The Office of the Secretary of State proposes to reorganize Chapter 87, concerning notaries public, by proposing the repeal of 1 TAC §§87.1, 87.4, 87.22, 87.23, 87.25, 87.41 - 87.50, 87.52, 87.54, and 87.60 and the concurrent proposal of new §§87.1 - 87.6, 87.10, 87.11, 87.20 - 87.25, 87.30, 87.40 - 87.44, 87.50, 87.60 - 87.62, and 87.70.

The proposed changes to Chapter 87 include the following general changes: reorganization of the rules, updates to the language based on statutory revisions, reference to the secretary of state's website, removal of redundant and unnecessary repetition of provisions contained in statute or forms, and clarification of certain procedures.

In addition to the general changes above, the following specific changes are proposed:

1. Section 87.2 of the proposed rules sets forth the eligibility requirements for a Texas notary public. In response to Texas Attorney General Opinion GA-0733, the rejection of an application or revocation of a commission for a final conviction for a crime involving moral turpitude has been changed from discretionary to mandatory.

2. Section 87.6 of the proposed rules set forth the procedure for renewing a commission and clarifies that renewals are subject to the same eligibility criteria as initial applicants.

3. Section 87.43 of the existing rules will be repealed and replaced with §87.11 of the proposed rules. Good cause is amended as follows: to include ineligibility due to a final felony conviction in an effort to be consistent in the treatment of felonies and crimes involving moral turpitude; to clarify that a final conviction for a crime involving moral turpitude makes an individual ineligible to hold office as a notary public in accordance with Tex. Atty Gen. Op. GA-0733; and to include a failure to respond to a request for public information in accordance with proposed rules §87.42 and §87.43.

4. Section 87.30 of the proposed rules sets forth the instances when a notary may refuse a request to perform notarial services. This rule is proposed in an effort to provide guidance to notaries on an issue that is not addressed in Chapter 406 of the Texas Government Code.

5. Section 87.41 of the proposed rules is being added to provide guidance to notaries that want to maintain the notary record book electronically in accordance with §406.016 of the Texas Government Code.

6. Section 87.42 of the proposed rules is being added to provide guidance on requirements of §406.014(b)(c) of the Texas Government Code to provide copies of the notary record book and proposed §87.40 (which is replacing existing §87.60) relating to personal information in the notary book. Section 87.43 sets forth the possible disciplinary repercussions for failure to comply with the public information requirements.

7. Section 87.44 of the proposed rules is being added to provide guidance with respect to records retention requirements for notaries public. The proposed retention schedule is based on the retention requirements for business records in §72.002 of the Texas Business and Commerce Code.

8. Section 87.50 of the proposed rules clarifies the process for changing the address of record with the secretary of state pursuant to §406.019 of the Texas Government Code, sets forth the possible disciplinary repercussions for failure to comply with the change of address requirement, and clarifies the process when a commissioned notary moves out of state.

9. Section 87.60 of the proposed rules is being added to provide guidance on the new electronic submission of notary applications and bond process that was implemented by the secretary of state in 2009.

10. Section 87.70 of the proposed rules is being added to provide guidance on the appointment of qualified escrow officers living in adjacent states as Texas notaries public, pursuant to H.B. 652, 81st Leg., eff. Sept. 1, 2009.

11. Sections 87.50 - 87.54 of the existing rules are being repealed and will not be replaced. The authority of a notary to issue a subpoena is not found in the Texas Government Code and therefore it was determined that Chapter 87 was not the appropriate place for rules regarding this particular authority.

Fiscal Note

Briana Godbey, staff attorney, Business and Public Filings Division, has determined that for each year of the first five years that the sections proposed to be repealed and replaced will be in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections as proposed.

Public Benefit Cost Note

Ms. Godbey has also determined that for each year of the first five years that the sections proposed to be repealed and replaced will be in effect the public benefit will be increased guidance as to the duties of a notary public and a clarification of the processes and procedures of the Office of the Secretary of State (hereinafter the "agency") in commissioning and regulating Texas notaries public.

Pursuant to House Bill (HB) 3430, 80th Leg. (2007), a state agency is required to determine whether proposed rules may have a potential adverse economic impact on small and micro businesses. The majority of the proposed rules are not anticipated to modify any existing processes or procedures and do not raise costs associated with filing fees to become a notary or to maintain a commission. The agency's proposed rule §87.2, relating to the eligibility of notaries public, is the only rule anticipated to present any change in policy or procedure on behalf of notaries or the agency.

Pursuant to Texas Attorney General Opinion GA-0733, issued July 23, 2009, the eligibility requirements in §406.004 and §406.009 of the Texas Government Code were clarified resulting in a mandatory rejection of applicants with final convictions for crimes involving moral turpitude, whereas prior to the issuance of GA-0733, the agency exercised discretion to determine whether an applicant with a final conviction for a crime involving moral turpitude should be commissioned. During the 2009 fiscal year lasting from September 1, 2008 - August 31, 2009, there were 112,224 notaries commissioned. Of those 112,224 commissioned notaries, 48 had been convicted of a misdemeanor crime involving moral turpitude. According to these statistics, the number of applicants that would be affected by the change in eligibility requirements is 0.0004%.

According to the North American Industrial Classification System (NAICS), notary services are classified as 541199 (legal services). The information on the website for the Texas Comptroller of Public Accounts indicates that there are 12,480 small businesses falling within that category. If we assume that each one of the small and micro businesses that fall within class 541199 provide notarial services, then the expected number of small or micro businesses to be effected by proposed rule §87.2 is less than 5. However, it is difficult to determine the number, if any, of these small businesses that will actually be effected by the mandatory rejection of applicants with convictions for crimes involving moral turpitude. The agency commissions individuals to serve as public servants in the office of notary public, and does not regulate business entities. Thus, the only adverse consequences foreseeable by the agency to a business would result in the possible inability of a particular employee to provide notarial services. However, there are over 400,000 notaries currently commissioned in this state and no specialized skills or training are required to be commissioned as a Texas notary public. Therefore, finding an individual or another employee to provide these services should not be overly burdensome. It should also be noted that preventing a notary that has been convicted of a crime involving moral turpitude from serving as a notary would increase the public's confidence in the office, and thus, is in the public interest. Therefore, based on the minute percentage of applicants effected by the mandatory rejection of applicants with a conviction for a crime involving moral turpitude, the relative ease of finding someone to perform notarial services or to become commissioned as a notary public, and the public interest served by preventing notaries with a disqualifying conviction from serving as a notary public, any potential adverse economic impact on small and micro businesses is expected be de minimis.

Under §2006.002(c-1), Texas Government Code, an agency is only required to consider alternative regulatory methods if these alternatives would be consistent with the health, safety, environmental and economic welfare of the state. Proposed rule §87.2 is made in accordance with legislative mandate and therefore any variance would not be consistent with the public interest and welfare and thus no alternative methods have been considered.

Comments

Comments on the sections proposed to be repealed and replaced may be submitted in writing to: Briana Godbey, P.O. Box 13697, Austin, Texas 78711-3697. Comments must be received not later than 12:00 noon, November 16, 2009.

Statutory Authority

The new sections are proposed under the authority of §406.023, Texas Government Code, which requires the secretary of state to establish rules for the enforcement and administration of Chapter 406.

Cross Reference to Statutes

The statute affected by the new sections is Chapter 406 of the Texas Government Code.