdf HJUD 4/15/2019 1:00:00 PM
HB 14