2018 House Bill 1170 - House

State of South Dakota  
NINETY-THIRD SESSION
LEGISLATIVE ASSEMBLY, 2018  

673Z0171   HOUSE ENGROSSED    NO.  HB 1170 -  2/23/2018  

Introduced by:    Representative Johns and Senator Kennedy
 

        FOR AN ACT ENTITLED, An Act to revise law on notarial acts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
    Section 1. That chapter 18-1 be amended by adding a NEW SECTION to read:
    Terms in this Act mean:
            (1)    "Acknowledgment," a declaration by an individual before a notarial officer that the individual has signed a record for the purpose stated in the record and, if the record is signed in a representative capacity, that the individual signed the record with proper authority and signed it as the act of the individual or entity identified in the record;
            (2)    "Communication technology," an electronic device or process that allows a notary public in this state and a remotely located individual to communicate with each other simultaneously by sight and sound or that, as necessary, makes reasonable accommodations for an individual with vision, hearing, or speech impairments;
            (3)    "Electronic," technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities;
            (4)    "Electronic signature," an electronic symbol, sound, or process attached to or logically associated with a record and executed or adopted by an individual with the intent to sign the record;
            (5)    "Foreign state," a government other than the United States, a state, or federally recognized Indian tribe;
            (6)    "Identity proofing," a process or service by which a third person provides a notary public with a reasonable means to verify the identity of an individual by a review of personal information from public or proprietary data sources;
            (7)    "In a representative capacity," acting as:
            (a)    An authorized officer, agent, partner, trustee, or other representative for a person other than an individual;
            (b)    A public officer, personal representative, guardian, or other representative, in the capacity stated in a record;
            (c)    An attorney-in-fact for an individual; or
            (d)    An authorized representative of another in any other capacity;
            (8)    "Notarial act," an act, whether performed with respect to a tangible or electronic record, that a notarial officer may perform under the laws of South Dakota. The term includes taking an acknowledgment, administering an oath or affirmation, taking a verification on oath or affirmation, witnessing or attesting a signature, certifying or attesting a copy, and noting a protest of a negotiable instrument;
            (9)    "Notarial officer," a notary public or other individual authorized to perform a notarial act;
            (10)    "Notary public," an individual commissioned to perform a notarial act by the secretary of state;
            (11)    "Official stamp," a physical image affixed to or embossed on a tangible record or an electronic image attached to or logically associated with an electronic record;
            (12)    "Outside the United States," outside the geographic boundaries of the United States, Puerto Rico, the U.S. Virgin Islands, and any territory, insular possession, or other location subject to the jurisdiction of the United States;
            (13)    "Person," any individual, corporation, business trust, statutory trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity;
            (14)    "Record," any information inscribed on a tangible medium or stored in an electronic or other medium and is retrievable in perceivable form;
            (15)    "Remotely located individual," a person who is not in the physical presence of the notary;
            (16)    "Sign," with present intent to authenticate or adopt a record to execute or adopt a tangible symbol or to attach to or logically associate with the record an electronic symbol, sound, or process;
            (17)    "Signature," a tangible symbol or an electronic signature that evidences the signing of a record;
            (18)    "Stamping device," a physical device capable of affixing to or embossing on a tangible record an official stamp or an electronic device or process capable of attaching to or logically associating with an electronic record an official stamp;
            (19)    "State," any state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States; and
            (20)    "Verification on oath or affirmation," a declaration, made by an individual on oath or affirmation before a notarial officer, that a statement in a record is true.
    Section 2. That chapter 18-1 be amended by adding a NEW SECTION to read:
    This Act applies to any notarial act performed after June 30, 2018.
    Section 3. That chapter 18-1 be amended by adding a NEW SECTION to read:
    A notarial officer may perform a notarial act authorized by this Act or by law of this state. A notarial officer may not perform a notarial act with respect to a record to which the officer or the officer's spouse is a party, or in which either of them has a direct beneficial interest. A notarial act performed in violation of this section is voidable.
    Section 4. That chapter 18-1 be amended by adding a NEW SECTION to read:
    If an individual is physically unable to sign a record, the individual may direct another person other than the notarial officer to sign the individual's name on the record. The notarial officer shall insert "Signature affixed by (name of other person) at the direction of (name of individual)" or words of similar import.
    Section 5. That chapter 18-1 be amended by adding a NEW SECTION to read:
    A notary public in this state may perform by means of communication technology a notarial act relating to a statement made in or signature executed on a record by a remotely located individual if:
            (1)    The notary public has personal knowledge of the identity of the individual or satisfactory evidence of the identity of the individual as provided in section 7 of this Act;
            (2)    The notarial act relates to an electronic record or signature, or the acknowledgment of a signature on a tangible record;
            (3)    The notary public is reasonably able to identify the record before the notary public

as the same record in which the remotely located individual made the statement or on which the remotely located individual executed the signature;

            (4)    The notary public, or a person acting on behalf of the notary public, creates an audio-visual copy of the performance of the notarial act; and
            (5)    If a remotely located individual is located outside the United States:
            (a)    The record is to be filed with or relates to a matter before a court, governmental entity, public official, or other entity under the jurisdiction of the United States, involves property located in the territorial jurisdiction of the United States, or involves a transaction substantially connected with the United States;
            (b)    The act of making a statement or signing the record is not prohibited by the foreign state that the remotely located individual is located.
    In addition to the methods permitted by law, a notary public has satisfactory evidence of the identity of a remotely located individual if the notary public reasonably can identify the individual by at least two forms of identity proofing.
    Section 6. That chapter 18-1 be amended by adding a NEW SECTION to read:
    If a notarial act involves a statement made in or a signature executed on a record by an individual located in a foreign state by means of communication technology, the notarization must also indicate that the individual making the statement or signing the record declared to the notary public that the individual was physically located in a foreign state at the time the notarial act was performed.
    Section 7. That chapter 18-1 be amended by adding a NEW SECTION to read:
    The notary public shall retain an electronic audio-visual copy of the performance of each notarial act involving the use of communication technology for ten years from the date of

performance. Upon suspension or revocation of a notary public's commission or upon death or incapacity, the notary public or guardian, conservator, or personal representative of an incapacitated or deceased notary public shall retain a copy of the notarial act for ten years. In lieu of retaining copies as required by this section, the copies may be held by a repository designated by or on behalf of the notary public.
    Section 8. That chapter 18-1 be amended by adding a NEW SECTION to read:

    If a notarial act involves a statement made or a signature executed on a record by a remotely located individual, the notarization must also indicate the individual was remotely located. The indication required by this section is sufficient if it substantially states, "This notarial act involved a statement made or a signature executed by a remotely located individual using communication technology.".
    Section 9. That chapter 18-1 be amended by adding a NEW SECTION to read:
    The official stamp of a notary public shall meet the requirements of § 18-1-3.1 and be capable of being copied together with the record to which it is affixed or attached or with which it is logically associated.
    Section 10. That chapter 18-1 be amended by adding a NEW SECTION to read:
    A notary public is responsible for the security of the notary public's stamping device and may not allow another individual to use the device to perform a notarial act. On resignation from, or the revocation or expiration of, the notary public's commission, or on the expiration of the date set forth in the stamping device, if any, the notary public shall disable the stamping device by destroying, defacing, damaging, erasing, or securing it against use in a manner that renders it unusable. On the death or adjudication of incompetency of a notary public, the notary public's personal representative or guardian or any other person knowingly in possession of the stamping device shall render it unusable by destroying, defacing, damaging, erasing, or securing

it against use in a manner that renders it unusable.
    Section 11. That chapter 18-1 be amended by adding a NEW SECTION to read:

    A notary public may select one or more tamper-evident technologies to perform notarial acts with respect to electronic records. A person may not require a notary public to perform a notarial act with respect to an electronic record with a technology that the notary public has not selected.
    Section 12. That chapter 18-1 be amended by adding a NEW SECTION to read:
    This Act does not affect the validity or effect of a notarial act performed before July 1, 2018.
    Section 13. That § 18-1-7 be amended to read:
    18-1-7. A notary public who is personally interested directly or indirectly, or as a stockholder, officer, agent, attorney, or employee of any person or party to any transaction concerning which he the notary public is exercising any function of his office as such a notary public, may make any certificates, take any acknowledgments, administer any oaths, or do any other official acts as such a notary public with the same legal force and effect as if he the notary public had no such interest except that he cannot do any of such things in connection with any if the instrument which or record shows upon its face that he the notary public or the notary public's spouse is a principal party thereto.
    Section 14. That § 18-1-12.2 be amended to read:
    18-1-12.2. It is a Class 1 misdemeanor Class 2 misdemeanor for a person to affix a signature to a document as a notary public when the person notary public or the notary public's spouse has also signed the document as a party to the transaction proceeding.
    Section 15. That § 18-1-11 be amended to read:
    18-1-11. It is a Class 2 misdemeanor for any notary public to affix his the notary public's official signature to documents when the parties have not appeared before him the notary public.