AnalysisSenate Bill 246 is a comprehensive new law with some important changes and several innovative and controversial provisions for electronic notarization. SB 246 implements new standards for identifying document signers, most notably in respect to specifying the exact forms of written identification Notaries may accept. SB 426 also commendably emphasizes that a document signer must be physically present before the Notary at the time of notarization and establishes standards for the safekeeping of the Notary’s physical seal.
These important new laws are overshadowed by the electronic notarization provisions of SB 246. Many of the new rules are taken from Article III of The Model Notary Act, such as the educational requirement, journal provisions and certain standards surrounding the security and use of electronic signatures and seals. NNA Executive Director Tim Reiniger consulted with the Secretary of State’s office on many provisions in the bill and provided drafts of sections that were incorporated in whole or in part.
However, SB 246 includes several controversial provisions. First, the law allows any attorney in good standing in any state to become an electronic Notary. Second, it also allows any person who is employed by a banking, trust or insurance company organized and regulated under the laws of the U.S. or any state to become an electronic Notary. This means that an attorney or resident of California or any other state could conceivably be commissioned as a Delaware electronic Notary. The state of Wisconsin is the only other state to have a provision like this. Wisconsin allows any U.S. resident to become a Notary, but the commission may only be used when a nonresident Notary is present within the state. Delaware goes much further in allowing electronic Notaries to perform eNotarizations outside the state and actually grants a presumption that an electronic notarial act is deemed to have been performed within the state whether or not it actually was. Third, in the event that the electronic Notary’s electronic signature or seal is lost, stolen or missing, the law requires the Secretary to “disable” the electronic technology the Notary uses to affix the signature and seal. This law suggests that the electronic notarization system used in Delaware may be a centralized or state-wide solution, or at minimum requires the Secretary to have access to the system Notary uses. Finally, while the NNA applauds the provision in the legislation allowing electronic Notaries to charge a maximum fee of $25 for each electronic notarization, we are not sure what to think of the provision essentially allowing the Secretary of State to charge a per transaction fee of up to $10 for each electronic notarization performed. It appears that Delaware is creatively seeking ways to add revenues to the state budget, capitalizing on the number of corporate documents and filings that are transacted within the state. Since this transaction fee may not be waived, it undoubtedly will be perceived as an “electronic notarization tax.” It remains to be seen whether this will spur or impede adoption of electronic notarization.
Read Senate Bill 246 (downloads a PDF of the enrolled bill).