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NC Administrative Rules (2024 -- Part 2)

Rule/Regulation

State: North Carolina

Effective: July 01, 2024

Summary

The North Carolina Department of the Secretary of State has adopted rules related to Electronic Notaries, journals, filings, forms, and payments to the Department.

Affects

In Title 18, Chapter 7 of the North Carolina Administrative Code:

  1. Adds the following rules to Subchapter 07B: .0203, .0204, .0206, 0207, .0208, .0301, .0302, .0303, .0304, .0305, .0306, .0307, .0308, .0309, .0310, .0311, .0312, .0402, .0403, .0404, .0405, and 0406.
  2. Adds the following rules to Subchapter 07F: .0302, .0303, .0304, .0305, .0403, .0404, .0503, .0509, .0512, .0513, .0601, .0602, .0706, .0707, .0708, .0709, .0807, .0809, .0810, .0811, .0812, .0813, .0814, .0902, .0903, .0904, .0905, .0906, .1003, .1004, .1103, .1104, .1105, .1106, .1107, .1108, .1109, .1110, .1111; subtitle 07I rules .0101, .0102, .0103, .0104, .0105, .0106, .0202, .0203, .0204, .0205, .0206, .0207, .0208, .0209, .0210, .0212, .0301, .0302, .0303, .0304, .0305, .0306, .0307, 0308, .0401, .0402, .0403, .0404, .0405, .0406, and .0407.
  3. Amends the following rules of Subchapter 07B: .0201, .0202, .0205, .0401.
  4. Amends the following rules of Subchapter 07F: .0101, .0102, .0401, .701, .0702, .0704, .0705, .0801, .0802, .0804, .0805, .0807, .0808, .0901, .1001, .1002, .1101, and .1102.
  5. Repeals the following rules of Subchapter 07F: .0505-.0508, .0803 and .0806.
Changes

Fees Paid to Department of State

  1. Requires filers who pay fees in person to the Department of State must be paid by (a) a personal check, (b) a money order, (c) a cashier’s check, (d) cash, or (e) a credit or debit card, and further clarifies that a check, money order, or cashier’s check must be made payable to the NC Department of the Secretary of State.
  2. Requires filers who pay fees online to pay by (a) ACH, (b) a credit card, or (c) a credit card.
  3. Requires filers who pay fees by a delivery service, including USPS, to pay using one of the following made payable to the NC Department: (a) a personal or business check, (b) a money order, or (c) a cashier's check.
  4. Imposes a $35 (formerly $25) fee to a filer who tenders a payment dishonored by a bank or financial institution.
  5. Strikes the prior provisions stating the Department will deny or revoke the commission of a filer whose payment was dishonored by the institution upon which is was issued.
  6. Provides that the Department shall not continue to process a filing for which processing has not been completed if the Department receives notice that a payment has been dishonored.
  7. Lists the following actions the Department will take if the Department has received notice of a dishonored payment: (a) the filing shall be deemed incomplete, (b) the filing will be voided if payment is not made in full within 15 calendar days of the dishonor, and (c) if any information has been posted on the Department's website indicating that commissioning, registration, licensure, or approval has occurred, the Department will remove the information from the website or annotate the entry as incomplete or void.

Filings with the Department

  1. Requires a filer to submit a form prescribed in 18 NCAC 07B .0400 or if a form is not prescribed, provide the information required by GS Chapter 10B or rules in 18 NCAC Chapter 07.
  2. Authorizes filings to be by electronic means unless paper filing is permitted pursuant to GS Chapter 10B or 18 NCAC 07B .0303.
  3. Provides that paper filings are permitted (a) where the Department has not established electronic means for submittal of a filing; or (b) in the case of a traditional Notary Public, initial applications, recommissioning applications, and affidavits, criminal records, and other documents required to be submitted with applications by Notary, Electronic Notary, or Notary instructor applicants pursuant to GS Chapter 10B or the rules in 18 NCAC Chapter 07.
  4. Provides that inapplicable questions or items in a filing should be completed with “not applicable” or “N/A” but in no instance should be left blank.
  5. Clarifies that if a form does not have enough space to provide a complete and accurate response, a filer should include an attachment with the form and requires a filer to note “See Attachment” at the location of a question or request for information for which an attachment is provided and identify on the attachment to which question or request for information the additional information relates.
  6. Requires a person signing a form for a technology provider or business entity to be duly authorized by law or the entity to sign and state the signer's title, position, and authorization to sign.
  7. Requires a form preparer signing for a technology provider or business entity to sign in the space provided for a preparer's signature on a form or document and note "form preparer" next to the signature in the space provided for a preparer's signature on a form.
  8. Clarifies that a filing is incomplete for failure to provide information, a signature, or a notarial act required pursuant to GS Chapter 10B or the rules in 18 NCAC Chapter 07.
  9. Provides that the Department will reject a filing if it is incomplete and not remedied by the filer within the time specified by the Department.
  10. Clarifies that a form or document is deemed filed on the day that it is deemed complete and will not relate back to the date the filing was received.

Notary and Electronic Notary Forms

  1. Prescribes the form and the information, as specified, for the Notary Public certificate of appointment form.
  2. Prescribes the form and the information, as specified, for the Electronic Notary Public registration form.
  3. Prescribes the form and the information, as specified, for the Electronic Notary Public selection of technology providers form.
  4. Prescribes the form and the information, as specified, for the Electronic Notary Public notice of change of technology provider form.

Electronic Notary Registration

  1. Strikes the definitions of “applicant,” “under the exclusive control of the Notary,” and “under the exclusive control of the Notary.”
  2. Prohibits an Electronic Notary Public from performing a remote electronic notarial act until the Electronic Notary has complied with the requirements of 18 NCAC Chapter 07F.
  3. Requires an Electronic Notary applicant to hold a valid North Carolina Notary commission and  affirm that the applicant continues to meet the qualifications to hold the Notary commission.
  4. Clarifies that the Department shall develop the training course and examination for Electronic Notary registration and train certified Notary instructors who are registered as Electronic Notaries to teach the training course and administer the examination.
  5. Provides that before submitting an application for registration as an Electronic Notary Public, an individual shall attend and successfully complete an Electronic Notary course taught by a certified Notary instructor.
  6. Provides that before performing a remote electronic notarization, Electronic Notaries Public registered prior to July 1, 2024, must either (a) successfully complete a remote electronic notarization course module or (b) successfully complete an Electronic Notary class including training on remote electronic notarization.
  7. Requires each Electronic Notary course student to be identified by the certified Notary instructor through personal knowledge or satisfactory evidence.
  8. Sets the passing score on the Electronic Notary course examination at 80 percent or higher.
  9. Requires an Electronic Notary applicant to submit the registration form prescribed in 18 NCAC 07B .0404.
  10. Requires an Electronic Notary applicant to submit a registration form within 3 months of successfully completing the Electronic Notary course, and that for the purposes of this Rule, "month" carries the definition in GS 12-3(3).
  11. Requires an Electronic Notary applicant to have provided all notices to the Department required by GS Chapter 10B and the rules in 18 NCAC Chapter 07 before submitting an application.
  12. Provides that a registration not submitted within 3 months of successfully completing the Electronic Notary course will be denied and the applicant must (a) successfully complete the Electronic Notary course again, (b) submit a new application, and (c) pay the applicable fees.
  13. Provides that the Department will notify the Notary Public that the Notary is qualified by electronically issuing an Electronic Notary Registration Certificate to the Electronic Notary Public.
  14. Clarifies that the applicant's Electronic Notary Public registration shall be effective as of the date stated on the registration certificate.
  15. Clarifies that an Electronic Notary desiring to reregister and who does not apply for reregistration at the same time the Notary applies for recommissioning shall comply with 18 NCAC 07F .0905.
  16. Provides that an Electronic Notary who does not apply for reregistration at the same time that the Notary applies for recommissioning as a traditional Notary and who later desires to reregister as an Electronic Notary must (a) successfully complete the Electronic Notary course again, (b) apply for reregistration using the form prescribed in 18 NCAC 07F .0404, and (c) pay the applicable fee.
  17. Provides that 18 NCAC 07F .0500 applies to an Electronic Notary applicant who is reregistered as an electronic Notary Public. 

Selection of Electronic Notary Technology Providers

  1. Prohibits a Notary Public from performing any electronic or remote electronic notarial act until (a) the Notary has received the electronic Notary registration certificate, and (b) the Electronic Notary Public has provided notice to the Department of all technology providers pursuant to Rule .0601 of Subchapter 07F of the rules.
  2. Requires an Electronic Notary to use the form prescribed in 18 NCAC 07B .0405 to notify the Department of all technology providers used (a) to affix the Electronic Notary's electronic signature, (b) to affix the Electronic Notary's seal, (c) as the means to create and maintain the Electronic Notary's electronic journal and a backup copy of the journal, (d) as the custodian of the Electronic Notary's journal; and (e) as the platform that the Electronic Notary will use if the Notary intends to perform remote notarial acts.
  3. Requires an Electronic Notary to use only technology providers approved or licensed by the Department and listed on the Department's website.
  4. Provides that upon electronic request of a technology provider, the Department shall report a Notary Public's status as an Electronic Notary Public registered to perform electronic and remote electronic notarizations.

Electronic Notary Signature

  1. Requires an Electronic Notary to (a) electronically sign the electronic notarial certificate, and (b) verify that the image of the Electronic Notary's handwritten electronic signature is an accurate representation of the Notary's handwritten signature.
  2. Requires an Electronic Notary public to ensure that the Electronic Notary's electronic signature complies with GS Chapter 10B and the rules in Subchapter 07F each time it is affixed.
  3. Requires an Electronic Notary shall review the Electronic Notary's electronic signature for accuracy before the signature is used for the first time.
  4. Prohibits an Electronic Notary from affixing the Electronic Notary's electronic signature until: (a) the principals have appeared before the Electronic Notary as required by GS Chapter 10B, Article 2, (b) the principals have been identified, (3) the oath or affirmation has been administered, if required, (4) the principals have affixed their signatures to the electronic document or acknowledged them, if applicable, and (5) the journal entry has been made in accordance with the rules in 18 NCAC 07I.
  5. Provides that after the Electronic Notary affixes an electronic signature, and before the electronic Notary commits the signature, the Electronic Notary must review the electronic signature to ensure that it (a) is present on the notarial certificate, (b) is legible, and (c) does not obscure the notarial certificate, any content in the notarial certificate, or any content in the document being notarized.

Electronic Notary Seal

  1. Requires an Electronic Notary to (a) electronically affix the Electronic Notary seal and (b) verify that the image is an accurate representation of the seal.
  2. Requires an Electronic Notary to ensure that the Electronic Notary's Electronic Notary seal has a visible border, a physical appearance that replicates the appearance of an inked seal on paper with the size and shape required by GS 10B-37(c) and that includes an identifier assigned by the Department to the producer of the electronic seal.
  3. Requires an Electronic Notary to ensure that the electronic Notary seal has inside its border (a) the information required by GS 10B-117(1), (2), and (4), (b) the words (i) "State of North Carolina", (ii) "North Carolina", or (iii) the abbreviation "N.C.", (c) the name of the county of commission with either (i) the word "County" or (ii) the abbreviation "Co.", and (d) the expiration date of the Electronic Notary's commission.
  4. Provides that only the Electronic Notary whose commission name and county of commission is incorporated into the electronic seal is permitted to apply the Electronic Notary's Electronic Notary seal to an electronic document.
  5. Requires an Electronic Notary to ensure that the Electronic Notary's electronic seal complies with GS Chapter 10B and the rules Subchapter 07F each time it is affixed.
  6. Clarifies that an Electronic Notary's electronic seal shall include no information or images other than those required by Rule .0807 of Subchapter 07F.
  7. Requires an Electronic Notary to review the electronic seal for compliance with the rules in 18 NCAC 07F .0811 before the seal is used for the first time.
  8. Prohibits an Electronic Notary from affixing the Electronic Notary's electronic seal until: (a) the principals have appeared before the Electronic Notary as required by GS Chapter 10B, Article 2, (b) the principals have been identified, (c) the oath or affirmation has been administered, if required, (d) the principals have affixed their signatures to the electronic document or acknowledged them, if applicable, and (e) the journal entry has been made in accordance with the rules in 18 NCAC 07I.
  9. Provides that after the Electronic Notary affixes an Electronic Notary seal, and before the Electronic Notary commits the seal, the Electronic Notary must review the electronic seal to ensure that it (a) is present on the notarial certificate, (b) is legible, and (c) does not obscure the notarial certificate, any content in the notarial certificate, or any content in the document being notarized.
  10. Provides that after an Electronic Notary has complied with the requirements of Sections .0700 and .0800 of Subchapter 07F with regard to review of signatures and seals after affixing them, the Electronic Notary must (a) ensure that the required journal entry has been made, and (b) then “commit” (i) the electronic notarial signature, (ii) the electronic notarial seal. and (iii) the content of the journal entry. (Note: The term “commit” essentially means that the Electronic Notary clicks or taps the button or option in the approved electronic notarization system to finally and irreversibly perform or complete the in-person electronic or remote electronic notarial act.)

Confidentiality, Security, and Records Retention

  1. Provides that neither the employer nor any of the employer's employees or agents shall use or permit the use of an Electronic Notary seal or electronic signature by anyone other than the Electronic Notary to whom it is registered.
  2. Requires the employer of the Electronic Notary upon the cessation of employment of an Electronic Notary Public, the employer of the Electronic Notary to: (a) have no control of the Electronic Notary's electronic seal or (b) eliminate the ability of any other person to use the former Electronic Notary employee's electronic seal and electronic signature.
  3. Requires an Electronic Notary to limit access to the Electronic Notary signatures, electronic seals, and journals by complying with the provider's requirements for the use of means of authentication approved by the Department.
  4. Requires an Electronic Notary Public to maintain a copy of the Electronic Notary's electronic journal for 10 years after the last notarial act.
  5. Prohibits an Electronic Notary from sharing the means of authentication that the Electronic Notary uses to access an electronic notarization system with anyone.
  6. Requires a Notary Public to maintain an exact backup copy of the Notary's electronic journal.
  7. Authorizes a Notary Public to maintain the backup copy of the electronic journal on paper or as an electronic document on a separate physical device.

Continuing Obligations of Electronic Notaries

  1. Provides that when an Electronic Notary Public performs a remote electronic notarization, the remotely located principal shall appear before the Electronic Notary at the time of notarization using communication technology.
  2. No longer specifies that when taking an acknowledgment, the signature of the acknowledger must be separately affixed in the case when a document is executed on behalf of an entity and the document does not adversely affect the claim, right, or obligation of another.
  3. Prohibits an Electronic Notary public from using the Electronic Notary's electronic signature and electronic seal to notarize an ink signature signed by hand.
  4. Provides that within 10 business days of an Electronic Notary public choosing to use a different technology provider, an Electronic Notary shall notify the Department using the form described in 18 NCAC 07B.
  5. Prohibits an Electronic Notary Public from performing an electronic notarial act or a remote notarial act if there is (b) a complete technological failure that impedes the performance of the notarial act, or (b) a partial technological failure that the Electronic Notary decides warrants termination of the transaction.
  6. Authorizes an Electronic Notary to continue and complete an electronic or remote electronic notarial transaction if the Electronic Notary concludes that any technological failure (a) has been resolved, (b) will not impair performance of the notarial act; and (c) will not discredit the integrity of the notarial certificate, seal, or journal.
  7. Requires an Electronic Notary to notify the Department within 10 business days of the date on which (a) the Electronic Notary cancels a contract or subscription with a technology provider, or (b) the Electronic Notary is prevented by the provider from accessing the technology provider's services.
  8. Requires an Electronic Notary to notify the Department within 10 business days if the technology provider takes actions that (a) suspend or halt the provider's operations or the availability of its technology, or (b) impair the ability of the Electronic Notary to perform notarial functions.
  9. Clarifies that a notice pursuant to 18 NCAC 07F .1109 or .1110 must include (a) the reason for the notice and (b) any other information the Electronic Notary thinks may help the Department to assess the action of the provider.

General and Basic Journal Provisions

  1. Defines “canceled act,” “journal,” “mode of notarial act,” and “supplemental information” that apply to new Subchapter 07I.
  2. Requires an Electronic Notary public who performs electronic notarial acts shall maintain an electronic journal in conformity with the rules in this Subchapter.
  3. Clarifies that a Notary Public performing a traditional notarial act who maintains a journal in conformity with the rules in Subchapter 07I shall be deemed to have complied with G.S. 10B-38.
  4. Clarifies that a Notary journal is the property of the Notary.
  5. Provides that a Notary Public is the only person who can make entries into the Notary's journal, unless otherwise permitted for traditional notaries by GS Chapter 10B or 18 NCAC 07I .0106.
  6. Allows only principals, credible witnesses and designees of principals pursuant to GS 10B-20(e) to make entries in the Notary’s journal by entering their signatures.

Journal Form and Format

  1. Provides that electronic notarizations and remote electronic notarizations shall be documented in an electronic journal that is maintained as an electronic document.
  2. Authorizes a Notary Public to maintain an electronic journal that includes entries for any of these acts that the Notary is qualified to perform: (a) traditional notarial acts, (b) electronic notarial acts, and (c) remote electronic notarial acts.
  3. Requires entries in a tangible journal to be (a) entered in permanent ink, and (b) in chronological order.
  4. Requires a tangible journal to (a) be made in a bound journal into which pages cannot be inserted, (b) have on the first page the name of the Notary Public as commissioned, the commission date of the Notary, and the county of the commission, and (c) have sequentially numbered pages.
  5. Provides when a person responds to a request from the Department for all or part of a Notary Public's journal, the person shall submit the journal together with a transmittal document containing (a) the name on the Notary's commission, (b) the most recent commission date of the Notary, and (c) the dates of the first and last entries in the journal.
  6. Requires the journal to contain entries by the Notary Public that document all notarial acts completed by the Notary or canceled.
  7. Provides that except as set out in 18 NCAC 07I .0209, a Notary Public who maintains a journal must state in the journal whether each notarial act entered into the journal is: (a) traditional, (b) electronic, or (c) remote electronic.
  8. Provides that a Notary Public who enters only a single mode of notarial act in a journal may (a) make a single notation of the mode of notarial acts at the beginning of the journal; and (b) omit the notations required by 18 NCAC 07I .0208, and further clarifies that an example would be a journal first-page statement that the journal documents only traditional notarial acts.
  9. Requires a Notary Public to designate in the journal whether the type of a notarial act is: (a) an acknowledgement, (b) the taking of a verification or proof, (c) an administration of an oath or affirmation, (d) a notarization of an absentee voter application, or (e) an inventorying of a safe deposit box pursuant to GS 53C-6-18(a).
  10. Provides if a Notary Public performs both employer-related and non-employer related notarial acts, the Notary may maintain (a) a separate journal for each of the employer- related and non-employer related notarial acts or (b) a single journal reflecting all notarial acts.
  11. Clarifies that for at least 10 years after the last notarial act entered into a journal by a Notary Public, the journal or the backup copy of the journal must be retained by (a) the Notary or (b) a designated custodian.
  12. Requires a Notary Public to only use an electronic journal that permits printing the contents.

Journal Contents

  1. Requires Notaries public to enter the following information in the journal for each notarial act: (a) the date and time at the Notary's location that the notarial act occurs, (b) the name of each principal, (c) the type and mode of notarial act performed, (d) the title of the document notarized, if any, (e) how the identity of each principal was determined, (f) the type of satisfactory evidence, if any, (g) the addresses of each principal as shown on any documents used as satisfactory evidence, (h) the name, contact information, and signature  of the credible witness (in a traditional journal), if any, (i) the signature of a credible witness has been added to the electronic journal by the Notary, if any, (j) the signature of each principal in a tangible journal or the Notary's addition of each principal's acknowledged signature to an electronic journal, (k) information required by 18 NCAC 07K .0203 for any fees charged, and (l) designation of each notarial act as employer- related or non-employer related if the journal includes both categories of notarial acts.
  2. Provides that in addition to the required journal entries listed in 18 NCAC 07I .0302, for each remote electronic notarial act completed, an Electronic Notary Public must enter in the journal (a) the locations of the principals and Electronic Notary at the time of the act, (b) the method of establishing the location of the remotely located principals, (c) the names of any individuals who are physically present at the same place as the remotely located principals; and (d) the names of any individuals in addition to the principals and those listed in (c) above who are present remotely using the communication technology during the notarial transaction process.
  3. Authorizes a Notary Public to include additional information in the journal regarding an employer-related electronic notarial act if (a) the employer so requests, (b) the request is made before the Notary commits the journal entry, and (c) in the judgment of the Electronic Notary, the information is directly related to the notarial act, and clarifies that a loan origination number or a client number is an example of information directly related to the notarial act.
  4. Requires an Electronic Notary Public to include additional information in the journal if: (a) the notarial act is a remote electronic notarial act, (b) the requestor is a party involved in the transaction, (c) the request is made before the Notary commits the journal entry, and (d) in the judgment of the Electronic Notary, the information is directly related to the notarial act.
  5. Provides that if a Notary Public receives a request for inclusion of additional information in the journal, the Notary shall note in the journal (a) who requested inclusion of the information, and (b) if the Notary refused to include requested information, the reason the Notary refused to do so.
  6. Prohibits a Notary Public who performs both employer-related and unrelated notarial acts from providing the Notary's employer with (a) information regarding the notarial acts unrelated to the employer or (b) copies of, or access to, unrelated notarial act entries in the journal.
  7. Authorizes a Notary Public to add supplemental information to a journal if (a) the Notary does not in any way change the original committed journal entry and (b) the Notary specifies the journal entry to which the supplemental information relates.
  8. Requires a Notary Public who maintains an electronic journal to note in the journal complete or partial technological failures that lead the Notary to terminate the transaction pursuant to 18 NCAC 07F .1107.
  9. Authorizes a Notary Public to enter the information listed in 18 NCAC 07I .0302 and .0303  in an electronic journal by reviewing each individual item of information offered as an option or by pre-population and confirming that offered information is accurate by selecting the offered information or the accurate item from among other options offered.
  10. Requires a Notary to review the information entered for accuracy and correct any errors in the entry before committing an electronic journal entry.
  11. Requires a Notary Public who maintains an electronic journal to ensure that (a) the principals acknowledge that their electronic signatures have been included in the journal as signed on the documents in the transaction, (b) the designee signs the principal's name pursuant to GS 10B-20(e) as signed on the documents in the transaction and the Notary then includes the signature in the journal, or (c) the credible witness signs his or her name and the Notary then includes the signature in the journal.
Analysis

Late last year, the Department of the Secretary of State published proposed Notary Public rules. “Phase 1” of three planned phases contained changes to the Notary Carolina Administrative Code sections concerning the matters reported in this new law update. The approved rules appeared in the March 1, 2024 North Carolina Register and take effect on July 1, 2024 when the statutes related to remote electronic notarization take effect.

The scope of the approved rules is far ranging. The rules cover filings made to the Secretary of State, payment of fees, registration as an Electronic Notary, electronic signatures and seals of Electronic Notaries, and journals. With respect to the journal provisions specifically, the approved rules are careful to note that as a result of the enactment of Senate Bill 615 last fall, Notaries Public are authorized but not required to keep a journal. Electronic Notaries, however, are required to keep a journal.

Read the adopted administrative rules (see pages 1132-1148).

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