BILL ANALYSIS Ó
AB 661
Page 1
ASSEMBLY THIRD READING
AB
661 (Mathis)
As Introduced February 24, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+----------------------+--------------------|
|Local |8-0 |Maienschein, Alejo, | |
|Government | |Chiu, Cooley, Gordon, | |
| | |Holden, Linder, | |
| | |Waldron | |
| | | | |
| | | | |
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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.
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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:
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 and 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
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tax, as defined in Revenue and Taxation Code Section 11911.
FISCAL EFFECT: None
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 [(Emmerson), Chapter 104, Statutes of 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 from 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 .
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.
4)Previous Legislation. SB 1342 , among other provisions,
clarified an exemption from 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,
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"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.
Analysis Prepared by:
Angela Mapp / L. GOV. / (916) 319-3958 FN:
0000342