BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNANCE AND FINANCE Senator Robert M. Hertzberg, Chair 2015 - 2016 Regular ------------------------------------------------------------------ |Bill No: |AB 2143 |Hearing | 6/15/16 | | | |Date: | | |----------+---------------------------------+-----------+---------| |Author: |Irwin |Tax Levy: |No | |----------+---------------------------------+-----------+---------| |Version: |6/6/16 |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant|Weinberger | |: | | ----------------------------------------------------------------- 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 of ? 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 of ? 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 of ? 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. -- END --