HOUSE BILL NO. 97 An Act relating to the authority to take oaths, affirmations, and acknowledgments in the state, to notarizations, to verifications, to acknowledgments, to fees for issuing certificates with the seal of the state affixed, and to notaries public; and providing for an effective date. SCOTT CLARK, NOTARY ADMINISTRATOR, OFFICE OF LIEUTENANT GOVERNOR, voiced support for the legislation and asked that Mr. Westad, intern for Lt. Governor Leman summarize it. BRIAN WESTAD, INTERN, OFFICE OF LIEUTENANT GOVERNOR, stated that HB 97 identifies changes in the Alaska Statutes, which have not been updated since 1961. These changes have been suggested by the Alaskan Notaries working together with Lt. Governor Leman's office. Mr. Westad referenced the handout: Notary Statute Comparison - CSHB 97 (JUD). (Copy in File). The comparison is arranged in sections highlighting the qualifications, terms, fees, bonds, commission types, commission revocation, notary data and non-commissioned notaries. Mr. Westad provided an overview of the handout. 2:21:23 PM Mr. Westad continued with the overview. 2:22:11 PM Representative Croft was confused how the procedure for revocation changes. He referenced the proposed "shared" responsibility with the Lt. Governor. Mr. Clark responded that Section 68, Page 16, provides the Lt. Governor the authority to revoke or suspend the commission based on grounds for that subsection. If the status for the notary changes and they no longer qualify for the commission, that would constitute grounds. An extreme case would be a notary convicted of a felony during the course of their commission. Failure to comply with the chapter gives the Lt. Governor the authority to revoke or suspend. Mr. Clark pointed out that the #3 category for "incompetence or malfeasance" is more nebulous. All the changes are fairly technical and relate to the legislation itself. Mr. Clark noted that Section 44.50.069 deals with situations where the public might call and complain about a notary. In that situation, instead of the Lt. Governor having the authority to revoke the commission, it would go through the Office of Administrative hearings. He thought that situation could be less defined and would require some degree of investigation. 2:24:59 PM Representative Croft referenced that section and asked about the final analysis and determination of a violation in the chapter. He stated that Section 44.50.068 surprised him in that it repeats Section 44.50.069 and gives the Lt. Governor the sole power. He pointed out that language would not require a hearing. Mr. Clark acknowledged that was correct and that it was not intended to "rob" the notaries of their right to appeal. He thought it might be appropriate to add a subsection to Section 44.50.068 that would clarify that the notary would have the authority to appeal any decision made by the Lt. Governor. Representative Croft thought that the two provisions should be combined into one section. As it appears now, the two seem to be on different tracks. Mr. Clark agreed and suggested that Representative Croft could make an amendment, which their office would support. The current situation is quite cumbersome. He suggested that if an amendment is created, it should approach the situation by letting the Lt. Governor suspend or revoke and then using the administrative hearing officer to become the appeal mechanism. 2:28:16 PM Representative Croft commented it should be a matter of suspending. Mr. Clark agreed. Representative Hawker agreed with Representative Croft and thought that an amendment should be brought forward before the bill was moved from Committee. Representative Weyhrauch recommended that if there is going to be an appeal, it should be in a separate section applying to other provisions. Mr. Clark asked if direction was being given for the Office of the Lt. Governor to draft an amendment. Representative Weyhrauch asked about the qualifications of the notary. He referenced Section 8, Page 8, which stipulates the qualifications of those not having been incarcerated for a felony within 10 years before the commission takes effect. He asked if a person would qualify if they were convicted of a felony but had not been incarcerated. Mr. Clark did not know if it was possible. 2:30:32 PM Representative Weyhrauch commented that if you choose a notary, you choose someone that can be trusted. He thought that a probation felon should be reconsidered. Mr. Clark replied that it had not occurred to them that someone could be accused of a felony and not be incarcerated. He recommended establishing language that would take both situations into consideration. Mr. Clark agreed it could be addressed at the same time as the other amendment. 2:31:50 PM Co-Chair Meyer pointed out that the application fee had not been changed; he asked if it had been the same cost since 1961. Mr. Clark responded that fee had been raised from $20 dollars to $40 dollars in 1990. The Lt. Governor did not proposed that a change be made to that number. In response to Representative Weyhrauch's comments regarding the fees, Mr. Clark explained that the $40 dollar fee was reasonable compared with other states. Representative Weyhrauch questioned the cost to buy a bond in 1990 as compared to now. Mr. Clark did not know, but guessed that they had not increased. Representative Weyhrauch asked if a notary test was required. Mr. Clark replied that the test is no longer required; when researching the statutes, there was no statutory authority to make it mandatory. The changes proposed to HB 97 intends to expand the testing program to make it self guided through the website. Representative Weyhrauch asked it was required that the notaries keep a log. Mr. Clark replied that law does not require it, but notaries are strongly urged to keep a notary journal. He added that it is an essential element to the act of notarization. It is not mentioned in the statutes or in the bill and is a contentious subject. There has been a lot of objection to a mandatory journal. He commented that a journal serves the public's best interest as it provides a record of important information. 2:36:07 PM Representative Hawker referenced the $40 dollar fee and asked if the State was receiving sufficient revenue to run the cost of the program with that amount. Mr. Clark believed so. Co-Chair Meyer interjected that since the legislation is in the process of raising the fees, that section should be "bumped up" a little. Mr. Clark responded that if the fee was raised, the bill might not pass. He stressed that passage is important and that the Office of the Lt. Governor had looked at the fee schedule closely. 2:37:46 PM Representative Holm asked if it might be called a tax on the notary. He inquired about the number of notaries. Mr. Clark stated that their office processes about 3,000 commissions each year and that there are around 12,000 active notaries. Vice-Chair Stoltze asked if any industry dominates the notary commissions. Mr. Clark replied that the banking industry is a common business; however, all businesses find it convenient to have notaries on staff. Vice-Chair Stoltze asked if banks offer the service as a convenience or as a service. Mr. Clark responded that most banks offer notary services free of charge to their customers. Representative Croft referenced the $40 dollar charge and asked if that fee had been too high in 1990. He suggested that the question should be if the amount generates enough money to cover the services and asked if it was comparable to other states. Co-Chair Meyer stated he would not suggest an increase if costs were being met. Representative Weyhrauch thought it was important to scrutinize those costs closely and requested that more information be made available. Mr. Clark offered to provide that information. Co-Chair Meyer requested that Mr. Clark work with Suzanne Cunningham in his office to provide a committee substitute addressing the items of concern. Co-Chair Chenault inquired if there was a log of how many times a notary uses their seal each year. Mr. Clark replied that without a notary journal, there is no way to track that type of activity. Co-Chair Chenault questioned the fiscal note request. Mr. Clark advised that the fees referenced are not related to the notaries or the public. They are related to a special type of certificate, attached to documents going to foreign countries. Foreign governments often will not accept documents from any other country without that type of attached certificate. There are between 2,000 and 3,000 of those per year and that is what the fiscal note is based upon. Co-Chair Chenault asked what most of the certificates deal with. Mr. Clark explained that they verify that the notaries really are notaries. 2:43:59 PM HB 97 was HELD in Committee for further consideration.