BILL NUMBER: AB 578 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 3, 2003
AMENDED IN ASSEMBLY MAY 12, 2003
AMENDED IN ASSEMBLY MAY 5, 2003
AMENDED IN ASSEMBLY MAY 1, 2003
AMENDED IN ASSEMBLY APRIL 24, 2003
INTRODUCED BY Assembly Member Leno
FEBRUARY 18, 2003
An act to add Section 27362 to, to add Article 6 (commencing with
Section 27390) to Chapter 6 of Division 2 of Title 3 of, and to
repeal Sections 27279.4 and 27398 of, the Government Code, relating
to county recorders, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 578, as amended, Leno. County recorders: electronic
recording.
(1) Existing law generally specifies that the recorder of any
county may, in lieu of a written paper, accept for recording a
digitized image of a recordable instrument, subject to specified
conditions.
This bill would enact the Electronic Recording Delivery System Act
of 2003, to authorize a county recorder, upon approval by resolution
of the board of supervisors and system certification by the Attorney
General, to establish an electronic recording delivery system for
the delivery and recording of digitized electronic records , and
in specified cases, digital electronic records, affecting the
right, title, or interest in real property, subject to specified
conditions, including system certification, regulation, and oversight
by the Attorney General. It would authorize the Attorney General to
charge a fee directly to a vendor seeking approval of software and
other services as part of an electronic recording delivery system.
It would require an applicant seeking authorization to submit
documents electronically to obtain approval of the county recorder.
This bill would specify that an applicant approved to
submit documents electronically is liable for economic loss due to
negligence, fraud, or breach of duty in relation to an electronic
recording delivery system, as specified. It would authorize
the Attorney General or a district attorney or city prosecutor
to seek a civil penalty of up to $50,000 for each violation of
the provisions of the act enacted by the bill or its implementing
regulations and to seek specified civil remedies.
This bill would, until January 1, 2011, authorize up to
12 specified counties, subject to approval by
their respective boards of supervisors, to participate in an
electronic recording pilot project for the delivery and recording of
digital electronic records affecting the right, title, or
interest in real property , subject to specified criteria.
The
The Attorney General would be required to evaluate the
electronic recording delivery systems, including pilot projects
and report to both houses of the Legislature on or before June 30,
2007.
(2) Existing law authorizes the board of supervisors of any county
to provide for specified fees for the filing and indexing of
documents with the county recorder.
This bill would provide that a county establishing an electronic
recording delivery system shall pay for the direct cost of regulation
and oversight by the Attorney General and, to pay these costs,
authorize the county to impose a fee of up to $1 for each instrument
recorded, impose a fee upon any vendor seeking approval of software
and other services as part of an electronic recording delivery
system, and impose a fee upon any person seeking approval as an
authorized submitter of electronic records.
(3) Existing law requires the Attorney General to appoint an
Electronic Recordation Task Force, consisting of specified
representatives, to meet on a regular basis to address the technical,
legal, security, and economic issues associated with electronic
recordation, and recommendations on specified issues.
This bill would repeal this provision.
(4) This bill would authorize specified counties, subject to
approval of their respective boards of supervisors, to notify by mail
the party or parties executing deeds, quitclaim deeds, and deeds of
trust, to impose a fee for the cost of the notice, and to require, as
a condition of recording, that the document contain specified
information. It would require each county providing notification
pursuant to these provisions to report to the Legislature on or
before June 30, 2007, regarding the discovery of fraudulent deeds,
quitclaim deeds, and deeds of trust as a result of the notices.
(5) This bill would declare that it is to take effect
immediately as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 27279.4 of the Government Code is repealed.
SEC. 2. Section 27362 is added to the Government Code, to read:
27362. (a) A county establishing an electronic recording delivery
system under Article 6 (commencing with Section 27390) shall pay for
the direct cost of regulation and oversight by the Attorney General.
(b) The Attorney General may charge a fee directly to a vendor
seeking approval of software and other services as part of an
electronic recording delivery system. The fee shall not exceed
the reasonable costs of approving software or other services for
vendors.
(c) In order to pay costs under this section, a county may do any
of the following:
(1) Impose a fee of up to one dollar ($1) for each instrument that
is recorded by the county. This fee may, at the county's
discretion, be limited to instruments that are recorded pursuant to
the electronic recording delivery system.
(2) Impose a fee upon any vendor seeking approval of software and
other services as part of an electronic recording delivery system.
(3) Impose a fee upon any person seeking approval as an authorized
submitter.
(d) A fee assessed pursuant to this section may not exceed the
reasonable costs of providing the services for which the fee is
charged.
(d) The total fees assessed by a county recorder pursuant to this
section may not exceed the reasonable total costs of the electronic
recording delivery system, the review and approval of vendors and
authorized submitters, security testing as required by this article
and the regulations of the Attorney General, and reimbursement to the
Attorney General for regulation and oversight of the electronic
recording delivery system.
SEC. 3. Article 6 (commencing with Section 27390) is added to
Chapter 6 of Division 2 of Title 3 of the Government Code, to read:
Article 6. Electronic Recording Delivery System Act of 2003
27390. (a) This article shall be known and may be cited as the
Electronic Recording Delivery System Act of 2003.
(b) For purposes of this article, the following definitions shall
apply:
(1) "Authorized staff" representative"
means either of the following:
(A) Any employee, contractor, designee, or agent of an authorized
submitter to an electronic recording delivery system.
(B) Any employee, contractor, designee, or agent of a county
recorder who is entrusted with access to the electronic recording
delivery system.
(2) "Authorized submitter" means any of the following entities
that has complied with qualified pursuant to
this article, including Sections 27391 and 27392, and including
any regulations adopted pursuant to this article, and that has been
approved by, and contracted with, a county recorder to electronically
record documents:
(A) An entity, agency, branch, or instrumentality of local, state,
or federal government.
(B) A licensed title insurance A title
insurer or underwritten title company as defined in Section
12340.4 or 12340.5 of the Insurance Code.
(C) The Federal National Mortgage Association (Fannie Mae) or the
Federal Home Mortgage Association (Freddie Mac).
(D) An institutional lender as defined in subdivision (j) of
Section 5003 of the Financial Code.
(E) An escrow company subject to Chapter 2 (commencing with
Section 17200) of Division 6 of the Financial Code, if all of the
following apply:
(i) It has been audited regularly and no audit within the last
three years indicates any irregularity or violation.
(ii) It is a member in good standing of the Escrow Agents Fidelity
Corporation.
(iii) It has a license in good standing from the Department of
Corporations.
(F) Any additional submitter determined by a county recorder to be
eligible pursuant to Section 27391.
(C) An institutional lender, as defined in subdivision (j) of
Section 50003 of the Financial Code.
(3) "Computer security auditor" means accredited
computer security personnel, hired from either the public
or private sector, to perform an independent audit or review of the
electronic recording delivery system. The computer security auditor
shall be independent of the county and shall not be the same
contractor hired to establish or participate in that electronic
recording delivery system or in any other county's
electronic recording delivery system. delivery system.
(4) "Digital electronic record" means a record containing
information that is created, generated, sent, communicated, received,
or stored by electronic means, but not created in original paper
form.
(5) "Digitized electronic record" means a scanned image of the
original paper document.
(6) "Document" means an instrument or record that otherwise meets
the requirements of this article and affects the right or title to,
interest in, or possession of, real property.
(7) "Electronic" means relating to technology having electrical,
digital, magnetic, wireless, optical, electromagnetic, or similar
capabilities.
(8) "Electronic document" means a document that is created,
generated, sent, communicated, or received by electronic means.
(9) "Electronic recording delivery system" means a system to
deliver for recording, and for return to the party requesting
recording, digitized electronic records or, pursuant to
paragraph (3) of subdivision (a) of Section 27392 or Section 27398,
digital electronic records, affecting the right, title, or
interest in real property.
(10) "Electronic signature" means an electronic sound, symbol, or
process attached to or logically associated with an electronic record
and executed or adopted by a person with the intent to sign the
electronic record.
(11) "Security testing" means an independent computer security
audit, including, but not limited to, the use of computer security
auditors to attempt to penetrate an electronic recording delivery
system for the purpose of testing the security of that system.
Security testing, including penetration studies, shall be subject to
regulation by the Attorney General.
(12) "Source code" means a program or set of programs readable and
maintainable by humans, translated or interpreted into a form that
the electronic recording delivery system can execute.
(13) "System certification" means issuance of a confirmation
letter regarding a specific electronic recording delivery system by
the Attorney General. The system certification shall include any
agreements between the Attorney General as to the operation of the
electronic recording delivery system, including, but not limited to,
the frequency of computer security audits.
27391. Any applicant seeking authorization to submit documents
under this article shall obtain approval of the county recorder. The
county recorder shall have discretion to grant approval based upon
the requirements of this article and regulations adopted pursuant to
this article. A county recorder may not be held civilly liable
for denial of an application pursuant to this section. The
recorder shall be guided in the exercise of his or her discretion by
the following factors:
(a) Whether accepting electronically delivered records from the
person or entity is in the best interest of the county and the
public.
(b) Whether the person or entity requesting access to the program
for the purpose of electronically delivering documents has effective
security precautions in place to safeguard against potential fraud
and forgery of documents during the electronic delivery process.
(c) (1) Whether the person or entity requesting
access demonstrates the maintenance of sufficient financial ability
to indemnify losses for which it is responsible that might be
suffered by the county or members of the public.
(2) The recorder may in his or her sole discretion consider or
require net worth, maintenance of insurance or bonding, access to
indemnity or fidelity funds, other evidences of financial ability, or
any combination thereof.
(d) Whether the volume and quality of electronic records submitted
will be sufficient to warrant electronic delivery.
(e) Whether factors of cost, capacity, or security require the
limitation of the provision of access to persons requesting to
participate, based upon business reasons for recording documents,
scope of authority under a license, if any, and volume of documents
recorded in previous years.
(f) Whether the authorized submitter is legally authorized to
conduct business in this state.
(g) Whether a person applying under subparagraph (F) of paragraph
(2) of subdivision (b) of Section 27390 regularly recorded documents
in the county during the three-year period prior to the date of
application in sufficient numbers to demonstrate a business need to
record electronically. It is the intent of the Legislature that
county recorders consider approving authorized submitters under this
section after developing experience in the operation of an electronic
recording delivery system, including protection of security.
27392. (a) (1) Upon approval by resolution of the
board of supervisors and system certification by the Attorney
General, a county recorder may establish, in accordance with this
article, an electronic recording delivery system for the
delivery and recording of digitized electronic records affecting the
right, title, or interest in real property. system.
(2) Except as specified in paragraph (3) and in Section 27398, an
electronic recording delivery system shall be limited to the delivery
for recording of documents that are digitized electronic records.
Authorization for delivery of electronic documents under this article
may only be granted to an authorized submitter that is a title
insurer or underwritten title company or an entity, agency, branch,
or instrumentality of local, state, or federal government.
(3) An electronic recording delivery system may provide for the
delivery for recording of a digitized or digital electronic record,
or both, that is limited to an instrument of reconveyance, a
substitutions of trustee, or an assignment of a deeds of trust.
Authorization for delivery of electronic documents under this
paragraph may be given to any authorized submitter.
(b) Any system developed pursuant to this article shall provide
for proper offsite archival procedures in accordance with guidelines
developed pursuant to Section 12236.
(c) Any system developed pursuant to this article shall require a
governing contractual relationship between the recorder and each
authorized submitter that includes, but need not be limited to, the
following components:
(1) A requirement that the submitter comply with this article and
any implementing regulations.
(2) Provisions governing the identification and supervision of
authorized staff.
(3) Mutually agreed upon standards of operation of the electronic
recording delivery system.
(4) Permission by the authorized submitter for security
testing.
(5) A provision specifying that the agreement may be terminated
at any time. pursuant to this article.
(6) A requirement that all electronic documents originate and be
submitted from a location within the United States.
(7) A requirement that the authorized submitter and its authorized
representatives consent in writing to the jurisdiction of California
courts as to any alleged civil cause of action related to the
operation of any electronic recording delivery system. Nothing in
this paragraph is intended to affect a contract to submit a dispute
to arbitration.
(d) Notwithstanding Section 27203, a recorder may
shall refuse to enter an agreement with an
authorized submitter, or may shall
refuse to accept an electronically delivered document from an
authorized submitter whenever any either
of the following occur:
(1) The submitter or authorized staff has been convicted of a
felony or misdemeanor related to fraud or of a crime of moral
turpitude.
(1) An authorized submitter or an authorized representative with
secure access to an electronic recording delivery system has been
convicted of a felony or convicted of a misdemeanor related to theft,
fraud, or a crime of moral turpitude. This determination shall be
made pursuant to Section 27395. A county recorder may continue to
accept electronically delivered documents from an authorized
submitter if the authorized submitter documents that it has
terminated all access of the authorized representative to the
electronic recording delivery system.
(2) The recorder reasonably believes that the submitter or
authorized staff has engaged in improper conduct relating to the
recording of documents.
(3) The recorder reasonably believes that the submitter or
authorized staff has violated any provision of the contractual
agreement required by this article.
(e) The county recorder may terminate access to any electronic
recording delivery system, or any part of a system, or may terminate
access of any authorized submitter, or any authorized staff
representative , at any time he or she deems it
necessary to protect the public interest, to protect the integrity of
public records, to protect homeowners or real property owners from
financial harm, or in the event an authorized submitter or its agents
or employees violates any rules or regulations established by the
county recorder for maintenance of the system or any provision
of the contractual agreement required by this article . No
cause of action or liability against the county recorder or any
government agency shall arise from the decision of the county
recorder to terminate or deny access of any person to the electronic
recording delivery system , pursuant to the requirements of this
article .
27393. (a) To be eligible to establish an electronic recording
delivery system, a county or county recorder shall contract with, and
obtain a report from, a computer security auditor selected from a
list of computer security auditors approved by the Attorney General.
(b) The Attorney General shall approve computer security auditors
on the basis of significant experience in the evaluation and analysis
of Internet security design, the conduct of security testing
procedures, and specific experience performing Internet penetration
studies.
(c) The Attorney General shall complete the approval of security
auditors within 90 days of a request from a county recorder. The
list shall be a public record. The computer security auditor shall
conduct ongoing monitoring of the electronic recording delivery
system and issue periodic reports, with the frequency of monitoring
and reporting to be determined by regulation. The reports of the
computer security auditor shall include, but not be limited to, all
of the following considerations:
(1) Safety and security of the proposed system, including the
vulnerability of the electronic recordation system to fraud or
penetration.
(2) Results of testing of the system's protections against fraud
or intrusion, including security testing and penetration studies.
(3) Recommendations of any additional precautions or provisions
needed to ensure that the proposed system is as secure and protects
the integrity of the recorder's records.
(d) Upon completion, the reports and any response to any
recommendations shall be transmitted to the board of supervisors, the
county district attorney and the Attorney General. A county may not
begin an electronic recording delivery system until security
testing, as defined in paragraph (11) of subdivision (b) of Section
27390, has demonstrated that the system is secure and system
certification has occurred. The Attorney General shall not approve
any electronic recording delivery system, unless it fulfills the
requirements of this article and the regulations of the Attorney
General.
(e) An electronic recording delivery system shall be audited, at
least once during the first year of operation and periodically
thereafter, as set forth in regulation and in the system
certification, by a computer security auditor. The nature and scope
of the audit shall conform to this article and regulations adopted
pursuant to this article. Audit reports shall be submitted to the
Attorney General, the county district attorney, and the county
recorder. In conducting the audit, the primary role of the computer
security auditor shall be to protect the public interest and ensure
that electronic recording delivery systems are reliable and secure.
(f) A computer security auditor shall have access to any aspect of
an electronic recording delivery system, in any form requested.
Auditor access shall include, but not be limited to, permission for a
thorough examination of source code and the associated approved
escrow facility, and necessary authorization and assistance for a
penetration study of that system.
(g) If the county recorder, a computer security auditor, a
district attorney for a county participating in the electronic
recording delivery system, or the Attorney General reasonably
believes that an electronic recording delivery system is vulnerable
to fraud or intrusion, the county recorder, the board of supervisors,
the district attorney, and the Attorney General shall be immediately
notified. The county recorder shall immediately take the necessary
steps to guard against any compromise of the electronic recording
delivery system, including, if necessary, the suspension of the
electronic recording delivery system.
27394. (a) In lieu of the requirements set forth in Section
27321, after acceptance for recording, the county recorder shall
electronically transmit a copy of each recorded electronic document
accepted under this article to the authorized submitter. The
authorized submitter shall be responsible for mailing either by
United States Postal Service or electronically a copy of the recorded
electronic document to the address specified in the instructions for
mailing upon completion of recording.
(b) When a signature is required to be accompanied by a notary's
seal or stamp, that requirement is satisfied if the electronic
signature of the notary contains all of the following:
(1) The name of the notary.
(2) The words "Notary Public."
(3) The name of the county where the bond and oath of office of
the notary are filed.
(4) The sequential identification number assigned to the notary,
if any.
(5) The sequential identification number assigned to the
manufacturer or vendor of the notary's physical or electronic seal,
if any.
(c) In addition to, and notwithstanding Section 27361.5, a county
recorder, with approval by resolution of the board of supervisors,
may require, but need not be limited to, the following index
information on the first page or sheet of a digital or digitized
electronic document presented for recording:
(1) The parcel identifier number of the real estate.
(2) The address of the real estate, to the extent available.
(3) The name of the authorized submitter presenting the document
for recording.
(4) The name of the authorized requestor of a document for
recording.
(5) The marital, corporate, partnership, or other similar legal
status of a person who is a party to the document.
(6) The date of the document.
(7) The number of pages or sheets contained in the record,
including the first page or sheet.
(8) The transmittal information to identify the sender and provide
recording record information.
(9) If the document is a grant deed, quitclaim deed, or deed of
trust, evidence that the grantor has given informed consent to the
use of an electronic document.
27395. (a) (1) All individuals who are entrusted with access to
the electronic recording delivery system as authorized
staff, or a an authorized submitter, authorized
representative, or computer security auditor, shall submit two
8 by 8 fingerprint cards bearing the legible rolled and flat
impressions of their fingerprints together with a personal
description, prepared by a local public law enforcement agency, which
shall transmit the card to the Bureau of Criminal Identification and
Information in the Department of Justice. Positions subject to this
subdivision shall be determined by regulation and shall be set forth
in a county's system certification.
(2) The Attorney General may utilize an alternate system of
examining fingerprints if that system meets the same standard of
reliability and security set forth in this subdivision and is
approved and operated by the Department of Justice.
(3) The Department of Justice may forward one copy of the
applicant's fingerprint cards to the Federal Bureau of Investigation
for the purpose of obtaining any record of a previous
out-of-state conviction of an applicant.
(b) The Department of Justice shall ascertain whether an
individual applicant authorized staff or an individual applicant
individual applicant who is an authorized submitter,
an authorized representative, or a computer security auditor
has suffered a felony conviction or a misdemeanor conviction for
theft, fraud, or a crime of moral turpitude, including
whether the individual applicant has pending criminal
charges within the State of California. No individual applicant
classified as authorized staff or as a computer security auditor may
be employed in the security status of having access to the electronic
recording delivery system, if he or she has suffered a felony
conviction or misdemeanor conviction for theft, fraud, or crimes of
moral turpitude, nor may the applicant have pending criminal charges
of felony violations or allegations of misdemeanor charges for theft,
fraud, or crimes of moral turpitude, as detailed in the criminal
history information that is reviewed by the Department of Justice. A
plea or verdict of guilty or a finding of guilt by a court in a
trial without a jury for forfeiture of bail is deemed to be a
conviction within the meaning of this article, irrespective of a
subsequent order under the provisions of Section 1203.4 of the Penal
Code allowing the withdrawal of the plea of guilty and entering of a
plea of not guilty, or setting aside the verdict of guilty, or
dismissing the accusations or information. charges.
(c) The Department of Justice shall charge a fee sufficient to
cover the cost of processing the fingerprint submission and to cover
the cost of the Department of Justice maintaining and storing all
applicant records.
(d) (1) Once the Department of Justice has ascertained
the criminal history information of an applicant, it shall forward a
written notification of criminal convictions or pending criminal
charges, or both, to the division of the Office of the Attorney
General charged with oversight duties regarding this article.
(2) The Attorney General shall request subsequent arrest
notification service from the Department of Justice pursuant to
Section 11105.2 of the Penal Code for all persons subject to a
criminal records check pursuant to this section.
(e) The Attorney General shall deliver written notification of an
applicant's ineligibility for access to an electronic recording
delivery system to an applicant, his or her known employer, whether
it be a public or private employer, to the related authorized
submitter, and to the county recorder of the jurisdiction where the
applicant seeks access to an electronic recording delivery system.
27396. County recorders are encouraged to experiment with notices
to property owners to help them become aware of possible fraudulent
or erroneous recordings against their properties.
(f) No person applying to be, or who has previously been approved
as, an authorized submitter, an authorized representative, or a
computer security auditor may be employed in the security status of
having access to an electronic recording delivery system, if he or
she has suffered a felony conviction or misdemeanor conviction for
theft, fraud, or a crime of moral turpitude or if he or she has
pending criminal charges for any of these crimes, as detailed in the
criminal history reviewed by the Department of Justice.
(g) A plea of guilty or no contest, a verdict resulting in a
conviction, or the forfeiture of bail, shall be a conviction within
the meaning of this article, irrespective of a subsequent order under
the provisions of Section 1203.4 of the Penal Code, allowing the
withdrawal of a plea of guilty or no contest, and the entry of a plea
of not guilty, the setting aside of a verdict of guilty, or the
dismissal of accusations, whether by indictment or information.
27397. (a) The Attorney General shall, in consultation with the
County Recorders Association of California and the California
District Attorneys Association, adopt regulations establishing
standards for the review and approval of authorized submitters
and authorized representatives and the review and approval by
county recorders of systems and processes to conduct electronic
recording and providing for the regulatory oversight of electronic
recording delivery systems. Regulations shall be adopted pursuant to
the Administrative Procedures Act, Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3.
(b) No electronic recording delivery system may become operational
without the approval of the Attorney General pursuant to applicable
regulations adopted pursuant to this article.
(c) The regulations shall include general guidelines
relating to security, capacity, reliability, and uniformity, and
shall comply with Section 12168.7. The regulations shall establish
minimum standards to ensure that a county recorder has the capability
of identifying security problems that may make the system
susceptible to fraud or any attempt to tamper with official records,
and shall establish specific guidelines, including the approximate
frequency of security testing, and standards for security and
security testing.
(d) The regulations governing security shall require that each
electronic recording delivery system comply with all requirements
deemed by the Attorney General to be consistent with the public
interest in electronic recording delivery systems being as reliable
and secure as possible.
(e) The regulations shall also contain all of the following:
(1) A statement of a uniform definition of the term "source code"
consistent with this article and applicable to every electronic
recording delivery system throughout the state.
(2) The placement of an exact copy of each source code associated
with each approved electronic recording project in an approved escrow
facility prior to that system's first use.
(3) A requirement that any modification to a source code held in
escrow that is associated with an approved electronic recording
delivery system be approved by the Attorney General.
(4) An expression of standardized policies and procedures for the
establishment and operation of approved escrow facilities.
(5) Establishment of baseline technological and procedural
specifications for electronic recording delivery systems.
(f) Regulations may also provide for initial certification of
vendors offering software and other services to counties for
electronic recording delivery systems.
(g) The Attorney General shall monitor the security of electronic
recording delivery systems statewide, in close cooperation with
county recorders. In the event of an emergency involving multiple
fraudulent transactions linked to one county's use of an electronic
recording delivery system, the Attorney General may order the
suspension of electronic recording delivery systems in any county or
in multiple counties, if necessary to protect the security of the
system, for a period of up to seven calendar days.
(h) (1) The Attorney General or a district attorney may
bring an action in the name of the people of the State of California
seeking declaratory or injunctive relief, restitution, rescission,
disgorgement of profits, or other equitable relief
pertaining to any alleged violation of this article or regulations
adopted pursuant to this article.
(2) The Attorney General, a district attorney, or a city
prosecutor may seek a civil penalty of up to fifty thousand dollars
($50,000) for each violation of this article or its implementing
regulations. In assessing the amount of civil penalty, the court
shall consider all relevant circumstances, including, but not limited
to, the nature and seriousness of the misconduct, the number of
violations, the persistence of the misconduct, the length of time
over which the misconduct occurred, the willfulness of the defendant'
s misconduct, and the defendant's ability to pay.
(3) Nothing in this subdivision shall be construed to prevent the
Attorney General, a district attorney, or a city prosecutor from
seeking legal or equitable relief under any other provision of law.
(i) An electronic recording delivery system shall be subject to
local inspection and review by the Attorney General. The Attorney
General shall furnish a statement of any relevant findings associated
with a local inspection to the county recorder of the inspected
electronic recording delivery system , the district attorney,
and to all technology vendors associated with that system.
27397.5. (a) In addition to any other relief available pursuant
to this article, the Attorney General or a district attorney may seek
a civil penalty of up to fifty thousand dollars ($50,000) for each
violation of this article or its implementing regulations.
(b) In addition to any other civil liability provided under law,
all applicants approved by the recorder and authorized to submit
documents are liable for economic loss due to negligence, fraud, or
breach of fiduciary duty in relation to an electronic recording
delivery system or due to the failure to comply with this article,
with regulations adopted pursuant to this article, or with its
contract with the county recorder. Liability extends to acts or
omissions of authorized staff and any other agent or employee. This
liability shall lie notwithstanding any contrary waiver or disclaimer
in any title insurance policy, escrow instruction, or other document
pertaining to the real estate transaction associated with the loss.
27397.5. No right that a party may have to recover damages in
relation to an electronic recording delivery system may be waived or
disclaimed in any title insurance policy, escrow instruction, or
other document pertaining to the real estate transaction.
27398. (a) Subject to the approval of their respective boards of
supervisors, up to 12 counties the Counties
of Alameda, El Dorado, Fresno, Los Angeles, Orange, Placer,
Riverside, San Bernardino, San Mateo, Santa Clara, Tulare, and
Ventura may participate in an electronic recording pilot
project for the delivery and recording of digital electronic
records affecting the right, title, or interest in real property.
electronic records. Participation in a pilot project
shall be limited to an authorized submitter that is a title insurer
or underwritten title company, or an entity, agency, branch, or
instrumentality of local, state, or federal government.
(b) Except as set forth in this section, all of the
requirements contained in this article shall also apply to
an electronic recording pilot project implemented under this
section.
(c) The Attorney General may enact any additional regulations
necessary to ensure the security of a system based upon digital
electronic records, including regulations related to the acceptance
of a document containing an electronic signature or digital
notarization.
(d) The Attorney General shall conduct an evaluation of the pilot
projects and report to both houses of the Legislature on or before
June 30, 2007. The Legislature may, based on this evaluation,
consider whether the pilot project should be expanded or extended, or
limited or terminated.
(e)
(d) Subject to the requirements of this article, a pilot
project established under subdivision (a) that is in lawful operation
on June 30, 2007, may continue in operation until December 31, 2010.
(f)
(e) This section shall remain in effect only until January
1, 2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
27398.5. (a) Subject to approval of their respective boards of
supervisors, the Counties of Alameda, Contra Costa, El Dorado,
Fresno, Orange, Placer, Riverside, San Bernardino, San Mateo, Santa
Clara, Tulare, and Ventura may, within 30 days of recordation of a
deed, quitclaim deed, or deed of trust, notify by mail the party or
parties executing the document. The recorder may require, as a
condition of recording, that a deed, quitclaim deed, or deed of trust
indicate the assessor's identification number or numbers that fully
contain all, or a portion of, the real property described in the
legal description. If the description contains more than one
assessor's parcel, all assessor's parcels shall be indicated. The
form of the entry shall be substantially as follows:
Assessor's Identification Number __-__-__.
(b) This section shall not apply to the recordation of any
document where the federal government, or state, county, city, or any
subdivision of the state acquires title.
(c) The failure of the county recorder to provide the notice as
permitted by this section shall not result in any liability against
the recorder or the county.
(d) In addition to any other recording fee, the recorder may
collect a fee from the party filing a deed, quitclaim deed, or deed
of trust, other than a government entity, pursuant to subdivision
(a). The fee shall not exceed the cost of the notice, or four
dollars ($4), whichever is less.
(e) On or before June 30, 2007, each county providing notification
pursuant to subdivision (a) shall report to the Legislature
regarding the discovery of fraudulent deeds, quitclaim deeds, and
deeds of trust as a result of the notices.
27399. (a) Nothing in this article shall be
construed to authorize any public agency to intrude upon the autonomy
or business practices of the county recorders of the State of
California in any manner not specifically set forth in this article.
(b) If a district attorney or county counsel for a county
developing an electronic recording delivery system or the Attorney
General reasonably believes that a system operated pursuant to this
article has been compromised by fraud or intrusion, he or she shall
immediately take the necessary steps to alert the county recorder to
guard against any compromise of the system that may result in the
suspension of electronic recording.
27399.5. The authority granted in this article is in addition to
any other authority or obligation under California or federal law.
Nothing in this article shall be construed to repeal or affect
Section 27279, 27279.1, 27279.2, or 27279.3.
27279.3, 27297.6, or 27387.1.
27399.7. The Attorney General shall conduct an evaluation of
electronic recording delivery systems authorized by this article,
including the pilot projects authorized pursuant to Section 27398,
and report to both houses of the Legislature on or before June 30,
2007. The Legislature may, based on this evaluation, consider
whether the pilot projects should be expanded or extended, or limited
or terminated, and whether any amendments to this article are
warranted.
SEC. 4. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order that county recorders may alleviate fiscal constraints by
implementing electronic recording delivery systems at the earliest
possible time, it is necessary for this act to take effect
immediately.