BILL ANALYSIS Ó
AB 2143
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2143 (Irwin) - As Amended April 12, 2016
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|Policy |Local Government |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill, until January 1, 2027, allows additional persons and
entities to deliver electronic records to county recorders for
recording, and expands the types of electronic records that may
be delivered to a county recorder for recording.
FISCAL EFFECT:
1)Unknown costs to the California Department of Insurance (CDI),
but likely less than $150,000, to address inconsistencies in
terminology being introduced by this bill. (See Comment #3
AB 2143
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below.)
2)Minor and absorbable costs to the Department of Justice (DOJ)
to update regulations.
3)Potential cost savings for counties from increased
e-recordings. County Recorders assert that e-recordings are
more cost effective than traditional paper recordings. This
bill will expand the potential use of e-recordings by counties
that already use it, as well as encourage counties that do not
currently allow e-recording to make the transition.
COMMENTS:
1)Purpose. According to the author, "Current law allows
specified title organizations and financial institutions to
electronically record certain legal documents with county
recorders provided that they register with the DOJ and meet
minimum liability requirements. AB 2143 will expand
electronic recording to all entities that register with the
DOJ and hold minimum liability insurance. Since 2004,
electronic recording has proven to be safe, efficient, and
cost effective for both private enterprise and government
entities. It's time to expand this to all entities and bring
California into the 21st century."
2)Background. Generally, county recorders are responsible for
examining and recording all documents that deal with
establishing ownership of land in counties. This includes the
recording of title documents, notes, and home loan payoffs by
homeowners, title companies, mortgage companies and government
agencies involved in real estate transactions.
AB 2143
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AB 578 (Leno), Chapter 621, Statutes of 2004, established the
Electronic Recording Delivery Act of 2004 (ERDA) and created a
statewide system for county recorders to record electronic
records of real property instruments. AB 578 required the
State Attorney General (AG) to adopt regulations for
certification and oversight of electronic recording delivery
system (ERDS) and associated software and other services.
In order to establish an ERDS, a county recorder must be
authorized by resolution of the county board and must obtain
system certification from the ERDS Program, which is
administered by the AG. A county's ERDS must meet specified
security standards and all persons with a secure access role
are required to undergo fingerprint criminal history checks.
To date, the AG has certified ERDS for 24 counties. Both the
AG and the County Recorders Association of California attest
that there have been no instances of fraud connected with the
use of ERDS since it became operational.
3)CDI Suggested Amendment. CDI annually surveys the county
recorders to ascertain the number of documents recorded. This
information is tabulated and used by the CDI to determine a
underwritten title company's (UTC's) net worth; to determine
UTC renewal of license fees; and, as of July 1, 2016, to
determine the financial responsibility for UTCs which are
licensed to perform as enacted effective July 1, 2016.
AB 2143 provides for the electronic delivery of "records," not
documents. Since the language of the bill doesn't match that
of the Insurance Code, which requires a county recorder
document count, there is a question presented as to how
electronic delivery of records may impact the count of
recorded documents. It helps to answer the question of
whether a record is the same as a document, and also if
electronic records as proposed to be submitted under the bill
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be included in the document count. CDI has proposed a
clarifying amendment to address this issue, and it will remove
the fiscal impact to CDI.
4)Prior Legislation.
a) AB 1738 (Committee on Local Government), Chapter 520,
Statutes of 2005, required a federal background check to be
conducted before any person could be authorized secure
access to an ERDS.
b) AB 578 (Leno), Chapter 621, Statutes of 2004,
established ERDA and created a statewide system for county
recorders to record electronic records of real property
instruments.
c) AB 3296 (Brewer), Chapter 842, Statutes of 1996, allowed
Orange County and San Bernardino County to accept digitized
property records from title companies under specified
conditions, until January 1, 1999.
d) AB 1906 (Brewer), Chapter 463, Statutes of 1998,
extended the pilot program allowing Orange County and San
Bernardino County to accept digitized property records from
title companies, and required the AG to appoint a task
force to address technical, legal, security, and economic
issues associated with electronic recordation.
AB 2143
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Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081