TX House Bill 1217

Legislation

State: Texas
Signed: June 01, 2017

Effective: July 01, 2018
Chapter: 340

Summary

House Bill 1217 allows Notaries to apply for an online Notary commission and perform electronic notarizations by means of audio-video communication.

Affects

Amends Civil Practices and Remedies Code Sections 121.006 121.016, and adds a new Subchapter C Government Code Chapter 406.

Changes

Definitions

Defines “credential analysis” as a process or service operating according to criteria approved by the Secretary of State through which a third person affirms the validity of a government-issued identification credential through review of public and proprietary data sources.
Defines “electronic notarial certificate” as the portion of a notarized electronic document that is completed by an online Notary and contains the following: (a) the online Notary’s electronic signature, electronic seal, title, and commission expiration date; (b) other required information concerning the date and place of the online notarization; and (c) the facts attested to or certified by the online Notary in the particular notarization.
Defines “identity proofing” as a process or service operating according to criteria approved by the Secretary of State through which a third person affirms the identity of an individual through review of personal information from public and proprietary data sources.
Defines “online notarization” as a notarial act performed by means of two-way video and audio conference technology that meets the standards adopted under Government Code 406.104.
Defines “online Notary” as a Notary who has been authorized by the Secretary of State to perform online notarizations.
Defines “remote presentation" as transmission to the online Notary through communication technology of an image of a government-issued identification credential that is of sufficient quality to enable the online Notary to: (a) identify the individual seeking the online Notary 's services; and (b) perform credential analysis.

Online Notary Commission

Provides that a Notary or an applicant for appointment as a Notary may apply to the Secretary of State to be appointed and commissioned as an online Notary.
Lists the qualifications of an online Notary, including: (a) satisfying the qualification requirements for appointment as a Notary Public; (b) paying the application fee; and (c) electronically submitting to the Secretary of State an application in the form prescribed by the Secretary.
Provides that the application for an online Notary must include: (a) the applicant's name to be used in acting as an online Notary; (b) a certification that the applicant will comply with the Secretary of State's standards developed under Government Code 406.104; and (c) the applicant’s e-mail address.
Clarifies that an online Notary is considered a Texas Notary and is subject to the same laws and rules required of Texas Notaries.
Clarifies that an online Notary may perform notarial acts as a Texas Notary and an online Notary.

Standards for Online Notarial Acts

Clarifies that an individual may personally appear before a notarial officer by physically appearing or by interactive two-way audio and video communication.
Permits online Notary to perform an online notarization authorized under Government Code 406.107 that meets the requirements of the statute and any rules adopted regardless of whether the principal is physically located in Texas at the time of the online notarization.
Requires an online Notary to verify the identity of a person creating an electronic signature at the time that the signature is taken by using two-way video and audio conference technology that meets the requirements by the following methods: (a) personal knowledge of the person creating the electronic signature; or (b) each of the following: (i) remote presentation by the person creating the electronic signature of a government-issued identification credential, including a passport or driver's license, that contains the signature and a photograph of the person; (ii) credential analysis of the credential described in (b) above; and (iii) identity proofing of the person.
Requires an online Notary to take reasonable steps to ensure that the two-way video and audio communication used in an online notarization is secure from unauthorized interception.
Requires the electronic notarial certificate for an online notarization to include a space to indicate the type of appearance – physical or by means of audio-video communication – by which an individual appeared before a Notary and further requires the certificate for an online notarization to include a notation that the notarization is an online notarization.
Allows an online Notary or the online Notary’s employer to charge a maximum $25 fee for performing an online notarization.

Electronic Seal and Signature

Requires an online Notary to take reasonable steps to ensure that any registered device used to create an electronic signature is current and has not been revoked or terminated by the device's issuing or registering authority.
Requires an online Notary to keep the online Notary's electronic signature and electronic seal secure and under the online Notary's exclusive control.
Prohibits an online Notary from allowing another person to use the online Notary's electronic signature or electronic seal.
Clarifies that an online Notary may use the online Notary's electronic signature only for performing online notarizations.
Provides that an online Notary shall attach the online Notary's electronic signature and seal to the electronic notarial certificate of an electronic document in a manner that is capable of independent verification and renders any subsequent change or modification to the electronic document evident.
Requires an online Notary to immediately notify an appropriate law enforcement agency and the Secretary of State of the theft or vandalism of the online Notary's electronic signature or electronic seal.
Requires an online Notary to immediately notify the Secretary of State of the loss or use by another person of the online Notary's electronic signature or electronic seal.

Records of Online Notarial Acts

Requires an online Notary to keep a secure electronic record of electronic documents notarized using audio-video communication.
Requires the electronic record to include the following entries: (a) the date and time of the notarization; (b) the type of notarial act; (c) the type, the title, or a description of the electronic document or proceeding; (d) the printed name and address of each principal involved in the transaction or proceeding; (e) evidence of identity of each principal involved in the transaction or proceeding; (f) a recording of any video and audio conference that is the basis for satisfactory evidence of identity and a notation of the type of identification presented as evidence; and (g) the fee, if any, charged for the notarization.
Requires the notation in the electronic record regarding the identification of the principal for the online notarial act to include one of the following: (a) a statement that the person is personally known to the online Notary; (b) a notation of the type of identification document provided to the online Notary; (c) a record of the identity verification made under Government Code 406.110, if applicable; or (d) the following: (i) the printed name and address of each credible witness swearing to or affirming the person's identity; and (ii) for each credible witness not personally known to the online Notary, a description of the type of identification documents provided to the online Notary.
Requires an online Notary to take reasonable steps to: (a) ensure the integrity, security, and authenticity of online notarizations; (b) maintain a backup for the online Notary’s electronic record; and (c) protect the backup record from unauthorized use.
Requires the online Notary’s electronic record to be maintained for at least five years after the date of the transaction or proceeding.
Requires an online Notary to keep the online Notary's electronic record under the online Notary's exclusive control.
Prohibits an online Notary from allowing another person to use the online Notary's electronic record.
Requires an online Notary to immediately notify an appropriate law enforcement agency and the Secretary of State of the theft or vandalism of the online Notary's electronic record.
Requires an online Notary to immediately notify the Secretary of State of the loss or use by another person of the online Notary's electronic record.

Other Provisions

Provides that in the event of a conflict in the new law governing online notarization in Civil Practices and Remedies Code Section 121.016, Government Code Chapter 406 controls with respect to the online notarization.
Requires the Secretary of State by rule to develop and maintain standards for online notarization, including standards for credential analysis and identity proofing.
Requires an online Notary whose commission terminates to destroy the coding, disk, certificate, card, software, or password that enables electronic affixation of the online Notary's official electronic signature or seal, and further requires the online Notary to certify compliance to the Secretary of State.
Clarifies that a former online Notary whose commission terminated for a reason other than revocation or a denial of renewal is not required to destroy the means for creating the online Notary’s electronic signature if the former online Notary is recommissioned with the same electronic signature and seal within three months after the former online commission terminated.
Provides that a person who, without authorization, knowingly obtains, conceals, damages, or destroys the certificate, disk, coding, card, program, software, or hardware enabling an online Notary to affix an official electronic signature or seal commits a Class A misdemeanor.

Analysis

With the enactment of HB 1217, Texas becomes the third state to allow Notaries to perform notarial acts by means of audio-video communication. The new law contains provisions similar to and different from the laws in Virginia and Montana, the two other states with remote notarization provisions. Like Virginia and Montana, the Texas authorization to perform remote notarizations is permissive. In addition, all three states require a Notary who performs remote notarizations to be a regular Notary Public of the state first; however, Texas follows Virginia in requiring online Notaries to have a separate commission to perform online acts. It also follows Virginia in requiring notarial acts performed remotely to be performed on electronic records, and not on electronic or paper records as in Montana. Like Virginia and Montana, the new Texas law defines “personal appearance” to be either a physical appearance before a Notary or an appearance by means of two-way audio-video communication. However, unlike Virginia and Montana, the Texas law requires the certificate for an online notarial act to indicate that the appearance was accomplished using audio-video communication. Texas follows Virginia and Montana in requiring Notaries to keep a record of each online notarization which includes a recording of the audio-video communication session. It also, like Texas, allows Notaries to charge a maximum fee of $25 for an online notarization, but it also allows an employer of an online Notary to charge this fee. HB 1217 takes effect on July 1, 2018.

Read House Bill 1217.