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TN Senate Bill 1758/House Bill 1794

Legislation

State: Tennessee
Signed: May 15, 2018

Effective: July 01, 2019
Chapter: 931/931

Summary

Tennessee becomes the fifth state to authorize Notaries to perform online electronic notarizations.

Affects

Amends Sections 8-16-112, 8-16-114 and 66-22-101 of and adds Sections 8-16-301-8-16-313 to the Tennessee Code Annotated.

Changes

Definitions

  1. Defines “appear" or "appearance" or "personally appear" as: (a) appearing physically before a Notary; or (b) appearing before an online Notary by means of an interactive two-way audio and video communication that meets the online notarization requirements under rules promulgated by the Secretary of State;
  2. Defines "credential analysis" as a process or service operating as outlined in rules promulgated 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.
  3. 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 information required by the Secretary of State in rule 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.
  4. Defines "electronic seal" as information within a notarized electronic document that confirms the online Notary’s name, jurisdiction, identifying number, and commission expiration date and that generally corresponds to information in Notary seals used on paper documents.
  5. Defines "identity proofing" as a process or service operating according to criteria as outlined in rules promulgated by the Secretary of State, through which a third person affirms the identity of an individual through review of personal information in public and proprietary data sources.
  6. Defines "online notarization" as a notarial act performed by means of two-way video and audio conference technology that meets the standards adopted under TCA 8-16-305.
  7. Defines "online Notary Public" as a commissioned Notary who has been additionally commissioned to perform online notarizations.
  8. Defines "principal" to mean an individual: (a) whose electronic signature is notarized in an online notarization; or (a) who appears before and provides an acknowledgment of or takes an oath or affirmation from an online Notary but not in the capacity of a witness for the online notarization.
  9. 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 Public's services, and (b) perform credential analysis.

Online Notary Commission

  1. Provides that a Notary may apply to the Secretary of State to be commissioned as an online Notary as provided in the new laws.
  2. Provides that a person qualifies to be commissioned as an online Notary by (a) satisfying the qualification requirements for appointment as a Notary, and (b) submitting to the Secretary of State an application that satisfies the Secretary of State that the applicant is qualified.
  3. Prescribes the information an applicant as an online Notary must include in the application, including a certification that the applicant will comply with the Secretary of State's standards for online notarization.
  4. Permits the Secretary of State to charge a fee for an online Notary commission application.
  5. Clarifies that an online Notary is a Notary Public, may perform notarial acts, and is subject to, and must be appointed and commissioned as a Notary Public under Title 8, Chapter 16 of the Tennessee Code.
  6. Permits an online Notary to perform an online notarization without regard to the physical location of the principal if the Notary is physically located in Tennessee.
  7. Requires the Secretary of State to terminate the commission of an online Notary if the online Notary fails to comply with Title 8, Chapter 16 of the Tennessee Code Annotated.
  8. 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 to certify compliance with the Secretary of State as provided in rule.
  9. 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 coding, disk, certificate, card, software or password that enables electronic affixation of the online Notary’s official electronic signature or seal if the former online Notary is recommissioned as an online Notary with the same electronic signature and seal within 3 months after the former commission terminated.

Standards for Online Notarial Acts

  1. Clarifies that with respect to a document presented for registration or recording in the office of a county register, a person’s original signature includes an electronic signature as defined in TCA 8-16-302.
  2. 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 of the new law and rules promulgated to implement the new law.
  3. Permits an online Notary to identify principals by (a) the online Notary's personal knowledge of the person creating the electronic signature; or (b) all of the following: (1) 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; (2) credential analysis of the credential described in (1) above; and (3) identity proofing of the person.
  4. 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.
  5. Requires the electronic notarial certificate for an online notarization to include a notation that the notarization is an online notarization.
  6. Requires an officer taking an acknowledgment with respect to a document presented for registration or recording in the office of a county register to designate in the acknowledgment form whether the principal personally appeared before the officer by means of an interactive two-way audio and video communication using the words "personally appeared before me by audio-video communication" or "personally appeared by audio-video communication" or "before me appear by audio-video communication" rather than "personally appeared before me" or "personally appeared" or "before me appear."
  7. Clarifies that the validity of an online notarization performed by a Tennessee online Notary in accordance with Title 8, Chapter 16 of the Tennessee Code Annotated is to be determined by applying the laws of this Tennessee.
  8. Permits an online Notary or the online Notary's employer to charge a fee in an amount not to exceed $25 each for performing an online notarization in addition to any other fees authorized under Title 8, Chapter 16 of the Tennessee Code Annotated.

Electronic Record of Online Notarial Acts

  1. Requires an online Notary to keep a secure electronic record of electronic documents notarized by the online Notary Public in one (1) or more electronic journals.
  2. Requires the electronic record for each online notarization to contain for each online notarization:(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 whether by the online Notary’s personal knowledge, a notation of the type of identification document provided to the online Notary, a record of the identity verification made, if applicable; or the oath or affirmation of a credible witness; and (f) the fee, if any, charged.
  3. Requires an online Notary to record in the electronic record of an online notarization a description of the type of identification documents provided to the online Notary by a credible witness if the witness is not personally known to the online Notary.
  4. Requires the electronic record to contain 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.
  5. Requires the online Notary to take reasonable steps to (a) ensure the integrity, security and authenticity of online notarizations; (b) maintain a backup for the electronic record; and (c) protect the backup record from unauthorized use.
  6. Requires the electronic record to be maintained for at least five (5) years after the date of the transaction or proceeding requiring notarization.
  7. Permits the Notary, or a guardian or personal representative of an incapacitated or deceased Notary, to by agreement use a repository acting in accordance with any rules established under Title 8, Chapter 16 of the Tennessee Code Annotated to maintain such records.

Security of Electronic Record, Signature, and Seal

  1. 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.
  2. Requires an online Notary to keep the online Notary's electronic record, electronic signature, and electronic seal secure and under the online Notary's exclusive control, including passwords or codes under control of the Notary.
  3. Prohibits an online Notary from allowing another person to use the online Notary's electronic record, electronic signature, or electronic seal.
  4. Provides that an online Notary may only use the online Notary's electronic signature for performing online notarizations.
  5. Requires an online Notary to attach the online Notary's electronic signature and electronic seal to an electronic notarial certificate in a manner that is capable of independent verification and renders any subsequent change or modification to the electronic document evident.
  6. 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, electronic signature or electronic seal.
  7. 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, electronic signature, or electronic seal.

Other Provisions

  1. Clarifies that with respect to a document presented for registration or recording in the office of a county register, a person may personally appear before the officer taking an acknowledgment by (a) appearing physically before the officer; or (b) appearing by means of an interactive two-way audio and video communication that meets the online notarization requirements under rules promulgated by the Secretary of State pursuant to the Online Notary Public Act.
  2. Classifies as a Class D felony, without authorization, knowingly obtaining, concealing, damaging, or destroying the certificate, disk, coding, card, program, software or hardware enabling an online Notary to affix an official electronic signature or electronic seal.
  3. Clarifies that the requirement of a Notary's signature in ink by the Notary's hand and a seal is satisfied if an electronic signature or a digitized image of a wet signature of the person authorized to perform that act, and all other information required to be included, is attached to or logically associated with the document or signature; and further clarifies that a physical or electronic image of a stamp, impression or seal need not accompany an electronic signature.
  4. Clarifies that the requirement that an official seal of office or stamp be imprinted in a color of ink is satisfied by an electronically transmitted document, if the document legibly reproduces the required elements of the seal, and further clarifies that a physical or electronic image of a stamp, impression, or seal need not accompany an electronic signature.

Rules

  1. Requires the Secretary of State to promulgate rules necessary to implement online notarizations.
  2. Requires the Secretary of State to promulgate by rule standards for credential analysis and identity proofing.
  3. Permits the Secretary of State to confer with other appropriate agencies on matters relating to equipment, security, and technological aspects of the online notarization standards.
Analysis

Tennessee is the second state in 2018 to enact online notarization. Senate Bill 1758/House Bill 1794 follows the pattern set by both Texas and Nevada last year in requiring signers appearing remotely before the Notary using audio-video communication technology to be identified using multi-factor identification that includes identity proofing, remote presentation and credential analysis (note: all of these terms are defined in the act). Tennesee follows Texas in requiring Notaries who want to perform online notarizations to be separately commissioned as an online Notary, and the bill provides rules for the commissioning process. As in every state allowing online notarization, Tennessee also requires online Notaries to keep an electronic journal of all online notarizations and to record the audio-video session as part of the record. It also allows an online Notary or the online Notary's employer to charge a maximum $25 fee for an online notarization. As is the case with virtually all online notarization law enactments, Tennessee chose a delayed effective date (July 1, 2019) to implement the new online notarization law, although SB 1758/HB 1794 allows the Secretary of State to start the process of promulgating rules for online notarization on May 15, 2018, the date the bill was signed.

Read Senate Bill 1758.

Read House Bill 1794.

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