BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           2394 (Brownley)
          
          Hearing Date:  08/02/2010           Amended: 06/14/2010
          Consultant:  Jacqueline Wong-HernandezPolicy Vote: Judiciary 4-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY: AB 2394 would establish the Levying Officer  
          Electronic Transactions Act, whereby a levying officer could use  
          electronic methods to create, generate, send, receive, store,  
          display, retrieve, or process information, electronic records,  
          and documents, as specified. This bill would authorize an  
          earnings withholding order to be served by first class mail  
          rather than certified mail on an employer, as specified.
          This bill also makes clarifying changes to various provisions  
          statute as it pertains to levying officers and execution of  
          writs for the enforcement of money judgments.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions              2010-11                  2011-12       
           2012-13                       Fund
           
          Authorizes electronic transmittal    Potentially significant  
          savings, if adopted      Local                          
          Mandates: Levying officers              Negligible; unlikely to  
          be reimbursable         General
                                                                            
            Potential net savings                 Local/General

          Modifies notice delivery                      Likely substantial  
          ongoing savings              Local
          _________________________________________________________________ 
          ____
          STAFF COMMENTS: 
          
          AB 2394 would establish the Levying Officer Electronic  
          Transactions Act (LOETA) and provide rules and procedures, as  
          specified, for levying officers in the utilization of an  
          information processing system to create, generate, send,  
          receive, store, display, retrieve, or process information,  
          electronic records, and documents to the extent the levying  
          officer has the resources and technological capacity to do so. 










          
          This bill provides an "opt-in" provision requiring both the  
          court and the levying officer to have the technological  
          resources with which to administer the information processing  
          system and mutually agree to electronically process the  
          documents specified in this Act. This provision makes the  
          utilization of electronic processes optional. To the extent that  
          superior courts enter into agreements with levying officers,  
          those courts will likely achieve savings related to reduced  
          paper-base transactions and records storage. 

          This bill makes various minor (often technical and clarifying)  
          changes to various provisions statute as it pertains to levying  
          officers and execution of writs for the enforcement of money  
          judgments. Some of the changes, which are detailed below, may be  
          considered state mandates on local ministerial officers. It does  
          not appear, however, that any of them require significant new  
          duties or a higher level of service in their existing duties; in  
          fact, most will likely result in minor workload decreases. Thus,  
          these changes are unlikely to constitute reimbursable mandates  
          or reach a workload or resource threshold to merit a claim for  
          reimbursement. 
           Page 2
          AB 2394 (Brownley)

          Existing law requires the levying officer to return the original  
          writ of execution to the court along with a report detailing the  
          actions taken by the levying officer, the amounts collected  
          pursuant to the writ, and the costs incurred. This bill would  
          instead provide that the levying officer can either return the  
          original writ to the court or store the writ as specified under  
          the LOETA and file the report separately with the court.  
          Existing law also requires the levying officer to attach the  
          original garnishee's memorandum to the original writ of  
          execution for return to the court and deliver a copy to the  
          judgment creditor, unless no memorandum was received which  
          information shall be conveyed to the court. This bill would  
          instead remove the requirements to attach the original  
          garnishee's memorandum to the original writ for return to the  
          court, and would authorize the employer to electronically  
          transmit the garnishee's memorandum to the levying officer.  
          These regulation changes would likely result in increased  
          efficiency in for levying officers (or other county staff)  
          processing the reports. 

          Under current law, the levying officer, upon sale of real  










          property, must execute and deliver a deed of sale to the  
          purchaser and record a duplicate deed of sale with the county  
          recorder. This bill would additionally make the levying officer  
          responsible for collecting the documentary transfer tax with the  
          purchase amount from the purchaser and transmitting the  
          documentary transfer tax to the city and/or county. The degree  
          to which this responsibility already falls on levying officers,  
          by default, is unclear, but placing the responsibility in  
          statute creates a state mandate. That mandate is unlikely to  
          reach the threshold for reimbursement in virtually any county,  
          except Los Angeles, and even in Los Angeles is highly unlikely  
          to be a significant cost.

          Existing law requires a levying officer at least once every two  
          years to account to the court all amounts collected under an  
          earnings withholding order. This bill would authorize the  
          levying officer to electronically file the accounting with the  
          court, which would likely result in very minor workload  
          reduction for levying officers and the court. 

          This bill is likely to result in substantial local savings, by  
          changing the requirements for serving an employer with an  
          earnings withholding order. Existing law requires the service of  
          an earnings withholding order on an employer to be delivered by  
          personal delivery, as specified, or by registered or certified  
          mail with return receipt requested.  Service would be deemed  
          completed at the time the return receipt is executed by or on  
          behalf of the recipient.  An employer receiving an earnings  
          withholding order must complete under oath and return within 15  
          days the enclosed Judicial Council "employer's return" form  
          indicating information about the garnishee/employee, as  
          specified.  (Code Civ. Proc. Secs. 706.101(b), 706.125,  
          706.126.)

          This bill would authorize the levying officer to serve the  
          earnings withholding order on an employer by first class mail,  
          instead of the more expensive certified or registered mail.  
          Service would be complete at the time of the receipt of the  
          withholding order as indicated by the employer on the employer's  
          return. According to the sponsor, it typically costs $5.88 to  
          serve an earnings withholding order by certified mail, of which  
          $2.20 is charged by the Post Office for return receipt service.  
          By contrast, it typically costs just $0.73 to send the same  
          materials by first class mail.