BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
204 (Benoit)
Hearing Date: 4/27/09 Amended: 4/20/09
Consultant: Maureen Ortiz Policy Vote: B. F. & I. 11-0
_________________________________________________________________
____
BILL SUMMARY: SB 204 makes numerous changes to the Escrow Law
relating to annual fees, audit frequency, and license surrender,
and makes changes to the Residential Mortgage Lending Act
related to license surrender and branch office closures.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Additional exams ------ potentially less than $50
annually ------ Special*
* Corporations Fund
_________________________________________________________________
__
STAFF COMMENTS: According to the Department of Corporations, any
additional costs resulting from the mandatory indoctrination
examinations will be absorbable.
Existing law establishes an annual license fee of up to $2,800
for every licensed escrow agent, and additionally allows the
Commissioner of the Department of Corporations (DOC) to levy a
special assessment on each escrow agent of up to $500 for each
office or location if the costs of enforcing the Escrow Law
exceed annual fee revenue. Licensees are provided 30 days to
pay this special assessment. These fee provisions will sunset
January 1, 2010 whereby an alternate method of assessing annual
fees will replace the current structure. This alternate method
would require each licensee to pay a pro rata share of the
administrative costs of enforcing the Escrow Law.
SB 204 eliminates the sunset of January 1, 2010, thus retaining
the annual license fee of up to $2,800, increases the special
assessment from $500 to $1,000 and provides licensees up to 60
days to pay that assessment.
Prior to 1997, escrow agent license fees were levied on a pro
rata basis which was replaced at that time to a flat assessment
in order to reduce what had become a significant burden on small
licensees. That enabling legislation contained a sunset which
has been extended several times over the years. SB 204
eliminates the sunset to retain the current fee provisions.
Additionally, SB 204 requires, not authorizes as is current law,
that the DOC conduct a preliminary exam of any new licensee with
one year and an exam within two years, and extends the same
requirement to licensees that undergo a change in ownership.
SB 204 also makes several changes to the process for the
surrender of a license under the California Residential Mortgage
Lending Act.