BILL ANALYSIS Ó
AB 661
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
661 (Mathis)
As Amended June 10, 2015
Majority vote
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|ASSEMBLY: | 75-0 | (May 22, |SENATE: | 37-0 | (June 22, 2015) |
| | |2015) | | | |
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Original Committee Reference: L. GOV.
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.
The Senate amendments delete the Assembly version of this bill,
and instead, clarify that the fee counties can place on recorded
real estate documents to fund real estate fraud prevention and
enforcement shall not apply to any real estate instrument,
paper, or notice if any of the following apply:
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1)The real estate instrument, paper, or notice is accompanied by
a declaration stating that the transfer is subject to a
documentary transfer tax, as specified;
2)The real estate instrument, paper, or notice is recorded
concurrently with a document subject to a documentary transfer
tax, as specified; or,
3)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, as specified. A document that is exempt under this
provision must be accompanied by a statement that includes
both of the following:
a) A statement that the real estate instrument, paper, or
notice is exempt from the fee imposed under existing law
allowing counties to charge a fee on recorded real estate
documents to fund real estate fraud prevention and
enforcement; and,
b) A statement of the recording date and the recorder
identification number or book and page of the previously
recorded document.
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.
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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
tax, as defined in Revenue and Taxation Code Section 11911.
AS PASSED BY THE ASSEMBLY, this bill:
1)Deleted 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)Provided, 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.
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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. This bill revises the definition of what is
exempt by deleting language stating 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 specified.
Instead, this bill provides that the real estate fraud
prevention and enforcement fee allowed under current law shall
not apply to any real estate instrument, paper, or notice if
any of the following apply:
a) The real estate instrument, paper, or notice is
accompanied by a declaration stating that the transfer is
subject to a documentary transfer tax;
b) The real estate instrument, paper, or notice is recorded
concurrently with a document subject to a documentary
transfer tax; or,
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. These documents must be
accompanied by a statement that includes both of the
following:
i) A statement that the real estate instrument, paper,
or notice is exempt from the fee imposed under existing
law allowing counties to charge a fee on recorded real
estate documents to fund real estate fraud prevention and
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enforcement; and,
ii) A statement of the recording date and the recorder
identification number or book and page of the previously
recorded document.
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."
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
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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.
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,
"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.
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Analysis Prepared by:
Angela Mapp / L. GOV. / (916) 319-3958 FN:
0001062