BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |AB 2143 |Hearing | 6/15/16 |
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|Author: |Irwin |Tax Levy: |No |
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|Version: |6/6/16 |Fiscal: |Yes |
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|Consultant|Weinberger |
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County recorder: electronic recording
Expands, until January 1, 2027, the scope of the state law that
allows for the digitized electronic delivery, recording, and
return of some types of recordable instruments.
Background
County recorders accept, officially record, and return copies of
legal documents, notices, or papers. Among the papers that they
record are "instruments," which are written papers signed and
delivered by one person to another that transfer the title to or
create a lien on property, or give a right to a debt or duty.
A recorder of any county may, in lieu of a written paper, accept
for recording digitized images, digital images, or both, of a
recordable instrument, subject to specified conditions (AB 3264,
Frazee, 1988). The Electronic Recording Delivery Act (AB 578,
Leno, 2004) authorizes the digitized electronic delivery,
recording, and return of specified types of instruments
submitted by title insurers, underwritten title companies,
institutional lenders, and government entities through an
electronic record delivery system (ERDS) upon approval by the
county board of supervisors and certification by the Attorney
General. The Act requires the State Attorney General, in
consultation with interested parties, to adopt regulations for
the review, approval, and oversight of electronic recording
AB 2143 (Irwin) 6/6/16 Page 2
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delivery systems.
County recorders want the Legislature to expand state law to
allow additional types of instruments to be recorded though an
ERDS and additional types of entities to submit instruments
through an ERDS.
Proposed Law
State law allows a county recorder to enter into a contract with
a title insurer, underwritten title company, institutional
lender, 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 must not be a vendor
of electronic recording delivery systems.
State law allows a county recorder to accept for recording a
"digitized" electronic record, which means a scanned image of
the original paper document. Assembly Bill 2143 additionally
allows a recorder to accept for recording a "digital" electronic
record, which means a record containing information that is
created, generated, sent, communicated, received, or stored by
electronic means, but not created in original paper form.
State law allows a recorder to accept, through an ERDS, records
that are submitted by a title insurer, underwritten title
company, institutional lender, or an entity of local, state, or
federal government. Assembly Bill 2143 additionally allows a
recorder to accept, through an ERDS, records that are submitted
by an authorized submitter other than a title insurer,
underwritten title company, institutional lender, or an entity
of local, state, or federal government. The authorized
submitter and any agent submitting documents on behalf of the
authorized submitter must 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). Assembly Bill 2143 requires
the Attorney General (AG) to adopt regulations governing the
requirements for general liability coverage.
AB 2143 (Irwin) 6/6/16 Page 3
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State law requires county recorders to submit, to the office of
the Insurance Commissioner, annual statistical reports on the
number of deeds, deeds of trusts and mortgages, reconveyances,
and trustee's deeds that are recorded and filed. Assembly Bill
2143 clarifies that these yearly statistical reports must
include electronically transmitted documents and requires county
recorders to count and report documents in the same manner
without regard to method of transmission.
Assembly Bill 2143 clarifies that language in existing law
referring to "an instrument affecting a right, title, or
interest in real property" means an instrument that is
authorized or required to be recorded pursuant to a specified
statute.
Assembly Bill 2143 makes additional technical and conforming
changes to state law.
Assembly Bill 2143 directs that the changes it makes to current
law will remain in effect only until January 1, 2027, and as of
that date are repealed.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . The process of recording digital and
digitized documents submitted through the electronic delivery
systems is faster and more efficient than the recording process
for paper documents. The 2004 Electronic Recording Delivery Act
(ERDA) authorized specified entities to electronically record
documents. Millions of documents have been recorded by means of
an electronic recording delivery system since the enactment of
ERDA. In California there are no known instances of fraud
perpetrated by use of electronic recording delivery systems. By
expanding both the types of entities that state law authorizes
to electronically record documents and the types of electronic
documents that can be recorded, AB 2143 will allow all of the
parties in the recording process to save even more time and
money through the use of electronic recording delivery systems.
AB 2143 (Irwin) 6/6/16 Page 4
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2. Double-referred . The Senate Rules Committee has ordered a
double-referral of AB 2143 -- first to the Senate Governance &
Finance Committee, which has jurisdiction over bills relating to
county recorders, and then to the Senate Judiciary Committee,
which has jurisdiction over bills relating to real property
ownership.
Assembly Actions
Assembly Local Government Committee:9-0
Assembly Appropriations Committee:20-0
Assembly Floor: 77-0
Support and
Opposition (6/9/16)
Support : County Recorders' Association of California;
California State Association of Counties; California Mortgage
Association.
Opposition : Unknown.
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