BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2143| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2143 Author: Irwin (D) Amended: 6/28/16 in Senate Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/15/16 AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach, Pavley SENATE JUDICIARY COMMITTEE: 7-0, 6/21/16 AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 77-0, 5/23/16 - See last page for vote SUBJECT: County recorder: electronic recording SOURCE: Author DIGEST: This bill 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. ANALYSIS: Existing law: AB 2143 Page 2 1)Allows a county recorder to accept for recording, in lieu of a written paper, digitized images, digital images, or both, of a recordable instrument, subject to specified conditions. 2)Authorizes, pursuant to the Electronic Recording Delivery Act (ERDA), 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. This bill: 1)Allows a county 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. 2)Allows a county 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. 3)Requires that 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 reasonably adequate to protect against liability and cover potential losses. 4)Requires the Attorney General to adopt regulations governing the requirements for general liability coverage, including adopting a rule or regulation setting the amount of required liability coverage. AB 2143 Page 3 5)Clarifies that yearly statistical reports submitted by county recorders to the Office of the Insurance Commissioner must include electronically transmitted documents and requires county recorders to count and report documents in the same manner without regard to method of transmission. 6)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. 7)Makes additional technical and conforming changes to state law. 8)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. 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, Chapter 400 of the Statutes of 1988). The ERDA (AB 578, Leno, Chapter 621, Statutes of 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 AB 2143 Page 4 through an 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 ERDSs. 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. Comments 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 ERDA authorized specified entities to electronically record documents. Millions of documents have been recorded by means of an ERDS since the enactment of ERDA. In California, there are no known instances of fraud perpetrated by use of ERDSs. 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, this bill will allow all of the parties in the recording process to save even more time and money through the use of ERDSs. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified8/1/16) California Association of Realtors California Mortgage Association California State Association of Counties County Recorders' Association of California Southwest California Legislative Council AB 2143 Page 5 OPPOSITION: (Verified8/1/16) None received ASSEMBLY FLOOR: 77-0, 5/23/16 AYES: Achadjian, Alejo, Travis Allen, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Arambula, Eggman, Patterson Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119 8/3/16 18:56:58 **** END ****