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Law

SC Senate Bill 631

Notary Law Update: SC Senate Bill 631

State: South Carolina

Summary:

Senate Bill 631 enacts the NNA’s Model Electronic Notarization Act (MENA) in substantive form, authorizing South Carolina Notaries to perform electronic notarial acts.

Signed:  June 01, 2021

Effective:  June 01, 2021

Chapter: Act No. 85

Affects:
Adds Sections 26-2-5, 26-2-10, 26-2-20, 26-2-30, 26-2-40, 26-2-50, 26-2-60, 26-2-70, 26-2-80, 26-2-90, 26-2-100, 26-2-110, 26-2-120, 26-2-130, 26-2-140, 26-2-150, 26-2-160, 26-2-170, 26-2-180, and 26-2-190 to, and amends Section 26-1-160 of, the South Carolina Code.

Changes:

General

  1. Enacts the South Carolina Electronic Notary Public Act.
  2. Defines “capable of independent verification,” “electronic,” “'electronic document’ or ‘electronic record,’” “'electronic journal of notarial acts’ or ‘electronic journal,” “electronic notarial certificate,” “electronic notarization system,” “'electronic Notary public’ or ‘electronic Notary,’” “'electronic Notary seal’ or ‘electronic seal,’” “electronic signature,” “principal,” “public key certificate,” “record,” “sole control,” “tamper evident,” and “verification of fact.”
  3. Provides that Chapters 1 and 3 of Title 26 apply to all acts authorized by the new chapter unless the provisions of Chapters 1 and 3 directly conflict with it, in which case the provisions of the new chapter control when applied to electronic Notaries Public and electronic notarial acts.

Electronic Notarization Registration

  1. Requires Notaries to register with the Secretary of State if they want to perform electronic notarizations and provides rules for registration, including a $50 registration fee and a requirement to identify the technology the Notary intends to use.
  2. Clarifies that the technology a Notary selects to use to perform electronic notarizations must conform to any rules or regulations adopted by the Secretary of State.
  3. Prescribes the contents, as specified, of the application a Notary must complete for registering to perform electronic notarizations.
  4. Provides that upon an applicant’s fulfillment of the requirements for registration, the Secretary of State shall approve the application and issue the individual a unique registration number.
  5. Authorizes the Secretary of State to reject a registration application if the individual fails to comply with any section of the new chapter.
  6. Requires Notaries registering to perform electronic notarizations to take a course of sufficient length as determined and approved by the Secretary of State and pass an examination of the course.
  7. Clarifies that unless terminated pursuant to Section 26-2-140, the term of registration to perform electronic notarial acts shall begin on the registration starting date set by the Secretary of State and shall continue as long as the Notary's current commission remains valid.

Standards for Electronic Notarial Acts

  1. Specifies the following notarial acts may be performed as electronic notarial acts: (a) acknowledgments; (b) oaths and affirmations; (c) attestations and jurats; (d) signature witnessing; (e) verifications of fact; (f) certification that a tangible copy of an electronic record is an accurate copy of the electronic record; and (g) any other acts authorized by law.
  2. Requires a signer to appear in the presence of the Notary at the time of an electronic notarization.
  3. Requires a principal to be identified by the electronic Notary through personal knowledge or satisfactory evidence as defined in Chapter 1 of Title 26.
  4. Requires a Notary performing electronic notarizations to adhere to all applicable rules governing notarial acts in Chapter 1 of Title 26.
  5. Sets the maximum fees for electronic notarizations at $10 per signature, and allows a Notary to charge the maximum fee, a lesser fee, or no fee at all.
  6. Allows an electronic Notary to charge a travel fee, as prescribed.
  7. Requires an electronic Notary to conspicuously display in the Notary's places of business and Internet websites, or present to each principal or requester of fact outside of these places, an English-language fee schedule in not less than 10-point type.

Electronic Notarial Certificate and Electronic Seal

  1. Specifies the information components that must be included in an electronic notarial certificate: (a) the Notary's name as it appears on the Notary commission; (b) the electronic Notary's commission expiration date; (c) the Notary's electronic signature; (d) the electronic Notary's electronic seal; and (e) completed wording appropriate to the notarial act, as prescribed by law.
  2. Provides that an electronic Notary's electronic signature and electronic seal are considered reliable if they are: (a) unique to the electronic Notary; (b) capable of independent verification; (c) retained under the electronic Notary's sole control; (d) attached to or logically associated with the electronic document; and (e) linked to the data in such a manner that any subsequent alterations to the underlying document or electronic notarial certificate are tamper evident and may invalidate the electronic notarial act.
  3. Specifies the following information must be included in the electronic Notary's electronic seal: (a) the name of the electronic Notary exactly as it is spelled on the electronic Notary's commission; (b) the title “Notary Public”; (c) the words “State of South Carolina”; (d) the registration number indicating that the electronic Notary may perform electronic notarial acts; and (e) the expiration date of the electronic Notary's commission.
  4. Provides that the electronic seal of an electronic Notary may be a digital image that appears in the likeness or representation of a traditional physical Notary seal.
  5. Prohibits the electronic seal of an electronic Notary may not be used for any purpose other than performing electronic notarizations.
  6. Provides that only the electronic Notary whose name and registration number appear on an electronic seal shall generate that electronic seal.
  7. Requires an electronic Notary to attach his public key certificate and electronic seal to the electronic notarial certificate of an electronic record in a manner that renders any subsequent change or modification to the electronic record to be evident.
  8. Provides that an electronic Notary's electronic signature, in combination with his electronic seal, must be used only for the purpose of performing electronic notarial acts.
  9. Requires an electronic Notary to use an electronic notarization system that complies with the new laws and that has been registered with the Secretary of State to produce the electronic Notary's electronic signature and electronic seal in a manner that is capable of independent verification.
  10. Requires an electronic Notary to take reasonable steps to ensure that no other individual may possess or access an electronic notarization system in order to produce the electronic Notary's electronic signature or electronic seal.
  11. Requires an electronic Notary to keep in his sole control all or any part of an electronic notarization system for which the exclusive purpose is to produce the electronic Notary's electronic signature and electronic seal.
  12. Requires the Secretary of State to promulgate regulations necessary to establish standards, procedures, practices, forms, and records relating to an electronic Notary's electronic signature and electronic seal.
  13. Requires the electronic Notary's electronic seal and electronic signature to conform to all standards adopted by the Secretary of State.
  14. Requires an electronic Notary to safeguard the electronic Notary's public key certificate and electronic seal, and not allow them to be used by any other person.
  15. Requires an electronic Notary to immediately notify the Secretary of State of the loss or use by another person of the electronic Notary's public key certificate or electronic seal.
  16. Requires an electronic Notary to notify law enforcement and the Secretary of State immediately if the electronic Notary's electronic signature or seal is stolen or vandalized.
  17. Requires an electronic Notary to take reasonable steps to ensure that any registered device used to create the electronic Notary's electronic signature is current and has not been revoked or terminated by its issuing or registering authority.
  18. Provides that if the registration of the device used to create electronic signatures either expires or is changed during the electronic Notary's term of office, then the electronic Notary shall cease performing electronic notarizations until (a) a new device is duly issued or registered to the electronic Notary; and (b) an electronically signed notice is sent to the Secretary of State that includes the starting and expiration dates of any new registration term and any other new information at variance with the information in the most recently executed electronic registration form.

Electronic Journal

  1. Requires electronic Notaries to keep an electronic journal of each electronic notarization and specifies the required entries, as specified, to be recorded for each electronic notarial act.
  2. Prohibits an electronic Notary from recording a Social Security number in the electronic journal.
  3. Prohibits an electronic Notary from allowing the electronic journal to be used by any other Notary and from surrendering the electronic journal to an employer upon the electronic Notary's termination of employment.
  4. Clarifies that any party to the notarized transaction or party with a legitimate interest in the transaction may inspect or request a copy of an entry or entries in the electronic Notary's electronic journal, provided that (a) the party specifies the month, year, type of record, and name of the principal for the electronic notarial act, in a signed physical or electronic request; (b) the electronic Notary does not surrender possession or control of the electronic journal; (c) the party is shown or given a copy of only the entry or entries specified; and (d) a separate new entry is made in the electronic journal, explaining the circumstances of the request and noting any related act of copy certification by the electronic Notary.
  5. Allows an electronic Notary to charge a reasonable fee to recover any cost of providing a copy of an entry in the electronic journal of notarial acts.
  6. Allows an electronic Notary who has a reasonable and explainable belief that a person requesting information from the electronic Notary's electronic journal has a criminal or other inappropriate purpose to deny access to any entry or entries.
  7. Provides that all electronic notarial records required by statute or regulation may be examined and copied without restriction by a law enforcement officer in the course of an official investigation, subpoenaed by court order, or surrendered at the direction of the Secretary of State.
  8. Requires the Secretary of State to establish commercially reasonable standards for the preservation of electronic journals in the event of a resignation, revocation, or expiration of an electronic Notary commission, or upon the death of an electronic Notary, but not for a former electronic Notary whose commission has expired if, within 3 months, the electronic Notary commission is renewed.
  9. Requires an electronic Notary to safeguard the electronic Notary's journal, and not allow them to be used by any other person.
  10. Requires an electronic Notary to notify law enforcement and the Secretary of State immediately if the electronic Notary's electronic journal is stolen or vandalized.
  11. Requires an electronic Notary to immediately notify the Secretary of State of the loss or use by another person of the electronic Notary's electronic journal.
  12. Requires upon the resignation, revocation, or expiration of an electronic Notary commission or the death of an electronic Notary, the electronic Notary or his personal representative to erase, delete, or destroy the coding, disk, certificate, card software, file, or program that enables electronic affixation of the electronic Notary's official electronic signature, but these requirements do not apply to a former electronic Notary who renews his commission within 3 months of the expiration of his previous commission.

Electronic Notarization Systems

  1. Requires an electronic notarization system to comply with the new laws and any regulations promulgated by the Secretary of State pursuant to Section 26-2-190.
  2. Requires an electronic Notary solution provider to be registered with the Secretary of State pursuant to the new chapter before making available to South Carolina electronic Notaries any updates or subsequent versions of the electronic Notary solution provider's electronic notarization system.
  3. Requires an electronic notarization system to require access to the system by a password or other secure means of authentication.
  4. Requires an electronic notarization system to enable an electronic Notary to affix the electronic Notary's electronic signature in a manner that attributes the signature to the electronic Notary.
  5. Requires an electronic notarization system to render every electronic notarial act tamper evident.
  6. Provides that if an electronic Notary commission expires or is resigned or revoked, or if the electronic Notary dies or is adjudicated as incompetent, then the electronic Notary or his personal representative or guardian shall, within 3 months, dispose of all or any part of the electronic notarization system that had been in the electronic Notary's sole control for which the exclusive purpose was to perform electronic notarial acts, but this requirement does not apply to a former electronic Notary whose previous commission expired, is recommissioned as a Notary and reregistered to perform electronic notarizations within 3 months after commission expiration.
  7. Requires any person wanting their electronic notarization system to be used in South Carolina to submit a registration with the Secretary of State before making the system or any updates to the system available for use to South Carolina electronic Notaries.

Liability, Sanctions, Misconduct, and Criminal Acts

  1. Provides that the liability, sanctions, and remedies for the improper performance of electronic notarial acts, or for providing false or misleading information in registering to perform electronic notarial acts, by an electronic Notary are the same as provided by law for the improper performance of non-electronic notarial acts.
  2. Authorizes the Secretary of State to terminate an electronic Notary's registration for (a) the submission of an electronic registration form containing a material misstatement or omission of fact; (b) the failure to maintain the capability to perform electronic notarial acts; or (c) official misconduct by the electronic Notary.
  3. Provides that if the Secretary of State terminates an electronic Notary's registration, then the Secretary shall send written notice by certified mail to the electronic Notary at his last known address and that a person who has had his electronic Notary registration terminated has 30 days from the receipt of the notice to appeal the termination by filing a request for a contested case hearing with the South Carolina Administrative Law Court.
  4. Provides that neither resignation nor expiration of a Notary commission or of an electronic Notary registration precludes or terminates an investigation by the Secretary of State into an electronic Notary's conduct, which may be pursued to a conclusion when it must be made a matter of public record whether the finding would have been grounds for the termination of the electronic Notary's commission or registration.
  5. Provides it is a misdemeanor with a fine of up to $5,000 or imprisonment for up to 1 years, or both for knowingly: (a) acting as or otherwise impersonating an electronic Notary, if that person is not an electronic Notary; (b) obtaining, concealing, damaging, or destroying the coding, disk, certificate, card, token, program, software, or hardware that is intended exclusively to enable an electronic Notary to produce a registered electronic signature, electronic seal, or single element combining the required features of an electronic signature and electronic seal; or (c) soliciting, coercing, or in any way influencing an electronic Notary to commit official misconduct.
  6. Provides that the sanctions of the new law do not preclude other sanctions and remedies provided by law.

Other Provisions

  1. Provides for the authentication by the Secretary of State of electronic notarial acts and authorizes the Secretary to charge $10 for an electronic certificate of authority.
  2. Authorizes the Secretary of State to promulgate and enforce any regulations and create and enforce any policies and procedures necessary for the administration of the new laws.
  3. Clarifies that nothing in the Electronic Notary Public Act contravenes the South Carolina law that requires a licensed South Carolina attorney to supervise a closing.
  4. Clarifies that electronic online Notary applications will not be accepted for processing until the administrative rules are in effect and vendors of technology are approved by the Secretary of State.
  5. Clarifies that the Act does not apply to wills and trusts.
Analysis:

South Carolina Senate Bill 631 is an outlier in a period in which states in droves are enacting remote online notarization bills. Senate Bill 631 authorizes Notaries to perform electronic notarizations in the physical presence of the Notary. South Carolina is one of a slim number of states that have not seriously considered a remote online notarization bill. Thus, the state has taken an intermediate step towards allowing Notaries to use technology to perform notarial acts with Senate Bill 631. Senate Bill 631 is substantively based on the NNA’s Model Electronic Notarization Act of 2017. Before South Carolina Notaries can register to perform electronic notarizations, they must complete an educational course and pass an exam. They must keep an electronic journal of all electronic notarizations. They must use a public key certificate to render the electronic notarial act tamper evident. The Secretary of State must adopt rules to implement the new act prior to Notaries applying for registration to perform electronic notarizations.

Read the bill text.

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