LA House Bill 1192 | NNA

LA House Bill 1192

Notary Law Update: LA House Bill 1192

State: Louisiana

Summary:

HB 1192 creates a new class of Notaries who are only required to pass certain parts of the Louisiana Notary examination and may not perform certain notarial acts that Notaries who have passed all components of the state Notary examination may perform. Further, these Notaries may only notarize for their employers. HB 1192 requires these Notaries to post a much higher $20,000 bond and requires the employer to pay for it. The new law is only temporary; it will sunset on August 1, 2016 and any commissions issued under the provisions of the temporary law will expire on that date unless the Notary has passed all components of the statewide Notary examination.

Signed:  June 14, 2012

Effective:  January 01, 2013

Chapter: Act No. 829

Affects:

Adds Section 35:191(W) to the Louisiana Revised Statutes

Changes:
  1. Provides that any person who resides in a parish with a population of less than 40,000 and who passes the state Notary examination, except for the performance assessment component, during exams administered between Dec. 1, 2009, and Dec. 31, 2012, or after Jan. 1, 2013, and before Aug. 1, 2016, may be provisionally appointed as a Notary in and for that parish.
  2. Provides that a Notary commissioned under this new law has authority to exercise all the powers of a Louisiana Notary listed in R.S. 35:2, but may exercise notarial functions only within the course and scope of his employment and under the direction of a supervisor for the employer who is not a Notary commissioned under this new law. However, the new law prohibits a Notary from drafting and preparing: (a) a last will and testament or donation mortis causa; (b) a trust; or (c) any instrument that transfers title to immovable property including but not limited to an act of sale or donation.
  3. Defines “employer” to include only businesses that are in existence on the effective date of the new law, but not a business whose primary function is to provide Notary services, and provides that the exercise of any notarial functions under this new law shall be deemed to be within the course and scope of employment if: (a) the employer of the notary is a party to the act or other instrument being sworn to, acknowledged, or passed before the Notary, or the act or instrument is necessary or incidental to the business activities or operations of the employer; or (b) at least one of the persons appearing before the Notary to execute a notarial act or instrument is a former, current, or prospective client or customer of the employer.
  4. Provides that a Notary commissioned under this new law shall have jurisdiction within the parish of commission, and in any adjacent parish with a population of less than forty thousand where the employer of the Notary maintains an office.
  5. Requires persons appointed as a Notary under the provisions of this new law to obtain a $20,000 surety bond at the employer’s expense.
  6. Requires an employer to hold the Notary harmless for any claim made against his or her bond when the Notary is acting in the course and scope of the employment or under the direction of the employer.
  7. Provides that an employer shall not be liable to any person for any damages caused by the negligent or fraudulent errors or omissions by a Notary commissioned under this new law when the exercise of the notarial functions were outside the course and scope of employment.
  8. Requires all persons applying for a commission under the new law to submit a statement signed by the applicant and the applicant’s employer providing: (a) the name and principal business address of the employer; (b) the primary address at which the applicant will exercise notarial functions; and (c) an acknowledgment of the limits of the authority and jurisdiction of a commission issued under, and the penalties that may be imposed for violations of the limitations and prohibitions imposed by, this new law.
  9. Requires all Notaries commissioned pursuant to this new law to attend a Notary orientation class approved by the Secretary of State.
  10. Provides that if the employer terminates the employment of the Notary, or if the employer no longer wishes to be bound by the provisions of this new law with respect to any employee, the employer shall immediately send written notice to the Secretary of State, and the commission shall be automatically revoked unless the Notary takes specific action (see # 11 below).
  11. Provides that if the Notary commissioned under this new law voluntarily terminates employment, the Notary shall immediately send written notice to the Secretary of State, and the commission shall be assigned a status as follows: (a) provisional inactive status, until the Notary submits a new statement regarding a new employer (see #8 above), or (b) provisional inactive status, until the Notary passes the performance assessment component of the Notary examination. In either case, the Notary may not exercise notarial functions until the required employer statement has been received by the Secretary and the Notary’s status has been updated or the Notary passes the performance assessment component of the exam.
  12. Clarifies that a notarial act executed by a Notary commissioned under this new law shall not be deemed invalid or unenforceable solely on the basis that the act exceeded the authority or jurisdiction limitations imposed upon the Notary.
  13. Provides for revocation of a Notary’s commission issued under the new law upon a determination by the court or the Secretary of State that the Notary exceeded his or her authority, or upon violation of any other provision of law providing for the revocation or suspension of a Notary commission.
  14. Requires the Secretary of State to report back to the Legislature in writing on the administration and results of this new law on or before March 15, 2014 and 2015.
  15. Sunsets the provisions of this new law on August 1, 2016 and clarifies that any commission granted pursuant to this new law shall also expire on that date, except if the Notary has passed all components of the examination on or before August 1, 2016.
Analysis:

House Bill 1192 was introduced to address opposition to Senate Bill 259 among many Louisiana Notaries. SB 259 proposed to repeal the following powers of non-attorney Notaries: (1) drafting and preparing a last will and testament or donation mortis causa; (b) drafting and preparing a trust; and (c) drafting and preparing any instrument that transfers title to immovable property including but not limited to an act of sale or donation. SB 259 further proposed to require the Secretary of State to revise the statewide Notary Public examination by removing test questions which cover the repealed powers. The sponsors of SB 259 (mainly the banking industry according to the Secretary of State’s office) believed there were too few Notaries serving their industry because the statewide examination is far too difficult to pass. HB 1192 was the corrective to failed SB 259. It creates a new class of Notaries who are only required to pass certain parts of the Louisiana Notary examination and may not perform the acts listed above. Further, these Notaries may only notarize for their employers. HB 1182 requires these Notaries to post a much higher $20,000 bond and requires the employer to pay for it. The new law is only temporary; it will sunset on August 1, 2016 and any commissions issued under the provisions of the temporary law will expire on that date unless the Notary has passed all components of the statewide Notary examination.

Read the bill text.

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