Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/20/2020 01:30 PM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
<Bill Hearing Canceled>
(HB 123 Will be Considered After SB 8)
Moved SSHB 124 Out of Committee
Uniform Rule 23 Waived
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Heard & Held
          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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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