Amended in Senate June 6, 2016

Amended in Assembly April 12, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2143

Introduced by Assembly Member Irwin

February 17, 2016

An act to amend begin delete Section end delete begin insert Sections 27296 and end insert 27390 of, and to amend, repeal, and add Sections 27391 and 27393 begin delete to, end delete begin insert of, end insert the Government Code, relating to electronic recording.

LEGISLATIVE COUNSEL’S DIGEST

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

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Existing law requires the county recorder in each county to complete a yearly statistical report on a specified form of documents recorded and filed.

end insert begin insert

This bill would require the report to also include information regarding electronically submitted documents, and would require documents to be counted and reported in the same manner without regard to method of transmission.

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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 begin delete recording end delete begin insert recording, end insert a digitized electronic record that is an instrument affecting a right, title, or interest in real property.

This bill, until January 1, 2027, 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 specified provision. The bill, until January 1, 2027, 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.

This bill, until January 1, 2027, 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:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 27296 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

27296.  

begin insert (a) end insert begin insert   end insert The county recorder in each county shall complete
a yearly statistical report of begin delete documents end delete begin insert documents, including
electronically transmitted documents, end insert recorded and filed on the
form begin delete herein described. Such a end delete begin insert described in subdivision (b). The end insert
report shall be submitted to the office of the Insurance
Commissioner. begin insert Documents shall be counted and reported in the
same manner without regard to method of transmission. end insert The county
recorder may either charge for copies of this report or may disburse
the report without fee for public information. Certified and
noncertified copies of any records issued by the county recorder
shall not be included in this report.

begin delete

The

end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert standard statistical report form shall be substantially
as follows:

 

Documents Recorded and Filed
	Year
Deeds
Deeds of Trust and Mortgages
Reconveyances
Trustee’s Deeds
Total number of documents recorded and filed

 

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

Section 27390 of the Government Code is amended
to read:

27390.  

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

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

(1) “Authorized submitter” means a party that has entered into
a contract with a county recorder pursuant to Section 27391 and
is not disqualified pursuant to Section 27395.

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

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

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

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

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

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

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

begin delete SEC. 2. end delete

begin insert SEC. 3. end insert   

Section 27391 of the Government Code is amended
to read:

27391.  

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

(b) Upon system certification, a county recorder may enter into
a contract with a title insurer as defined in Section 12340.4 of the
Insurance Code, underwritten title company as defined in Section
12340.5 of the Insurance Code, institutional lender as defined in
paragraph (1), (2), or (4) of subdivision (j) of Section 50003 of the
Financial Code, or an entity of local, state, or federal government
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 subdivision (a) of Section
27201. The contract may provide for the delivery of documents
by an agent. However, the agent shall not be a vendor of electronic
recording delivery systems.

(c) (1) A county recorder may enter into a contract with an
authorized submitter not authorized pursuant to subdivision (b)
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 subdivision (a) of Section
27201. The contract may provide for the delivery of documents
by an agent. However, the agent shall not be a vendor of electronic
recording delivery systems.

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

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

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

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

(1) The name of the notary.

(2) The words “Notary Public.”

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

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

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

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

begin delete SEC. 3. end delete

begin insert SEC. 4. end insert   

Section 27391 is added to the Government Code, to
read:

27391.  

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

(b) Upon system certification, a county recorder may enter into
a contract with a title insurer as defined in Section 12340.4 of the
Insurance Code, underwritten title company as defined in Section
12340.5 of the Insurance begin delete Code end delete begin insert Code, end insert institutional begin delete lender, end delete begin insert lender end insert
as defined in paragraph (1), (2), or (4) of subdivision (j) of Section
50003 of the Financial Code, or an entity of local, state, or federal
government for the delivery for recording, and return to the party
requesting recording, of a digitized electronic record that is an
instrument affecting a right, title, or interest in real property. The
contract may provide for the delivery of documents by an agent.
However, the agent shall not be a vendor of electronic recording
delivery systems.

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

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

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

(1) The name of the notary.

(2) The words “Notary Public.”

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

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

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

(f)  begin delete The end delete begin insert This end insert begin insert end insert section shall become operative on January 1, 2027.

begin delete SEC. 4. end delete

begin insert SEC. 5. end insert   

Section 27393 of the Government Code is amended
to read:

27393.  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(13) Requirements for certification under Section 27397.5.

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

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

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

begin delete SEC. 5. end delete

begin insert SEC. 6. end insert   

Section 27393 is added to the Government Code, to
read:

27393.  

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

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

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

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

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

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

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

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

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

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

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

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

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

(12) Requirements for certification under Section 27397.5.

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

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

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