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AZ Administrative Rules (2020)

Rule/Regulation

State: Arizona
Signed: March 28, 2020

Effective: April 11, 2020

Summary

The Arizona Secretary of State has adopted final rules on remote online notarization.

Affects

Creates Sections R2-12-1301 through R2-12-1308 of the Arizona Administrative Rules.

Changes

Definitions

  1. Defines “commission”, “communication technology”, “credential analysis”, dynamic knowledge-based authentication assessment”, “electronic”, “electronic notarization”, “electronic record”, “electronic seal”, “identification credential”, “identity proofing”, “multi-factor authentication”, “notarial act”, “person”, “personal knowledge”, “remotely located individual”, “remote online notarization” and “remote presentation”.

Registration

  1. Requires a Notary who performs a remote online notarization to comply with all requirements for electronic notarization.
  2. Provides the information, as specified, that is required for Notaries to register to perform remote online notarizations.
  3. Provides that if during the term of a Notary’s commission, the Notary intends to use the technologies of another vendor or person than those identified when registering with the Secretary of State, then an additional application or amendment identifying such other vendors or other persons must be submitted to the Secretary.
  4. Authorizes the Secretary of State to reject the application, or terminate or revoke a prior authorization, for the following reasons: (a) The applicant’s failure to comply with A.R.S. §§ 41-311 through 41-380 or the administrative rules; (b) Any information required to register is missing, inaccurate, or incomplete; or (c) The technology identified in the application does not conform to the standards adopted under the administrative rules.
  5. Requires the Secretary of State to notify the Notary of approval or rejection of the application for registration within 45 days after receipt, and if the application is rejected, the Secretary must state the reasons for the rejection.
  6. Provides that rejection of an application or termination or revocation of a prior authorization to perform electronic notarizations may be appealed pursuant to A.R.S. §§ 41-1092.03 and 41-1092.06.
  7. Clarifies that the term of the commission to perform remote online notarization is the same as the term of the Notary’s existing Notary commission.
  8. Clarifies that renewal of a Notary commission does not constitute a renewal of authorization to perform remote online notarizations.
  9. Requires a Notary to submit another application for registration and must receive authorization from the Secretary of State in order to continue to perform remote online notarizations under the Notary’s new Notary Public commission.
  10. Clarifies that the rules do not prohibit a Notary from receiving, installing, or using hardware and/or software updates to the technologies that the Notary identified if the hardware and/or software update does not result in technologies that are materially different from the technologies that the Notary identified previously.

Identification of Remote Signers

  1. Provides that a Notary has satisfactory evidence of the identity of a remotely located individual if the Notary reasonably can verify the individual’s identity through (a) Personal knowledge; (b) The oath or affirmation of a credible who has personal knowledge of the remotely located individual and whom the Notary can identify through personal knowledge of the credible or by multi-factor authentication in accordance with (c); (c) A multi-factor authentication procedure that analyzes the individual’s identification credential that is the subject of remote presentation against trusted third-person data sources, bind the individual’s identity to the individual following successful dynamic knowledge-based authentication assessment, and permit the Notary to visually compare the identification credential and the individual. 
  2. Clarifies that a credible witness used as satisfactory evidence may be outside the physical presence of the Notary or remotely located individual if the Notary, credible witness, and remotely located individual can communicate by using communication technology.
  3. Requires credential analysis and identity proofing to be performed by a reputable third party who has provided evidence to the Notary of the ability to satisfy the requirements of the administrative rules.
  4. Requires credential analysis to use public or private data sources to confirm the validity of the identification credential that is the subject of a remote presentation by a remotely located individual and shall, at a minimum: (a) Use automated software processes to aid the Notary in verifying the identity of each remotely located individual; (b) Require the identification credential to pass an authenticity test, consistent with sound commercial practices, that uses appropriate technologies to confirm the integrity of visual, physical, or cryptographic security features and to confirm that the identification credential is not fraudulent or inappropriately modified; (c) Use information held or published by the issuing source or an authoritative source, as available and consistent with sound commercial practices, to confirm the validity of personal details and identification credential details; and (d) Enable the Notary to visually compare for consistency the information and photograph on the identification credential and the remotely located individual as viewed by the Notary in real-time through communication technology.
  5. Requires identity proofing to be performed by means of a dynamic knowledge-based authentication assessment meeting the following requirements: (a) The remotely located individual must answer a quiz consisting of a minimum of five questions related to the individual’s personal history or identity formulated from public or private data sources; (b) Each question must have a minimum of five possible answer choices; (c) At least 80% of the questions must be answered correctly; (d) All questions must be answered within two minutes; (e) If the remotely located individual fails the first attempt, the individual may retake the quiz one time within 24 hours; (f) During a retake of the quiz, a minimum of 40% of the prior questions must be replaced; (g) If the remotely located individual fails the second attempt, the individual is not allowed to retry with the same online Notary within 24 hours of the second failed attempt; and (h) The Notary must not be able to see or record the questions or answers.
  6. Provides that if a remotely located individual must exit the workflow prior to completion of the identity verification process, the individual must restart the identity verification process from the beginning.

Communication Technology Standards

  1. Requires communication technology to provide for synchronous audio-video feeds of sufficient video resolution and audio clarity to enable the Notary and remotely located individual to see and speak with each other.
  2. Requires communication technology to provide a means for the Notary reasonably to confirm that an electronic record before the Notary is the same record in which the remotely located individual made a statement or on which the remotely located individual executed a signature.
  3. Requires communication technology to provide reasonable security measures to prevent unauthorized access to: (a) The live transmission of the audio-visual feeds; (b) The methods used to perform identity verification; and (c) The electronic record that is the subject of the remote online notarization.

Notarial Certificate for Remote Online Notarial Acts

  1. Clarifies that a form of notarial certificate for a remote online notarization satisfies the requirement of A.R.S. § 41-376(F) if it is in the form provided by applicable law and contains a statement substantially as follows: “This remote online notarization involved the use of communication technology.”
  2. Provides short-form notarial certificates of a remote online notarization for: (a) An acknowledgment in an individual capacity; (b) An acknowledgment in a representative capacity; (c) An acknowledgment for a corporation; (d) An acknowledgment for a partnership; (e) An acknowledgment by attorney in fact; (f) An acknowledgment by public officer, trustee, or personal representative; and (g) A verification on oath or affirmation.

Records of Remote Online Notarial Acts

  1. Requires a Notary to retain the electronic journal required and any audio-visual recording created under A.R.S. § 41-374 in a computer or other electronic storage device that protects the journal and recording against unauthorized access by password or cryptographic process.
  2. Requires recordings of remote online notarizations to be created in an industry-standard, audio-visual file format and must not include images of any electronic record that were the subject of the remote online notarization.
  3. Provides that an electronic journal and must be retained for at least 5 years after the last remote online notarial act chronicled in the journal.
  4. Requires an audio-visual recording must be retained for at least 5 years after the recording is made.
  5. Requires a Notary to take reasonable steps to ensure that a backup of the electronic journal and audio-visual recording exists and is secure from unauthorized use.
  6. Provides that on the death or adjudication of incompetency of a current or former Notary, the Notary’s personal representative or guardian or any other person knowingly in possession of an electronic journal or audio-visual recording must: (a) Comply with the retention requirements of the administrative rules; (b) Transmit the journal and recording to one or more depositories or to the Secretary of State at: Secretary of State, Attn: Notary Department, 1700 W. Washington Street, Floor 7, Phoenix, AZ 85007-2808 in an industry-standard readable data storage device.
  7. Authorize a Notary, guardian, conservator, or agent of a Notary, or a personal representative of a deceased Notary to, by written contract, engage a third person to act as a depository to provide the storage of electronic journals and recording.
  8. Clarifies that a third person under contract as a depository shall be deemed a depository under A.R.S. § 41-375.
  9. Requires a contract with a third-person depository to: (a) Enable the Notary, guardian, conservator, or agent of the Notary, or the personal representative of the deceased Notary to comply with the retention requirements of this section even if the contract is terminated; or (b) Provide that the information will be transferred to the Notary, guardian, conservator, or agent of the Notary, or the personal representative of the deceased Notary if the contract is terminated.
Analysis

The Arizona Secretary of State has adopted final rules to implement Senate Bill 1030, authorizing Arizona Notaries who register with the Secretary to perform remote online notarizations. The rules were scheduled to become effective on July 1, 2020, when Senate Bill 1030 was scheduled to become effective, but Governor Ducey’s recent Executive Order 2020-26 moved the effective date up to April 10, 2020. Arizona Notaries who want to perform remote online notarizations must register with the Secretary following the procedures outlined in the rules. They must follow all applicable laws of electronic notarization when performing remote online notarization. Consistent with the majority of remote online notarization enactments across the country, the Arizona rules require the use of a remote online notarization platform that offers multi-factor identify verification of remote document signers who the Notary does not know personally or who cannot be identified by the oath or affirmation of a credible witness. A Notary must keep an electronic journal and create an audio-visual recording of every remote online notarization.

Read the adopted administrative rules.

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