BILL ANALYSIS Ó
AB 661
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Brian Maienschein, Chair
AB 661
(Mathis) - As Introduced February 24, 2015
SUBJECT: Counties: recording: real estate instruments.
SUMMARY: Clarifies an exemption in current law from fees that
counties can place on certain recorded real estate documents to
fund real estate fraud prevention and enforcement.
Specifically, this bill:
1)Deletes language stating that, for the purposes of fees that
counties can place on certain recorded real estate instruments
to fund real estate fraud prevention and enforcement, "real
estate instrument" does not include any deed, instrument, or
writing recorded in connection with a transfer subject to the
imposition of a documentary transfer tax, as specified.
2)Provides, instead, that the fee 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, as specified.
EXISTING LAW:
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1)Authorizes any county 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, to be placed in a
Real Estate Fraud Prosecution Trust Fund (Fund).
2)Requires money in the Fund to be expended to support programs
that enhance the capacity of local police and prosecutors to
deter, investigate, and prosecute real estate fraud crimes.
3)Defines the term "real estate instrument" to mean 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.
4)Provides that "real estate instrument" does not include any
deed, instrument, or writing recorded in connection with a
transfer subject to the imposition of a documentary transfer
tax, as defined in Section 11911 of the Revenue and Taxation
Code.
FISCAL EFFECT: None
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COMMENTS:
1)Bill Summary. This bill clarifies an exemption in current law
from fees that counties can place on certain recorded real
estate documents to fund real estate fraud prevention and
enforcement. The bill revises the definition of what is
exempt by stating that the fee 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. This bill is sponsored by the County Recorders
Association of California.
2)Author's Statement. According to the author, "Clean-up
language relating to SB 1342 (2012) is necessary to clarify
the legislative intent of the phrase 'in connection with'
pursuant to Government Code section 27388, when determining if
a fee for the Real Estate Fraud Prosecution Trust Fund is due
on a recorded document.
"The indistinct phrase used in the code, 'in connection with'
does not clearly define which documents should or should not
have the Real Estate Fraud Prosecution Trust Fund fee,
resulting in inconsistent application throughout California
counties. Clearly defining which documents are exempt from
payment of (the fee) will promote uniformity in the
application of this (law) throughout the state."
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3)Background. Under existing law, counties can impose a $10
recording fee on certain real estate documents for the
purposes of deterring, investigating, and prosecuting real
estate fraud crimes, with an emphasis on fraud against
individuals whose residences are in danger of, or are in,
foreclosure. Administrative costs are capped at 10% of
revenues.
State law assigns 60% of the Fund proceeds to the county
district attorney's office and 40% to eligible law enforcement
agencies. In order to be eligible, a law enforcement agency
must either have a unit or division devoted to real estate
investigation or prosecution, or have been actively involved
in such cases for the prior three years.
The law specifies which documents are subject to this fee, and
provides an exemption to the fee for "any deed, instrument, or
writing recorded in connection with a transfer subject to the
imposition of a documentary transfer tax" (the sale of real
property). This language was added by SB 1342 (Emmerson),
Chapter 104, Statutes of 2012.
The sponsor contends that the phrase "in connection with" is
unclear, such that county counsels are directing county
recorders to impose the fee in different ways. The sponsor is
proposing the language in this bill, "related to, and recorded
concurrently with," as a more specific alternative.
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4)Previous Legislation. SB 1342 (Emmerson), Chapter 104,
Statutes of 2012, among other provisions, clarified an
exemption to the fee for "any deed, instrument, or writing
recorded in connection with a transfer subject to the
imposition of a documentary transfer tax."
5)Arguments in Support. Contra Costa County Clerk-Recorder and
Registrar of Voters Joseph E. Canciamilla, in support, writes,
"As it presently stands, some citizens may pay the fee when
not legally required to do so while others may erroneously
claim exemption simply because the current legal language is
not clear. Clarification of the existing language will
facilitate accurate advance calculation of recording fees,
which is essential when purchasing or refinancing a home since
all fees must be paid at the time a document is submitted for
recording. Incorrect fees can result not only in delays but
possibly financial implications to potential homeowners.
"Assembly Bill 661 will clarify the current language and
enable uniform application of the fee throughout 58 counties.
Moreover, accurately calculated fees will reduce delays in
recording documents related to homeownership."
6)Arguments in Opposition. None on file.
REGISTERED SUPPORT / OPPOSITION:
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Support
County Recorders' Association of California [SPONSOR]
Alameda County District Attorney, Nancy E. O'Malley
Alpine County Assessor/Recorder, Donald O'Connor
Calaveras County Clerk-Recorder, Rebecca Turner
California District Attorneys Association
California Escrow Association
California Land Title Association
California State Association of Counties
Contra Costa County Clerk-Recorder and Registrar of Voters,
Joseph E. Canciamilla
Inyo County Clerk and Recorder, Kammi Foote
Riverside County Assessor-County Clerk-Recorder, Peter Aldana
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Rural County Representatives of California
San Bernardino County Assessor-Recorder-County Clerk, Bob Dutton
San Francisco Office of the Assessor-Recorder, Carmen Chu
Sonoma County Clerk-Recorder-Assessor, William F. Rousseau
Opposition
None on file
Analysis Prepared by:Angela Mapp / L. GOV. / (916) 319-3958