BILL ANALYSIS Ó AB 2881 Page 1 Date of Hearing: April 19, 2016 ASSEMBLY COMMITTEE ON JUDICIARY Mark Stone, Chair AB 2881 (Committee on Judiciary) - As Amended April 12, 2016 PROPOSED CONSENT SUBJECT: CIVIL LAW: OMNIBUS BILL KEY ISSUE: SHOULD A NUMBER OF SMALL BUT IMPORTANT TECHNICAL, CLARIFYING, AND MOSTLY NOn-SUBSTANTIVE CHANGES TO THE CIVIL LAW BE MADE TO VARIOUS SECTIONS OF THE CALIFORNIA CODES? SYNOPSIS This non-controversial bill is the Assembly Judiciary Committee's biennial omnibus civil law bill. The purpose of the omnibus bill is to increase the efficiency of the legislative process, conserve legislative resources, and eliminate the need to unnecessarily hear a number of technical, clarifying, or modest stand-alone bills that might otherwise have to be introduced and heard separately through the legislative process. This year's omnibus bill incorporates various proposals submitted by various groups seeking to make technical, clarifying, or other modest changes to civil law, including the State Controller's Office, the California Law Revision Commission, The Trust and Estates Section of the State Bar, AB 2881 Page 2 Western Manufactured Housing Communities Association, Deposition Reporters Association of California, and the California Newspaper Publishers Association. It is believed that most, if not all of these provisions are non-controversial. The omnibus bill has no opposition on file. SUMMARY: Makes various changes to the California codes as part of the Committee's civil law omnibus bill. Specifically, this bill: 1)Establishes public notice districts as the place for the publication of notice as provided, and repeals provisions regarding judicial districts, as provided. 2)Adds "mobilehome" to the notice provided by a hosting platform to occupants listing a residence for short-term rental on a hosting platform. 3)Requires the Controller to establish and maintain trial court revenue distribution guidelines. 4)Redefines a "capital asset" as property with an estimated life of one year or greater, other than inventory, for the purpose of trust planning. 5)Extends the sunset relating to non-certification of a court reporter's instant visual display of testimony or proceedings. 6)Clarifies the definition of "officer" in the California Public Records Act. AB 2881 Page 3 7)Makes other technical and conforming changes. EXISTING LAW: 1)Provides that where judicial districts in a county have been consolidated, or where the municipal and superior courts in a county have unified, the territory embraced within the respective prior component judicial districts shall be separate judicial districts for the purpose of publication within a judicial district. (Government Code Section 71042.5.) 2)Requires a county recorder to keep on file a map approved by the county surveyor establishing the boundaries of a judicial district, as provided, that shows the boundaries of all consolidated or unified districts and component districts as of the date of consolidation or unification. (Government Code Section 71042.6.) 3)Requires a hosting platform to provide a notice, as specified, to occupants listing a residence for short-term rental on a hosting platform. (Business and Professions Code Section 22592.) 4)Requires the Controller to establish, supervise, and as necessary revise a uniform accounting system, including a system of audit, to the end that all fines, penalties, forfeitures, and fees assessed by courts, and their collection and appropriate disbursement, shall be properly and uniformly accounted for. (Government Code Section 71380.) 5)Requires each installment or partial payment of a fine, AB 2881 Page 4 penalty, forfeiture or fee to be prorated among the state and local shares according to the uniform accounting system established by the State Controller, as provided. (Penal Code Section 1462.5.) 6)Defines "capital asset" as defined in Section 1221 of the Internal Revenue Code for purposes of allocations of receipts during the administration of a trust. (Probate Code Section 16350.) 7)Provides that the report of the official reporter, or official reporter pro tempore, of any court, duly appointed and sworn, when transcribed and certified as being a correct transcript of the testimony and proceedings in the case, is prima facie evidence of that testimony and proceedings. (Code of Civil Procedure Section 273.) 8)Provides that until January 1, 2017, the instant visual display of the testimony or proceedings, or both, shall not be certified and cannot be used, cited, distributed, or transcribed as the official certified transcript of the proceedings. Further provides that until January 1, 2017, the instant visual display of the testimony or proceedings, or both, shall not be cited or used in any way or at any time to rebut or contradict the official certified transcript of the proceedings as provided by the official reporter or official reporter pro tempore. (Ibid.) 9)Defines civil executive officers of the state, as provided. (Government Code Sections 1001.) FISCAL EFFECT: As currently in print this bill is keyed fiscal. AB 2881 Page 5 COMMENTS: This bill is the Assembly Judiciary Committee's biennial omnibus civil law bill. The purpose of the omnibus bill is intended to increase the efficiency of the legislative process, conserve legislative resources, and eliminate the need to unnecessarily hear a number of technical, clarifying, or modest stand-alone bills that might otherwise have to be introduced and heard separately through the legislative process. Although it appears that most-if not all of these provisions-are non-controversial, this analysis provides a brief review of most of this bill's provisions. Implements recommendations by the California Law Revision Commission involving the publication of certain legal notices. Under existing law, certain types of notices must be published in a "judicial district" - for example, a notice of a foreclosure sale, or a sale of stored property. Judicial districts were originally established for the business and elections of the courts of limited jurisdiction. However, due to court consolidation, these boundaries have largely become obsolete; and yet, current law still requires certain notices to be published in a judicial district. Additionally, the boundaries of these judicial districts are often difficult to find. Indeed, this Committee has learned that some jurisdictions no longer have these maps on hand, and parties who file the required notices must go to a private company to retrieve them in order to fully comply with the law. Accordingly, it seems safe to say that some notices may be published in the wrong location, raising questions about the legal validity of that notice. This bill implements the work of the Law Revision Commission which has painstakingly reviewed and retrieved historical judicial district maps, and has established new "public notice districts." Under this bill, the public notice districts are described by reference to cities and towns - hewing closely to areas of historical judicial districts. This bill, consistent with other Law Revision Commission-sponsored bills, maintains the Legislature's intent in establishing public notice districts for public notice purposes, minimizes disruption to the current practice, and AB 2881 Page 6 reduces any confusion for parties. Clarifies that "mobilehome" is part of the various residences included in a notice required by a hosting platform that facilitates the rental of residential units. SB 761 (Hall, Chap. 239, Stats. 2015) requires a hosting platform that facilitates the rental of residential units offered for tourist or transient use, as defined, to provide a notice to the occupant listing the residence. The notice specifies various residences (e.g. room, home, condominium, apartment) but inadvertently leaves out the term "mobilehome." This bill makes that update and statutory correction. Provides additional clarity to the distinct accounting roles performed by the Judicial Council and the State Controller over state trial courts. The Judicial Council and the State Controller have important and distinct roles in overseeing our trial courts. Generally, the Judicial Council oversees the trial courts' budgetary, fiscal, and accounting procedures, whereas the State Controller oversees trial court audits and provides guidelines on the distribution of trial court revenues, such as fines, fees, and penalties assessed by the courts. Currently, the Judicial Council consults with the State Controller to maintain appropriate regulations for recordkeeping and accounting by the courts. However, current law does not properly reflect the distinctive roles of the Judicial Council and the State Controller. This bill clears up the division of responsibilities between the Judicial Council and the State Controller by clarifying that the State Controller maintains trial court revenue distribution guidelines, and not accounting systems. Clarifies the definition of "capital asset" for the purpose of trust planning. Generally, the characterization of money paid into a trust (either income or principal) can determine who gets the benefit of the distribution for certain trusts: income goes AB 2881 Page 7 to the income- or life beneficiaries, while principal goes to the remainder beneficiaries. Current law establishes default rules to determine what is "income" and "principal." Currently, distributions from a business entity are considered income, unless an exception applies. One of these exceptions is the proceeds from the sale of a business entity's capital assets. In that instance, those distributions are considered principal. As it stands, the definition of capital asset restates the definition under federal tax law. However, the federal definition does not capture certain kinds of property used in a person's trade or business commonly distributed to trusts (e.g. proceeds from the sale of depreciable real property). This narrow definition has created confusion on what is considered income or principal, and is inconsistent with the intent of parties who create trusts. This bill updates this definition, and redefines a capital asset as property with an estimated life of one year or greater, other than inventory. Extends the sunset relating to non-certification of a court reporter's instant visual display of testimony or proceedings. AB 170 (Mendoza, Chap. 87, Stats. 2009) provides that a court reporter's instant visual display of testimony or proceedings (commonly known as "real-time reporting"), or both, may not be certified and cannot be used, cited, distributed, or transcribed as the official transcript of the proceedings. This provision of law will sunset on January 1, 2017. In order to allow the Legislature additional time to assess the technology of real-time reporting to ensure that it can provide access to justice, to a level similar to traditional court reporting services, this bill extends the sunset to 2022. Clarifies the definition of "officer" in the California Public Records Act. Under the California Public Records Act, any "state agency" is required to disclose public records unless it is subject to an exemption. Currently, a "state agency" is defined as any "state office, officer, department, division, bureau, board, and commission or other state body or agency," AB 2881 Page 8 excluding the legislature and the courts. However, the statute does not define "officer." While the meaning of "officer" would appear to have the same meaning of "executive officers" provided under Section 1001 of the Government Code, the law is unclear as to whether members of state commissions are "officers" for purposes of the CPRA. This bill makes that update and statutory correction. REGISTERED SUPPORT / OPPOSITION: Support California Law Revision Commission State Controller Betty Yee Western Manufactured Housing Communities Association The Trusts and Estates Section of the State Bar (TEXCOM) Deposition Reporters Association of California California Newspaper Publishers Association Opposition AB 2881 Page 9 None on file Analysis Prepared by:Eric Dang / JUD. / (916) 319-2334