Amended in Senate June 10, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 661

Introduced by Assembly Member Mathis

February 24, 2015

An act to amend Section 27388 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 661, as amended, Mathis. Counties: recording: real estate instruments.

Existing law authorizes the board of supervisors to adopt, by resolution, a fee of up to $10 for each recording of a real estate instrument, paper, or notice required or permitted by law to be recorded, except as specified. Existing law defines the term “real estate instrument” to exclude a deed, instrument, or writing recorded in connection with a transfer subject to a documentary transfer tax.

This bill would recast this latter exclusion from a “real estate instrument” as a statement that the above-described fee does not apply to any real estate instrument, paper, or notice begin delete related to and end delete begin insert accompanied by a declaration stating that the transfer is subject to a documentary transfer tax, is end insert recorded concurrently with begin insert a transfer subject to a documentary transfer tax, or is presented for recording within the same business day as, and is related to the recording of, end insert a transfer subject to a documentary transfer tax.

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 27388 of the Government Code is
amended to read:

27388.  

(a)  begin insert (1) end insert begin insert   end insert In addition to any other recording fees specified
in this code, upon the adoption of a resolution by the county board
of supervisors, a fee of up to ten dollars ($10) shall be paid at the
time of recording of every real estate instrument, paper, or notice
required or permitted by law to be recorded within that county,
except those expressly exempted from payment of recording begin delete fees.
A fee imposed pursuant to this subdivision shall not apply to any
real estate instrument, paper, or notice related to, and recorded
concurrently with, a transfer subject to a documentary transfer tax
pursuant to Section 11911 of the Revenue and Taxation Code. end delete begin insert fees
and except as provided in paragraph (2). end insert For purposes of this
section, “real estate instrument” means a deed of trust, an
assignment of deed of trust, an amended deed of trust, an abstract
of judgment, an affidavit, an assignment of rents, an assignment
of a lease, a construction trust deed, covenants, conditions, and
restrictions (CC&Rs), a declaration of homestead, an easement, a
lease, a lien, a lot line adjustment, a mechanics lien, a modification
for deed of trust, a notice of completion, a quitclaim deed, a
subordination agreement, a release, a reconveyance, a request for
notice, a notice of default, a substitution of trustee, a notice of
trustee sale, a trustee’s deed upon sale, or a notice of rescission of
declaration of default, or any Uniform Commercial Code
amendment, assignment, continuation, statement, or termination.
The fees, after deduction of any actual and necessary administrative
costs incurred by the county recorder in carrying out this section,
shall be paid quarterly to the county auditor or director of finance,
to be placed in the Real Estate Fraud Prosecution Trust Fund. The
amount deducted for administrative costs shall not exceed 10
percent of the fees paid pursuant to this section.

begin insert

(2) The fee imposed by paragraph (1) shall not apply to any
real estate instrument, paper, or notice if any of the following
apply:

end insert begin insert

(A) The real estate instrument, paper, or notice is accompanied
by a declaration stating that the transfer is subject to a
documentary transfer tax pursuant to Section 11911 of the Revenue
and Taxation Code.

end insert begin insert

(B) The real estate instrument, paper, or notice is recorded
concurrently with a document subject to a documentary transfer
tax pursuant to Section 11911 of the Revenue and Taxation Code.

end insert begin insert

(C) The real estate instrument, paper, or notice is presented for
recording within the same business day as, and is related to the
recording of, a document subject to a documentary transfer tax
pursuant to Section 11911 of the Revenue and Taxation Code. A
real estate instrument, paper, or notice that is exempt under this
subparagraph shall be accompanied by a statement that includes
both of the following:

end insert begin insert

(i) A statement that the real estate instrument, paper, or notice
is exempt from the fee imposed under paragraph (1).

end insert begin insert

(ii) A statement of the recording date and the recorder
identification number or book and page of the previously recorded
document.

end insert

(b) Money placed in the Real Estate Fraud Prosecution Trust
Fund shall be expended to fund programs to enhance the capacity
of local police and prosecutors to deter, investigate, and prosecute
real estate fraud crimes. After deduction of the actual and necessary
administrative costs referred to in subdivision (a), 60 percent of
the funds shall be distributed to district attorneys subject to review
pursuant to subdivision (d), and 40 percent of the funds shall be
distributed to local law enforcement agencies within the county
in accordance with subdivision (c). In those counties where the
investigation of real estate fraud is done exclusively by the district
attorney, after deduction of the actual and necessary administrative
costs referred to in subdivision (a), 100 percent of the funds shall
be distributed to the district attorney, subject to review pursuant
to subdivision (d). A portion of the funds may be directly allocated
to the county recorder to support county recorder fraud prevention
programs, including, but not limited to, the fraud prevention
program provided for in Section 27297.7. Prior to establishing or
increasing fees pursuant to this section, the board of supervisors
may consider support for county recorder fraud prevention
programs. The funds so distributed shall be expended for the
exclusive purpose of deterring, investigating, and prosecuting real
estate fraud crimes.

(c) The county auditor or director of finance shall distribute
funds in the Real Estate Fraud Prosecution Trust Fund to eligible
law enforcement agencies within the county pursuant to subdivision
(b), as determined by a Real Estate Fraud Prosecution Trust Fund
Committee composed of the district attorney, the county chief
administrative officer, the chief officer responsible for consumer
protection within the county, and the chief law enforcement officer
of one law enforcement agency receiving funding from the Real
Estate Fraud Prosecution Trust Fund, the latter being selected by
a majority of the other three members of the committee. The chief
law enforcement officer shall be a nonvoting member of the
committee and shall serve a one-year term, which may be renewed.
Members may appoint representatives of their offices to serve on
the committee. If a county lacks a chief officer responsible for
consumer protection, the county board of supervisors may appoint
an appropriate representative to serve on the committee. The
committee shall establish and publish deadlines and written
procedures for local law enforcement agencies within the county
to apply for the use of funds and shall review applications and
make determinations by majority vote as to the award of funds
using the following criteria:

(1) Each law enforcement agency that seeks funds shall submit
a written application to the committee setting forth in detail the
agency’s proposed use of the funds.

(2) In order to qualify for receipt of funds, each law enforcement
agency submitting an application shall provide written evidence
that the agency either:

(A) Has a unit, division, or section devoted to the investigation
or prosecution of real estate fraud, or both, and the unit, division,
or section has been in existence for at least one year prior to the
application date.

(B) Has on a regular basis, during the three years immediately
preceding the application date, accepted for investigation or
prosecution, or both, and assigned to specific persons employed
by the agency, cases of suspected real estate fraud, and actively
investigated and prosecuted those cases.

(3) The committee’s determination to award funds to a law
enforcement agency shall be based on, but not be limited to, (A)
the number of real estate fraud cases filed in the prior year; (B)
the number of real estate fraud cases investigated in the prior year;
(C) the number of victims involved in the cases filed; and (D) the
total aggregated monetary loss suffered by victims, including
individuals, associations, institutions, or corporations, as a result
of the real estate fraud cases filed, and those under active
investigation by that law enforcement agency.

(4) Each law enforcement agency that, pursuant to this section,
has been awarded funds in the previous year, upon reapplication
for funds to the committee in each successive year, in addition to
any information the committee may require in paragraph (3), shall
be required to submit a detailed accounting of funds received and
expended in the prior year. The accounting shall include (A) the
amount of funds received and expended; (B) the uses to which
those funds were put, including payment of salaries and expenses,
purchase of equipment and supplies, and other expenditures by
type; (C) the number of filed complaints, investigations, arrests,
and convictions that resulted from the expenditure of the funds;
and (D) other relevant information the committee may reasonably
require.

(d) The county board of supervisors shall annually review the
effectiveness of the district attorney in deterring, investigating,
and prosecuting real estate fraud crimes based upon information
provided by the district attorney in an annual report. The district
attorney shall submit the annual report to the board on or before
September 1 of each year.

(e) A county shall not expend funds held in that county’s Real
Estate Fraud Prosecution Trust Fund until the county’s
auditor-controller verifies that the county’s district attorney has
submitted an annual report for the county’s most recent full fiscal
year pursuant to the requirements of subdivision (d).

(f) The intent of the Legislature in enacting this section begin insert is end insert to
have an impact on real estate fraud involving the largest number
of victims. To the extent possible, an emphasis should be placed
on fraud against individuals whose residences are in danger of, or
are in, foreclosure as defined in subdivision (b) of Section 1695.1
of the Civil Code. Case filing decisions continue to be at the
discretion of the prosecutor.

(g) A district attorney’s office or a local enforcement agency
that has undertaken investigations and prosecutions that will
continue into a subsequent program year may receive nonexpended
funds from the previous fiscal year subsequent to the annual
submission of information detailing the accounting of funds
received and expended in the prior year.

(h) No money collected pursuant to this section shall be
expended to offset a reduction in any other source of funds. Funds
from the Real Estate Fraud Prosecution Trust Fund shall be used
only in connection with criminal investigations or prosecutions
involving recorded real estate documents.