Bill Summary for H 776 (2021-2022)

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Summary date: 

May 3 2021

Bill Information:

View NCGA Bill Details2021
House Bill 776 (Public) Filed Monday, May 3, 2021
Intro. by D. Hall, Davis, Hardister, Reives.

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Bill summary

Enacts new Article 4, Remote Online Notarization Act, to GS Chapter 10B as follows. Sets forth defined terms. Provides that the Notary Public Act (Article 1) and the Electronic Notary Act (Article 2) apply to all acts authorized under the new Article, except in case of conflict, in which the provisions of the new Article control. 

Sets qualifications for remote online notary registration to be those for electronic notary registration under Part 2 of Article 2. Authorizes a remote online notary to perform acknowledgements, jurats, verifications or proofs, and oaths or affirmations with respect to tangible records and electronic documents through means of communication technology, defined as an electronic device, process, or system that allows a remote online notary and a remotely located principal to communicate with each other simultaneously by sight and sound using audiovisual technology and that makes reasonable accommodation for principals with vision, hearing, or speech impairments. Allows a registered remote online notary to perform these notarial acts as an electronic notarization under Article 2. Prohibits a remote online notary from performing a remote online notarial act if the principal is not personally known to the notary or identified by satisfactory evidence or any reason set forth in GS 10B-20 (limitations of notary publics). Establishes requirements for the use of communication technology for remote online notarization, and requires ensuring security measures. Requires principals to use the communication technology the remote online notary has selected.

Limits the remote online notary's authority to perform a remote online notarial act to when the remote online notary is physically located in the state and the remotely located principal is physically located in the state, outside of the state but within the United States, or outside of the United States if the remote online notary has no actual knowledge of the remote online notarial act being prohibited in the jurisdiction in which the remotely located principal is physically located, and the remotely located principal placing an electronic signature, as defined, on the electronic document confirms to the remote online notary that the requested remote online notarial act and the electronic document are either: (1) part of or pertaining to a matter to be filed with or is currently before a court, governmental entity, or other entity in the United States; (2) related to real property in the state; (3) related to property other than real property located in the United States; or (4) related to a transaction substantially connected to the United States that does not involve the transfer of real property. Provides for state laws to govern the validity of a remote online notarization performed by a remote online notary of the state.

Establishes the requirements and procedure for remote online notarial acts, as well as prohibited notarial acts if certain circumstances are present. Provides that failure to comply with the requirements of the remote online notarization does not invalidate the notarial act or the electronic records that were notarized, but it does not prevent an aggrieved person from seeking to invalidate the record. Provides for confidentiality of the principal's documents. Details requirements and procedures for the remote online notary to verify the identity of the principal. Allows a remote online notary to require the principal to provide additional information or identification credentials necessary to assure the principal's identity. 

Enumerates six components that must be attached to, or logically associated with, the electronic document by the remote online notary, which must be immediately perceptible and reproducible in the electronic record to which the remote online notary's electronic signature is attached, including the notary's commission information and electronic signature and the completed wording of the specified notarial certificates, as appropriate.

Provides requirements for using electronic notarization and conducting remote online notarization. Requires each electronic notarization to include a communication technology recording. 

Details electronic journaling requirements for remote online notaries performing remote online notarizations for each remote online notarization, deemed the exclusive property of the remote online notary. Requires a remote online notary or the notary's guardian, conservator, agent, or personal representative, or a contracted third party, to retain a communication technology recording of the performance of each remote online notarial act for 10 years after the performance of the notarial act. Provides required terms for third-party contracts for communication technology recording storage. Provides for retention of the electronic journal  upon resignation or revocation or suspension of the remote online notary's commission. Provides for designation of a custodian for acts associated with electronic journaling. Provides for transmission of the electronic journal to the Secretary upon death or adjudication of incompetency of a current or former remote online notary. Details security requirements of remote online notaries. Requires surrender of the electronic journal upon termination of employment, with the duty to maintain an accurate backup of the journal for at least 10 years. Provides required action following discovery of any permanent loss of data, unauthorized use, loss of use, or compromised security of the electronic journal. Provides for suspension of the notary's commission for failure to comply with a records request of the Department of State within 30 days until the Secretary reinstates the commission. Directs that all notarial records required by statute or rule be delivered to the Secretary upon resignation, revocation, or expiration, or death of a notary.

Details security measures required of the Secretary. Allows the Secretary to establish guidelines for the secure storage of the electronic journal and communication technology recordings associated with notarial acts that use standard encryption technologies; establish any necessary additional guidelines for identity proofing and credential analysis; establish standards and processes for the technology communication to allow secure real-time communication; establish standards for tamper-evident technologies; require use of a communication technology provided by a third-party vendor that has presented evidence of compliance with industry standards; adopt rules to ensure the integrity, security, and authenticity of remote online notarizations, such as imposing additional educational requirements; and adopt rules regarding the performance of a notarial act as specified. Requires technology selected by a remote online notary, and communication technology or identity proofing selected by the notary, to conform with standards established by the Secretary. 

Deems a paper or tangible copy of an electronic document that a licensed attorney has certified to be in a tamper-evident format for which the attorney has detected no changes or errors in the electronic signature or other information in the electronic document, personally printed or supervised printing of the electronic document onto paper or other tangible medium, and has not made any changes or modifications to the electronic document or to the paper or tangible copy thereof other than the certification described [subsection (b)] to satisfy legal requirements that, as a condition of recording, filing, or submission, the document must comply with as to three specified criteria, including that the document is an original or in writing [subsection (a)]. Requires State and local officials charged with recordation to record a paper or tangible copy of a document otherwise entitled to be recorded, provided certification by a licensed attorney of the electronic document evidenced by certification that complies with three requirements. Provides a standard form of certificate which meets the requirements for certification; deems such a certificate attached to or made a part of a paper or tangible document prima facie evidence that the requirements of subsection (b) have been satisfied with respect to the document. Provides for the statute's application to real property. Defines document.

Provides for laws and court and NC State Bar opinions relating to the unauthorized practice of law to be unaffected by the new Article, including laws and opinions concerning real estate transactions. Explicitly prohibits a remote online notary who is not an NC licensed attorney from rendering services or advice that constitutes the practice of law. 

Makes conforming changes to GS 10B-2.

Effective January 1, 2022.