BILL ANALYSIS AB 2394 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2394 (Brownley) As Amended June 14, 2010 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |72-0 |(May 20, 2010) |SENATE: |34-0 |(August 18, | | | | | | |2010) | ----------------------------------------------------------------- Original Committee Reference: JUD. SUMMARY : Establishes procedures for sheriffs and marshals to transmit, receive, and maintain certain electronic records and documents related to civil law enforcement, in order to reduce operating costs and promote systemic migration away from a paper-based model of doing business. Specifically, this bill, the Levying Officer Electronic Transaction Act (Act): 1)States legislative findings that modern technologies offer alternatives to paper-based systems and provide the means to create, store, retrieve, and transmit records and documents in electronic form, resulting in increased efficiency, taxpayer savings, and improved public access to levying officers. Further states legislative intent to accommodate current and future technologies based on industry standards. 2)Provides that nothing in this Act shall be construed to require a court or levying officer to comply with any of its provisions unless the court and the levying officer have: a) jointly determined that both the court and the sheriff's department have the resources and the technological capacity to do so; and, b) have mutually agreed to electronically act upon documents as provided in the Act. 3)Authorizes sheriffs and marshals (also referred to as "levying officers") to utilize an information processing system to create, generate, send, receive, store, display, retrieve, or process information, electronic records, and documents when based on industry standards and only to the extent that the levying officer has the resources and technological capacity to do so. 4)Provides that if a technical problem with the levying officer's system prevents receipt of an electronic AB 2394 Page 2 transmission, and the sender demonstrates an attempt to electronically transmit the document on that day, then the levying officer must deem the document as received on that day. 5)Permits a levying officer to create, store, print or process transmit an electronic record, including an electronic mail message (email) in the place of, and in the same manner as, the paper record or document upon which the electronic record is based. 6)Provides that whenever fax transmission of a document or record to a levying officer is authorized by this act, the levying officer may act upon an electronic record transmitted by a fax machine in the same manner as the paper record or document upon which the electronic version is based. 7)Requires a person transmitting an electronic record to the levying officer by fax or email pursuant to this Act to: a) Include with the record certain information, as specified (in either a cover sheet or within the record itself), that identifies the name and fax or email contact information of the sender; and, b) Retain the paper version of the record or document and deliver the paper version of the record or document to the levying officer within five days after a request to do so has been mailed to the sender by the levying officer. 8)Provides that, with respect to deeds and conveyances that the sheriff must execute and deliver to the purchaser of real estate sold by the sheriff under authority of law, the deeds and conveyances may be recorded electronically pursuant to this Act if they comply with the Electronic Recording Delivery Act of 2004. 9)Requires the levying officer to exclude or redact identifying information, including SSN and financial account numbers, from any electronic record or document made available to the public, as well as any writ return filed with the court. 10)Provides that in lieu of returning the paper version of an original writ of execution to a court, the levying officer may retain the original writ, or an electronic copy of the AB 2394 Page 3 original writ, and electronically file with the court only a return reporting the levying officer's actions, amounts collected, and costs incurred, by a specified deadline. 11)Requires a levying officer, at least once every two years, to file an accounting with the court for all amounts collected under an earnings withholding order (EWO), including costs and interest, and authorizes the levying officer to file the accounting with the court by electronic means. 12)Repeals the requirement that a levying officer make a supplemental return on the writ of execution upon termination of an EWO when the writ is returned to the court before such time that the EWO terminates. 13)Permits a judgment creditor or his or her attorney to electronically transmit to the levying officer the following documents: a) Written levying officer instructions (generally, providing information necessary to enforce a judgment, e.g., an adequate description of property to be levied on); and, b) Written directions to release property (the release). 14)Permits a garnishee to electronically transmit the garnishee's memorandum to the levying officer. 15)Authorizes the sheriff to serve an EWO, if not by personal delivery, then by first class mail, postage prepaid (instead of via registered or certified mail). Further provides that when service is made by mail, service is complete at the time of receipt of the EWO as indicated in the employer's return, or the date of mailing if the date of receipt is not indicated on the employer's return. 16)Provides that if the levying officer attempts service by mail and does not receive the employer's return within 15 days from the date of mailing, then the levying officer shall make personal delivery of service. 17)Requires a writ of execution and a writ of possession or sale of property to state: (1) the type of legal entity of the judgment debtor, if the judgment debtor is other than a AB 2394 Page 4 natural person; and (2) whether the case is limited or unlimited. 18)Provides that any amount of money required to be paid by the purchaser of real property to the levying officer as a documentary transfer tax must then be forwarded to the county and is not considered to be added to the judgment. 19)Allows the name of the judicial officer, as an alternative to his or her signature, to appear on the specified notice informing a person subject to subpoena that failure to appear may result in issuance of a warrant. The Senate amendments clarify that the authority of the levying officer to electronically file with the court the return and accounting of amounts collected under an EWO is subject to certain statutory limitations, as specified (i.e., summary 2) above). AS PASSED BY THE ASSEMBLY , this bill was substantially similar to the version approved by the Senate. FISCAL EFFECT : According to the Senate Appropriations analysis, in the provisions of this bill that authorize electronic transmittal of documents, superior courts "will likely achieve savings related to reduced paper-base transactions and records storage, to the extent that those courts enter into agreements with levying officers." In addition, any provisions under this bill that can be considered to be state mandates on local ministerial officers "are unlikely to constitute reimbursable mandates," while there may be potential net local and general savings from increased efficiency for levying officers or other county staff. Finally, the Senate Appropriations analysis notes that the provision of the bill that modifies service of an EWO upon an employer bill is "likely to result in substantial local savings." COMMENTS : This bill, the Levying Officer Electronic Transaction Act, represents one of the first, but certainly not one of the last, comprehensive efforts to adapt the Code of Civil Procedure to modern information technology and promote systemic migration away from a paper-based model of civil law enforcement. The author and the Los Angeles County Sheriff's Department, the sponsor of this bill, believe that there are significant potential time and cost savings associated with increased use of AB 2394 Page 5 electronic records and documents, and that this bill will increase the efficiency of the Sheriff's Office by saving countless number of trips to the courthouse or the county recorder's office to transport original paper versions of documents that may otherwise be transmitted by fax or email. This lengthy bill would update numerous sections of the Code of Civil Procedure to establish new procedures for sheriffs and marshals to send, receive, and maintain certain electronic records and documents relating to their duties in enforcing civil judgments. In support, the author writes: "This bill provides a means for the Sheriff and Marshal to reduce civil law enforcement operating costs by migrating from a paper based business model to a modern system that makes extensive use of electronic records, e.g., digitized writs, and communication, e.g., websites and email. Today's information technologies increase productivity and minimize errors by avoiding data entry redundancies. The reduced processing time for electronic documents and data exchanged between courts, sheriffs and marshals, and litigants presents an opportunity for staff to do more with fewer people." Under current law, a separate writ of execution must be issued for each county where a levy is to be made. Furthermore, while writs may be issued successively until the money judgment is satisfied, a new writ may not be issued for a county until the expiration of 180 days after the issuance of a prior writ for that county unless the prior writ is first returned. In practice, the writ is "returned" to the court only when the sheriff physically brings the original paper version of the writ, along with the accounting document (the "return"), to the court and files the documents. The main purpose of the return is to provide updated accounting information to the court clerk so that any subsequently issued writ will accurately reflect the balance of the judgment to be collected. Courts commonly treat the sheriff's return of the original paper writ as the necessary triggering event that permits the court to issue another subsequent writ. This practice, although inefficient from the sheriff's perspective, is intended to alleviate the court's constant concern that two writs of execution with different terms may be issued in the same county in the same case. Significantly, this bill would instead permit the levying officer to: a) retain the original writ of execution, or an electronic copy of the original writ, in lieu of returning the original paper version to the court; and, b) file with the court AB 2394 Page 6 only the return reporting the levying officer's actions, amounts collected, and costs incurred, by a specified deadline. If the court has "opted-in" to this Act, then the sheriff may file the return electronically with the court pursuant to the mutually agreed-upon rules for sending and receiving electronic records at that time. The blanket opt-in provision for courts was especially important here in addressing concerns expressed by Judicial Council and court personnel that removing the requirement for the return of the original paper writ poses a workability problem for many courts whose workflow is often premised on receipt of both the original writ and writ return in paper form. Under current law, an EWO must be made either by personal delivery or by registered or certified mail, postage prepaid. When service is made by registered of certified mail, service is deemed complete at the time the "return receipt is executed by or on behalf of the recipient." The return receipt refers to the "green card" that the U.S. Post Office returns by mail to customers who purchase registered or certified mail service, after someone at the recipient's address has signed the card to acknowledge receipt of the registered or certified letter. If service by mail has been made but the return receipt has not been received back by the levying officer after 15 days from the date of mailing, then the levying officer must serve the EWO by personal delivery. This bill would allow the sheriff to serve EWOs by first class mail rather than by certified mail. According to the sponsor, it typically costs $5.88 to serve an EWO 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 EWO materials by first class mail-a significant cost savings. However, because first class mail, by definition, does not involve any "green card" return receipt, the bill now substitutes, in place of the return receipt, the "employer's return" included in the papers accompanying every EWO. The employer is instructed on the employer's return form to provide specified information about the employee on the form and deliver or mail the form back to the levying officer within 15 days. The bill specifies that: 1) an employer's return is the Judicial Council-issued form (WG-005) specified by Code of Civil AB 2394 Page 7 Procedure Section 706.126; (2) service is deemed complete based on information indicated by the employer in the employer's return; and, (3) the levying officer must serve the EWO by personal delivery if the employer's return is not received within 15 days of the initial mailing. Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334 FN: 0005388