BILL NUMBER: AB 1856	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 10, 2014
	AMENDED IN ASSEMBLY  APRIL 21, 2014
	AMENDED IN ASSEMBLY  MARCH 20, 2014

INTRODUCED BY   Assembly Member Wilk

                        FEBRUARY 19, 2014

   An act to amend Sections 995.710, 995.720, 995.740, and 995.760 of
the Code of Civil Procedure, relating to civil actions.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1856, as amended, Wilk. Deposit in lieu of bond.
   Existing law allows, among other things, bearer bonds and bearer
notes of the United States or this state and certificates of deposit
payable, not exceeding the federally insured amount, issued by banks
or savings associations authorized to do business in this state and
insured by the Federal Deposit Insurance Corporation to be deposited
with the officer, as defined, in lieu of a bond required by an action
or proceeding, except as provided.
   This bill would allow all bonds and notes of the United States or
the State of California and cashier's checks, payable to the officer,
to be deposited with the officer in lieu of a bond, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 995.710 of the Code of Civil Procedure is
amended to read:
   995.710.  (a) Except as provided in subdivision (e) or to the
extent the statute providing for a bond precludes a deposit in lieu
of bond or limits the form of deposit, the principal may, 
without prior court approval,  instead of giving a bond, deposit
with the officer any of the following:
   (1) Lawful money of the United States  or a cashier's check,
made payable to the officer, issued by a bank, savings association,
or credit union authorized to do business in this state  . The
money shall be  maintained   held in trust 
by the officer in  an  interest-bearing 
trust account   deposit or share accounts  .
   (2) Bonds or notes, including bearer bonds and bearer notes, of
the United States or the State of California. The deposit of a bond
or note pursuant to this section shall be accomplished by filing with
the court, and serving upon all parties and the appropriate officer
of the bank holding the bond or note, instructions executed by the
person or entity holding title to the bond or note that the treasurer
of the county where the judgment was entered is the custodian of
that account for the purpose of staying enforcement of the judgment,
and that the title holder assigns to the  Treasurer 
 treasurer  the right to collect, sell, or otherwise apply
the bond or note to enforce the judgment debtor's liability pursuant
to Section 995.760.
   (3) Certificates of deposit payable to the officer, not exceeding
the federally insured amount,  or a cashier's check made
payable to the officer,  issued by banks or savings
associations authorized to do business in this state and insured by
the Federal Deposit Insurance Corporation.  Any money
deposited using a cashier's check shall be maintained by the officer
in an interest-bearing trust account. 
   (4) Savings accounts assigned to the officer, not exceeding the
federally insured amount, together with evidence of the deposit in
the savings accounts with banks authorized to do business in this
state and insured by the Federal Deposit Insurance Corporation.
   (5) Investment certificates or share accounts assigned to the
officer, not exceeding the federally insured amount, issued by
savings associations authorized to do business in this state and
insured by the Federal Deposit Insurance Corporation.
   (6)  Certificates for funds or share accounts assigned
  Share certificates payable  to the officer, not
exceeding the guaranteed  or insured  amount, issued by a
credit union, as defined in Section 14002 of the Financial Code,
whose share  deposits   accounts  are
 guaranteed   insured  by the National
Credit Union Administration or guaranteed  or insured  by
any other agency  approved by the Department of Financial
Institutions   that the Commissioner of Business
Oversight has not deemed to be unsatisfactory  .
   (b) The deposit shall be in an amount or have a face value, or, in
the case of bonds or notes, have a market value, equal to or in
excess of the amount that would be required to be secured by the bond
if the bond were given by an admitted surety insurer.
Notwithstanding any other provision of this chapter, in the case of a
deposit of bonds or notes other than in an action or proceeding, the
officer may, in the officer's discretion, require that the amount of
the deposit be determined not by the market value of the bonds or
notes but by a formula based on the principal amount of the bonds or
notes.
   (c) The deposit shall be accompanied by an agreement executed by
the principal authorizing the officer to collect, sell, or otherwise
apply the deposit to enforce the liability of the principal on the
deposit. The agreement shall include the address at which the
principal may be served with notices, papers, and other documents
under this chapter.
   (d) The officer may prescribe terms and conditions to implement
this section.
   (e) This section does not apply to deposits with the Secretary of
State.
  SEC. 2.  Section 995.720 of the Code of Civil Procedure is amended
to read:
   995.720.  (a) The market value of bonds or notes, including bearer
bonds and bearer notes, shall be agreed upon by stipulation of the
principal and beneficiary or, if the bonds or notes are given in an
action or proceeding and the principal and beneficiary are unable to
agree, the market value shall be determined by court order in the
manner prescribed in this section. A certified copy of the
stipulation or court order shall be delivered to the officer at the
time of the deposit of the bonds or notes.
   (b) If the bonds or notes are given in an action or proceeding,
the principal may file a written application with the court to
determine the market value of the bonds or notes. The application
shall be served upon the beneficiary and proof of service shall be
filed with the application. The application shall contain all of the
following:
   (1) A specific description of the bonds or notes.
   (2) A statement of the current market value of the bonds or notes
as of the date of the filing of the application.
   (3) A statement of the amount of the bonds or notes that the
principal believes would be equal to the required amount of the
deposit.
   (c) The application pursuant to subdivision (b) shall be heard by
the court not less than five days or more than 10 days after service
of the application. If at the time of the hearing no objection is
made to the current market value of the bonds or notes alleged in the
application, the court shall fix the amount of the bonds or notes on
the basis of the market value alleged in the application. If the
beneficiary contends that the current market value of the bonds or
notes is less than alleged in the application, the principal shall
offer evidence in support of the application, and the beneficiary may
offer evidence in opposition. At the conclusion of the hearing, the
court shall make an order determining the market value of the bonds
or notes and shall fix and determine the amount of the bonds or notes
to be deposited by the principal.
  SEC. 3.  Section 995.740 of the Code of Civil Procedure is amended
to read:
   995.740.  If no proceedings are pending to enforce the liability
of the principal on the deposit, the officer shall:
   (a) Pay quarterly, on demand, any interest on the deposit, when
earned in accordance with the terms of the account or certificate, to
the principal.
   (b) Deliver to the principal, on demand, any interest coupons
attached to bonds or notes, including bearer bonds and bearer notes,
as the interest coupons become due and payable, or pay annually any
interest payable on the bonds or notes.
  SEC. 4.  Section 995.760 of the Code of Civil Procedure is amended
to read:
   995.760.  (a) If the principal does not pay the amount of the
liability on the deposit within the time prescribed in Section
995.750, the deposit shall be collected, sold, or otherwise applied
to the liability upon order of the court that entered the judgment of
liability, made upon five days' notice to the parties.
   (b) Bonds or notes, including bearer bonds and bearer notes,
without a prevailing market price shall be sold at public auction.
Notice of sale shall be served on the principal. Bonds or notes
having a prevailing market price may be sold at private sale at a
price not lower than the prevailing market price.
   (c) The deposit shall be distributed in the following order:
   (1) First, to pay the cost of collection, sale, or other
application of the deposit.
   (2) Second, to pay the judgment of liability of the principal on
the deposit.
   (3) Third, the remainder, if any, shall be returned to the
principal.