A BILL TO BE ENTITLED
AN ACT to make various changes to the notary PUBLIC Act.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 10B of the General Statutes reads as rewritten:
"Chapter 10B.
"Notaries.
"Article 1.
"Notary Public Act.
"Part 1. General Provisions.
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"§ 10B-4.  Rules.
The Secretary may adopt rules necessary to administer and enforce this Chapter in order to achieve the purposes of the act.
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"§ 10B‑102.  Scope of this Article.
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(b)	When conducting a remote electronic notarization, the electronic notary shall comply with the requirements of Article 1 of this Chapter.
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"Part 2. Registration.
"§ 10B‑105.  Qualifications.
(a)	A person qualified for electronic notary registration shall meet all of the following requirements:
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(b)	The Secretary may deny a registration as an electronic notary as authorized in G.S. 10B‑5(d).
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"§ 10B‑107.  Course of instruction.
(a)	Before performing electronic or remote electronic notarial acts, a notary shall take a course of instruction of least four hours approved by the Secretary and pass an examination of this course, which shall be in addition to the educational requirements provided in Article 1 of this Chapter.
(b)	The content of the course and the basis for the examination shall be notarial laws, procedures, technology, and ethics as they pertain to electronic and remote electronic notarization.
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"§ 10B‑117.  Notarial components of electronic document.
In performing an electronic or remote electronic notarial act, all of the following components shall be attached to, or logically associated with, the electronic document by the electronic notary, all of which shall be immediately perceptible and reproducible in the electronic record to which the notary's electronic signature is attached:
(1)	The notary's name, state, and county of commissioning exactly as stated on the commission issued by the Secretary.
(2)	The words "Electronic Notary Public" or "Electronic Notary Public Utilizing Communication Technology."
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"§ 10B‑134.1.  Definitions.
In addition to the definitions provided in this Article, the following definitions shall apply in this Part:
(1)	Communication technology. – An electronic device, process, or system that allows an electronic notary and a remotely located principal to communicate with each other simultaneously by sight and sound using audiovisual technology and that makes reasonable accommodations for remotely located principals with vision, hearing, or speech impairments.
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(3a)	Custodial services. – Services approved by the Secretary and selected by the notary to provide long‑term storage of the electronic journal and communications technology recordings.
(3b)	Custodian. – The person providing the custodial services. The custodian may but need not be the same as the depository.
(3c)	Depository. – The person or platform providing the depository services.
(3d)	Depository services. – Storage services provided by the platform of the electronic journal entries and communications technology recordings as they are entered.
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(6)	Platform. – The online platform utilizing the communication technology, credential analysis, and identity proofing and including communication technology recordings, geolocation, electronic journals, and depository services in order to perform the remote electronic notarial act.
(7)	Remote electronic notarial certificate. – The portion of a notarized electronic document that is completed by the electronic notary and contains all of the following:
a.	The electronic notary's electronic signature and the electronic notary's electronic seal.
b.	The facts attested to by the electronic notary in a particular notarization.
c.	A statement in the acknowledgement, jurat, or verification certificate identifying where the remotely located principal was physically located at the time of the remote electronic notarization.
d.	A statement that the notarization is a remote electronic notarization performed using communication technology by an electronic notary.
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(10)	Remotely located principal. – A principal who is not in the physical presence of the electronic notary and who is located at the time of the remote electronic notarial act in any of the following places:
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(12)	Third‑party vendor. – Any person providing credential analysis, identity proofing, or custodial services to electronic notaries.
"§ 10B‑134.3.  Types of remote electronic notarial acts; prohibitions.
(a)	Upon registration with the Secretary under this Article, an electronic notary may perform any of the notarial acts listed in G.S. 10B‑115 by means of communication technology in accordance with this Part. An electronic notary may perform any authorized remote notarial act with respect to electronic documents.
(b)	An electronic notary shall not perform a remote electronic notarial act if any of the following applies:
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(c)	Notwithstanding subsection (a) of this section, an electronic notary shall not perform any remote electronic notarial act with regard to any of the following documents:
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"§ 10B‑134.5.  Use of communication technology.
(a)	The communication technology used by an electronic notary to perform remote electronic notarial acts for remotely located principals shall comply with all of the following requirements:
(1)	Host the meeting between the electronic notary and the remotely located principal in real time.
(2)	Allow direct interaction between the remotely located principal seeking the electronic notary's services and the electronic notary so that each can communicate simultaneously by sight and sound through communication technology.
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(4)	Have sufficient video quality to allow a clear and unobstructed visual observation of the face of each participant and any identification provided by the remotely located principal for a sufficient time to allow the electronic notary to verify the remotely located principal's identity under G.S. 10B‑134.11. The electronic notary shall determine if the time is sufficient.
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(b)	The electronic notary shall take reasonable steps to provide that the communication technology used in a remote electronic notarization is secure from unauthorized interception. An electronic notary shall select one or more tamper‑evident technologies to perform remote electronic notarial acts with respect to electronic documents. In addition to any requirements of this Article or established by the Secretary, the communication technology shall provide automated backup of the communication technology recording.
(c)	No person may require an electronic notary to perform any remote electronic notarial act using communication technology that the electronic notary has not selected.
"§ 10B‑134.7.  Authority to perform remote electronic notarial acts.
(a)	An electronic notary may perform a remote electronic notarial act authorized under this Part only while the electronic notary is physically located in this State.
(b)	A remote electronic notarization performed by an electronic notary of this State under this Part is governed by the laws of this State.
"§ 10B‑134.9.  Requirements and procedures for remote electronic notarial acts.
(a)	All of the following shall occur prior to the performance of a remote electronic notarial act:
(1)	The electronic notary shall inform the participants that North Carolina law requires that a communication technology recording be made of the remote electronic notarization.
(2)	The electronic notary shall require the remotely located principal to demonstrate, to the satisfaction of the electronic notary, that the remotely located principal is not under duress and is not otherwise being coerced to complete the transaction.
(3)	The electronic notary shall verify the identity of the remotely located principal as provided in G.S. 10B‑134.11.
(4)	The electronic notary shall ask the remotely located principal if the remotely located principal would like an attorney to participate in the remote notarization, and allow for such if so requested.
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(b)	In addition to the prohibitions contained in G.S. 10B‑134.3 and G.S. 10B‑20, an electronic notary shall refuse to perform a remote electronic notarial act if any of the following applies:
(1)	The electronic notary has reasonable grounds to believe the remotely located principal is acting under duress or is being coerced into completing the transaction.
(2)	The electronic notary becomes aware that the communication technology is not secure.
(3)	The electronic signature of the remotely located principal cannot be attached to the electronic document for signature.
(4)	Unless an oath is being administered, the electronic notary's electronic notarial certificate and seal cannot be attached to the electronic document using an electronic technology that renders any subsequent change or modification to the document evident.
(c)	Except as provided in subsection (d) of this section, if the remote electronic notarial act is an oath or affirmation, the electronic notary shall administer the oath or affirmation to the remotely located principal utilizing a licensed platform.
(d)	In judicial actions or proceedings, any notary public registered with the Secretary, whether or not registered as an electronic notary, may administer an oath or affirmation to a witness that does not require remote electronic notarization of a record or a notarial certificate and seal when done in person, provided all of the following apply:
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(e)	Any non‑material failure of the electronic notary to comply with the requirements of the remote electronic notarization does not invalidate the notarial act or the electronic record that was remotely notarized. An aggrieved person is not prevented from using failures in the remote electronic notarization process, along with other grounds, to challenge the validity or enforceability of the remote electronic notarization based on fraud, forgery, impersonation, duress, incapacity, undue influence, minority, illegality, unconscionability, or another basis not related to the remote electronic notarial act or constructive notice provided by recording of the electronic record.
(f)	Information gained from a remotely located principal in the course of performing a remote electronic notarization shall be treated as confidential by the electronic notary.
"§ 10B‑134.11.  Verification of identity; identity proofing; credential analysis.
(a)	Prior to the remote electronic notarial act, the electronic notary shall verify each remotely located principal's identity through one of the following methods:
(1)	The remotely located principal creating the electronic signature is personally known to the electronic notary.
(2)	All of the following:
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c.	Comparison, by the electronic notary, of the current document issued by a federal, state, or federal or state‑recognized tribal government agency bearing the photographic image of the individual's face and either the signature or a physical description of the individual presented by the remotely located principal during credential analysis and the image of the remotely located principal via the communication technology.
(b)	Notwithstanding subsection (a) of this section, an electronic notary may require the remotely located principal to provide additional information or identification credentials necessary to confirm the identity of the remotely located principal.
"§ 10B‑134.13.  Electronic notarization and remote electronic notarization.
When conducting a remote electronic notarization, the electronic notary shall comply with the requirements of this Chapter. Each remote electronic notarization shall include a communication technology recording. There shall be no requirement that the communication technology recording further include any transactions other than the remote electronic notarial act unless the Secretary specifies a requirement to also record interactions of those particular transactions.
"§ 10B‑134.15.  Electronic journal of remote electronic notarial acts.
(a)	An electronic notary who performs a remote electronic notarization shall enter information about the remote electronic notarization in an electronic journal. The electronic journal shall be the exclusive property of the electronic notary. The electronic notary shall not allow another person to make entries in the electronic journal.
(b)	The Secretary shall adopt rules specifying the content and secure storage of the electronic journal. The rules adopted by the Secretary shall comply with all of the following:
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(5)	Specify to whom the electronic journal shall be delivered upon resignation, revocation, or expiration of a notary commission or death or adjudication of incompetency of an electronic notary.
(c)	An electronic notary may surrender the electronic journal to the electronic notary's employer upon termination of employment, but the electronic notary shall also keep and maintain an accurate backup copy of the journal for 10 years after the last remote electronic notarization entered into the electronic journal.
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"§ 10B‑134.17.  Security measures by notary; surrender of journal; etc.
(a)	An electronic notary shall comply with all of the following security requirements:
(1)	All records of journal entries and communication technology recordings shall be securely stored in a repository under the control of the electronic notary or with a steward duly appointed under the terms of this Part. If a steward is appointed, the steward shall be a third‑party vendor approved by the Secretary.
(2)	Take reasonable steps to ensure that the communication technology recordings are secure from unauthorized interception during transmission between participants involved in an electronic notarial act. The communication technology used by the electronic notary shall employ data protection safeguards consistent with generally accepted information security standards.
(b)	Within 10 calendar days of discovering any permanent loss of data, unauthorized use, loss of use, or compromise of security of the electronic journal or the communication technology recordings of remote electronic notarial acts, the electronic notary shall do both of the following:
(1)	Inform the appropriate law enforcement agency in the case of theft, tampering, or vandalism.
(2)	Notify the register of deeds in the county of the electronic notary's commissioning under G.S. 10B‑10 and the Secretary in writing and signed in the official name in which the electronic notary was commissioned. The notice shall indicate whether there was any permanent loss of data, unauthorized use, loss of use, or compromise of security of the electronic journal or the communication technology recordings of remote electronic notarial acts.
(c)	The failure of an electronic notary to produce within 30 calendar days of the Secretary's request any record required by a rule adopted under this Part shall result in the suspension of the electronic notary's power to act as a notary under the provisions of this Chapter until the Secretary reinstates the notary's commission.
"§ 10B‑134.19.  Platform licensure by Secretary.
(a)	An electronic notary shall use only a communication technology through a platform licensed by the Secretary.
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"§ 10B‑134.21.  Rules.
(a)	The Secretary shall adopt rules necessary to establish standards, procedures, practices, forms, and records relating to remote electronic notarial acts to implement this Part, including at least all of the following:
(1)	Any additional educational requirements for electronic notaries regarding remote electronic notarizations.
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(4)	The requirements of secure storage of all communication technology recordings, the electronic journal, and any other documentation under the control of the electronic notary regarding the electronic notarial act.
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"§ 10B‑134.23.  Standards for services provided to electronic notaries; enforcement.
(a)	All licensees and third‑party vendors shall meet all standards established by the Secretary under this Part for the provision of services to electronic notaries in this State for remote electronic notarization services. If the Secretary has not adopted rules establishing standards for a service, a licensee or third‑party vendor may not furnish that service to an electronic notary public until the Secretary has determined that the provided service meets security standards generally accepted within the industry for that service.
(b)	The Secretary may adopt rules establishing, supplementing, or amending third‑party vendor guidelines for standards and processes for identity proofing and credential analysis services so that third‑party vendors interacting with electronic notaries satisfy the security qualifications of establishing the identity of the remotely located principal.
(c)	The Secretary, in the Secretary's discretion, may do any one or more of the following if a licensee or third‑party vendor violates this Part or the rules adopted by the Secretary under this Part:
(1)	Require a licensee or third‑party vendor to provide an electronic notary with proof that a remote electronic notarization issue was caused in whole or in part by the licensee or third‑party vendor's technology.
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(3)	Restrict use of a licensee or third‑party vendor's technology by electronic notaries until it has come into compliance.
(4)	Assess a civil penalty of not more than one thousand dollars ($1,000) per violation against any licensee or third‑party vendor that violates a provision of this Part. In determining the amount of a penalty, the Secretary shall give due consideration to aggravating and mitigating factors presented to the Secretary by the licensee or third‑party vendor and electronic notaries.
(5)	Any other appropriate remedy.
(d)	A licensee or third‑party vendor whose technology is restricted, suspended, or revoked shall work with electronic notaries using the services of that licensee or third‑party vendor to ensure access and, if necessary, ease transition to a different licensee or third‑party vendor and may not deny its electronic notary customers access.
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(f)	An electronic notary who exercised reasonable care in selecting and using a licensee or third‑party vendor in connection with a remote electronic notarial act shall not be liable for any damages resulting from the licensee's or third‑party vendor's failure to comply with the requirements of this Part. Any provision in a contract between the electronic notary and a licensee or third‑party vendor that attempts to waive the immunity conferred by this subsection shall be null, void, and of no effect.
"§ 10B‑134.25.  Real estate transactions.
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(b)	An electronic notary who is not a licensed North Carolina attorney is prohibited from rendering services or advice that constitutes the practice of law in this State."
SECTION 2.  This act becomes effective July 1, 2023, and applies to notarial acts performed on or after that date.