BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 578
                                                                  Page  1

          Date of Hearing:   May 21, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                      AB 578 (Leno) - As Amended:  May 12, 2003 

          Policy Committee:                              Local  
          GovernmentVote:9-0

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes county recorders, upon approval by  
          resolution of their boards of supervisors and certification by  
          the Attorney General, to establish an electronic recording  
          delivery system for the delivery and recording of digitized  
          electronic records affecting the right, title, or interest in  
          real property, as long as there is a hard copy of the original  
          document.  

          In addition, the bill establishes a pilot project authorizing up  
          to 12 counties to implement an electronic recording delivery  
          system for the delivery and recording of digitized electronic  
          records where the original document is in electronic form.  The  
          Attorney General would be required to evaluate the pilot project  
          and report to the Legislature on or before June 30, 2007.

           FISCAL EFFECT  

          1)Counties would be authorized 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.

          2)Counties establishing an electronic an electronic recording  
            delivery system would be required to pay for the direct cost  
            of regulation and oversight by the Attorney General.

          3)The Attorney General would be authorized to charge a fee  
            directly to a vendor seeking approval of software and other  








                                                                  AB 578
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            services as part of an electronic recording delivery system.

          4)An applicant approved to submit documents electronically would  
            be liable for economic loss due to negligence, fraud, or  
            breach of duty.  The Attorney General and district attorneys  
            would be authorized to seek a civil penalty of up to $50,000  
            for each violation of the act.

           COMMENTS  

           Rationale  . This bill would extend currently successful pilots  
          programs allowing the electronic recordation of real estate  
          transactions, while ensuring that adequate safeguards to address  
          the potential for fraud are put into place.

           Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081