Amended in Assembly April 12, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2143


Introduced by Assembly Member Irwin

February 17, 2016


An act to amendbegin delete Sections 27391, 27393, and 27397.5 ofend deletebegin insert Section 27390 of, and to amend, repeal, and add Sections 27391 and 27393 to,end insert the Government Code, relating to electronic recording.

LEGISLATIVE COUNSEL’S DIGEST

AB 2143, as amended, Irwin. County recorder: electronic recording.

The Electronic Recording Delivery Act of 2004 authorizes a county recorder, upon approval by resolution of the board of supervisors and system certification by the Attorney General, to establish an electronic recording delivery system for the delivery for recording of specified digitized electronic records, subject to specified conditions. The act authorizes a county recorder to enter into a contract with specified entities for the delivery for recording, and return to the party requesting recording a digitized electronic record that is an instrument affecting a right, title, or interest in real property.begin delete The act also authorizes a county recorder to contract with the specified entities or their authorized agents to be an authorized submitter of a digital or digitized electronic record that is an instrument of reconveyance, substitution of trustee, or assignment of deed of trust.end delete

begin delete

The bill

end delete

begin insertThis bill, until January 1, 2027,end insert would authorize a county recorder to also enter into a contract with an authorized submitter for the delivery for recording, and return to the party requesting recording, of a digital or digitized electronic record that is an instrument to be recorded consistent with a specifiedbegin delete provision, or for the submission of a digital or digitized electronic record.end deletebegin insert provision.end insert Thebegin delete billend deletebegin insert bill, until January 1, 2027,end insert would require an authorized submitter, as specified, and any agent submitting documents on behalf of an authorized submitter, to provide proof of financial responsibility in the form of general liability coverage, as provided.

Existing law requires the Attorney General, in consultation with interested parties, to adopt regulations for the review, approval, and oversight of electronic recording delivery systems. Existing law authorizes the regulations to include specified requirements and procedures.

Thisbegin delete billend deletebegin insert bill, until January 1, 2027,end insert would additionally authorize the regulations to include requirements for general liability coverage as described above.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 27390 of the end insertbegin insertGovernment Codeend insertbegin insert is
2amended to read:end insert

3

27390.  

(a) This article shall be known and may be cited as the
4Electronic Recording Delivery Act of 2004.

5(b) For the purposes of this article, the following definitions
6shall apply:

7(1) “Authorized submitter” means a party that has entered into
8a contract with a county recorder pursuant tobegin delete subdivision (b) ofend delete
9 Section 27391 and is not disqualified pursuant to Section 27395.

10(2) “Computer security auditor” means computer security
11personnel hired to perform an independent audit of the electronic
12recording delivery system. The computer security auditor shall be
13independent of the county recorder and the authorized submitter
14and shall not be the same contractor hired to establish or participate
15in a county’s electronic recording delivery system or in the
16authorized submitter’s portion of that system.

17(3) “Digital electronic record” means a record containing
18information that is created, generated, sent, communicated,
19received, or stored by electronic means, but not created in original
20paper form.

P3    1(4) “Digitized electronic record” means a scanned image of the
2original paper document.

3(5) “Electronic recording delivery system” means a system to
4deliver for recording, and to return to the party requesting
5recording, digitized or digital electronic records.

6(6) “Security testing” means an independent security audit by
7a computer security auditor, including, but not limited to, attempts
8to penetrate an electronic recording delivery system for the purpose
9of testing the security of that system.

10(7) “Source code” means a program or set of programs, readable
11and maintainable by humans, translated or interpreted into a form
12that the electronic recording delivery system can execute.

13(8) “System certification” means the issuance of a confirmation
14letter regarding a county’s electronic recording delivery system
15by the Attorney General.

16

begin deleteSECTION 1.end delete
17
begin insertSEC. 2.end insert  

Section 27391 of the Government Code is amended
18to read:

19

27391.  

(a) Upon approval by resolution of the board of
20supervisors and system certification by the Attorney General, a
21county recorder may establish an electronic recording delivery
22system.

23(b) Upon system certification, a county recorder may enter into
24a contract with a titlebegin delete insurer,end deletebegin insert insurerend insert as defined in Section 12340.4
25of the Insurance Code, underwritten titlebegin delete company,end deletebegin insert companyend insert as
26defined in Section 12340.5 of the Insurance Code, institutional
27begin delete lender,end deletebegin insert lenderend insert as defined in paragraph (1), (2), or (4) of subdivision
28(j) of Section 50003 of the Financial Code, or an entity of local,
29state, or federal government for the delivery for recording, and
30return to the party requesting recording, of a digital or digitized
31electronic record that is an instrument to be recorded consistent
32with subdivision (a) of Section 27201. The contract may provide
33for the delivery of documents by an agent. However, the agent
34shall not be a vendor of electronic recording delivery systems.

35(c) (1) A county recorder may enter into a contract with an
36authorized submitter not authorized pursuant to subdivision (b)
37for the delivery for recording, and return to the party requesting
38recording, of a digital or digitized electronic record that is an
39instrument to be recorded consistent with subdivision (a) of Section
4027201. The contract may provide for the delivery of documents
P4    1by an agent. However, the agent shall not be a vendor of electronic
2recording delivery systems.

3(2) An authorized submitter authorized pursuant to this
4subdivision and any agent submitting documents on behalf of an
5authorized submitter pursuant to this subdivision shall provide
6proof of financial responsibility by providing a certificate of
7insurance evidencing an amount of general liability coverage of
8at least one million dollars ($1,000,000).

9(d) A county recorder may refuse to enter into a contract with
10any party or may terminate or suspend access to a system for any
11good faith reason, including, but not limited to, a determination
12by the county recorder that termination or suspension is necessary
13to protect the public interest, to protect the integrity of public
14records, or to protect homeowners from financial harm, or if the
15volume or quality of instruments submitted by the requester is not
16sufficient to warrant electronic recordation. A county recorder may
17also terminate or suspend access to a system if a party commits a
18substantive breach of the contract, the requirements of this article,
19or the regulations adopted pursuant to this article.

20(e) Notwithstanding Section 27321, a county recorder may
21require a party electronically submitting records to mail a copy of
22the recorded electronic document to the address specified in the
23instructions for mailing upon completion of recording.

24(f) When a signature is required to be accompanied by a notary’s
25seal or stamp, that requirement is satisfied if the electronic
26signature of the notary contains all of the following:

27(1) The name of the notary.

28(2) The words “Notary Public.”

29(3) The name of the county where the bond and oath of office
30of the notary are filed.

31(4) The sequential identification number assigned to the notary,
32if any.

33(5) The sequential identification number assigned to the
34manufacturer or vendor of the notary’s physical or electronic seal,
35if any.

begin insert

36
(g) This section shall remain in effect only until January 1, 2027,
37and as of that date is repealed.

end insert
38begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 27391 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
39read:end insert

begin insert
P5    1

begin insert27391.end insert  

(a) Upon approval by resolution of the board of
2supervisors and system certification by the Attorney General, a
3county recorder may establish an electronic recording delivery
4system.

5
(b) Upon system certification, a county recorder may enter into
6a contract with a title insurer as defined in Section 12340.4 of the
7Insurance Code, underwritten title company as defined in Section
812340.5 of the Insurance Code institutional lender, as defined in
9paragraph (1), (2), or (4) of subdivision (j) of Section 50003 of
10the Financial Code, or an entity of local, state, or federal
11government for the delivery for recording, and return to the party
12requesting recording, of a digitized electronic record that is an
13instrument affecting a right, title, or interest in real property. The
14contract may provide for the delivery of documents by an agent.
15However, the agent shall not be a vendor of electronic recording
16delivery systems.

17
(c) A county recorder may refuse to enter into a contract with
18any party or may terminate or suspend access to a system for any
19good faith reason, including, but not limited to, a determination
20by the county recorder that termination or suspension is necessary
21to protect the public interest, to protect the integrity of public
22records, or to protect homeowners from financial harm, or if the
23volume or quality of instruments submitted by the requester is not
24sufficient to warrant electronic recordation. A county recorder
25may also terminate or suspend access to a system if a party
26commits a substantive breach of the contract, the requirements of
27this article, or the regulations adopted pursuant to this article.

28
(d) Notwithstanding Section 27321, a county recorder may
29require a party electronically submitting records to mail a copy
30of the recorded electronic document to the address specified in
31the instructions for mailing upon completion of recording.

32
(e) When a signature is required to be accompanied by a
33notary’s seal or stamp, that requirement is satisfied if the electronic
34signature of the notary contains all of the following:

35
(1) The name of the notary.

36
(2) The words “Notary Public.”

37
(3) The name of the county where the bond and oath of office
38of the notary are filed.

39
(4) The sequential identification number assigned to the notary,
40if any.

P6    1
(5) The sequential identification number assigned to the
2manufacturer or vendor of the notary’s physical or electronic seal,
3if any.

4
(f) The section shall become operative on January 1, 2027.

end insert
5

begin deleteSEC. 2.end delete
6
begin insertSEC. 4.end insert  

Section 27393 of the Government Code is amended
7to read:

8

27393.  

(a) The Attorney General shall, in consultation with
9interested parties, adopt regulations for the review, approval, and
10oversight of electronic recording delivery systems. Regulations
11shall be adopted pursuant to the Administrative Procedure Act
12(Chapter 3.5 (commencing with Section 11340) of Part 1 of
13Division 3). The regulations shall comply with Section 12168.7.

14(b) The regulations adopted pursuant to subdivision (a) may
15include, but need not be limited to, all of the following:

16(1) Establishment of baseline technological and procedural
17specifications for electronic recording delivery systems.

18(2) Requirements for security, capacity, reliability, and
19uniformity.

20(3) Requirements as to the nature and frequency of computer
21security audits.

22(4) A statement of a detailed and uniform definition of the term
23“source code” consistent with paragraph (7) of subdivision (b) of
24Section 27390, and as used in this article, and applicable to each
25county’s electronic recording delivery system.

26(5) Requirements for placement of a copy of the operating
27system, source code, compilers, and all related software associated
28with each county’s electronic recording delivery system in an
29approved escrow facility prior to that system’s first use.

30(6) Requirements to ensure that substantive modifications to an
31operating system, compilers, related software, or source code are
32approved by the Attorney General.

33(7) Procedures for initial certification of vendors offering
34software and other services to counties for electronic recording
35delivery systems.

36(8) Requirements for system certification and for oversight of
37approved systems.

38(9) Requirements for general liability coverage required by
39subdivision (c) of Section 27391.

P7    1(10) Requirements for fingerprinting and criminal records checks
2required by Section 27395, including a list of employment positions
3or classifications subject to criminal records checks under
4subdivision (f) of that section.

5(11) Requirements for uniform index information that shall be
6included in every digitized or digital electronic record.

7(12) Requirements for protecting proprietary information
8accessed pursuant to subdivision (e) of Section 27394 from public
9disclosure.

10(13) Requirements for certification under Section 27397.5.

11(c) The Attorney General may promulgate any other regulations
12necessary to fulfill his or her obligations under this article.

13(d) An electronic recording delivery system shall be subject to
14local inspection and review by the Attorney General. The Attorney
15General shall furnish a statement of any relevant findings
16associated with a local inspection of an electronic recording
17delivery system, to the county recorder and the district attorney of
18the affected county, and to all technology vendors associated with
19that system.

begin insert

20
(e) This section shall remain in effect only until January 1, 2027,
21and as of that date is repealed.

end insert
22begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 27393 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
23read:end insert

begin insert
24

begin insert27393.end insert  

(a) The Attorney General shall, in consultation with
25interested parties, adopt regulations for the review, approval, and
26oversight of electronic recording delivery systems. Regulations
27shall be adopted pursuant to the Administrative Procedure Act
28(Chapter 3.5 (commencing with Section 11340) of Part 1 of
29Division 3). The regulations shall comply with Section 12168.7.

30
(b) The regulations adopted pursuant to subdivision (a) may
31include, but need not be limited to, all of the following:

32
(1) Establishment of baseline technological and procedural
33 specifications for electronic recording delivery systems.

34
(2) Requirements for security, capacity, reliability, and
35uniformity.

36
(3) Requirements as to the nature and frequency of computer
37security audits.

38
(4) A statement of a detailed and uniform definition of the term
39“source code” consistent with paragraph (7) of subdivision (b) of
P8    1Section 27390, and as used in this article, and applicable to each
2county’s electronic recording delivery system.

3
(5) Requirements for placement of a copy of the operating
4 system, source code, compilers, and all related software associated
5with each county’s electronic recording delivery system in an
6approved escrow facility prior to that system’s first use.

7
(6) Requirements to ensure that substantive modifications to an
8operating system, compilers, related software, or source code are
9approved by the Attorney General.

10
(7) Procedures for initial certification of vendors offering
11software and other services to counties for electronic recording
12delivery systems.

13
(8) Requirements for system certification and for oversight of
14approved systems.

15
(9) Requirements for fingerprinting and criminal records checks
16required by Section 27395, including a list of employment positions
17or classifications subject to criminal records checks under
18subdivision (f) of that section.

19
(10) Requirements for uniform index information that shall be
20included in every digitized or digital electronic record.

21
(11) Requirements for protecting proprietary information
22accessed pursuant to subdivision (e) of Section 27394 from public
23disclosure.

24
(12) Requirements for certification under Section 27397.5.

25
(c) The Attorney General may promulgate any other regulations
26necessary to fulfill his or her obligations under this article.

27
(d) An electronic recording delivery system shall be subject to
28local inspection and review by the Attorney General. The Attorney
29General shall furnish a statement of any relevant findings
30associated with a local inspection of an electronic recording
31delivery system, to the county recorder and the district attorney
32of the affected county, and to all technology vendors associated
33with that system.

34
(e) This section shall become operative on January 1, 2027.

end insert
begin delete
35

SEC. 3.  

Section 27397.5 of the Government Code is amended
36to read:

37

27397.5.  

(a) A county recorder may include in the county’s
38electronic recording delivery system a secure method for accepting
39for recording a digital or digitized electronic record.

P9    1(b) A county recorder may contract with an authorized submitter
2or their authorized agents, to be an authorized submitter of the
3documents specified in subdivision (a).

4(c) With respect to the electronic submission of the records
5described in subdivision (a), the requirements that an authorized
6submitter be subject to a security audit under Section 27394 and
7a criminal records check under Section 27395 shall not apply where
8the certification requirements of subdivision (d) have been met.

9(d) (1) In order for subdivision (c) to apply, the county recorder
10and the Attorney General shall certify that the method of
11submission allowed under the system will not permit an authorized
12 submitter or its employees and agents, or any third party, to modify,
13manipulate, insert, or delete information in the public record,
14maintained by the county recorder, or information in electronic
15records submitted pursuant to subdivision (b) of Section 27391.

16(2) Certification under this section may be withdrawn by either
17the county recorder or the Attorney General at any time either
18determines that the requirements of this subdivision are not met.

19(e) For purposes of this section, an agent of an authorized
20submitter shall not include a vendor of electronic recording delivery
21systems.

end delete


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