BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1363 (Runner)
          
          Hearing Date:  05/10/2010           Amended: 04/26/2010
          Consultant:  Maureen Ortiz      Policy Vote: BFI: 9-0
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          ____
          BILL SUMMARY:   SB 1363 requires specified officers, directors,  
          trustees, or employees of an escrow agent to complete a course  
          in escrow management.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
                                                                  
          Escrow course                       --------potentially less  
          than $500-----------           Special*
                                                                        
          offset by fee revenue
          *Corporations Fund
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          ____
          STAFF COMMENTS: According to the Department of Corporations  
          (DOC), a new course in escrow management will have to be  
          developed to be offered to all shareholders, officers,  
          directors, trustees, managers and employees of escrow agents.   
          The course will need to be offered at multiple times annually  
          and will be a requirement to all licensees or those who undergo  
          a change in ownership on or after January 1, 2011, and to all  
          employees who are hired on or after January 1, 2011.   The DOC  
          currently fingerprints approximately 6,000 individuals each year  
          - all of which will be required to take the new course.  The  
          cost estimate shown above includes facility rental expenses,  
          staffing, tracking individuals who receive the Escrow Agent  
          Fidelity Corporation's certificate, publishing class materials,  
          and enforcement costs.  SB 1363 authorizes the DOC to charge a  
          fee to cover costs.  In this instance, the fee would be about  
          $83 per individual.

          The Escrow Law requires each person licensed as an escrow agent  
          to participate as a member of Fidelity Corporation, a nonprofit  
          mutual benefit corporation that was established to indemnify its  
          members against loss.  Every shareholder, officer, director,  










          trustee, manager, or employee of an escrow agent is required to  
          obtain a Fidelity Corporation Certificate as a condition of  
          employment.  SB 1363 requires the following persons to complete  
          a course in escrow management conducted by the Department of  
          Corporations within 12 months of their receipt of a Fidelity  
          Corporation Certificate:

          a)  Any officer, director, trustee, or employee of an escrow  
          agent, whether or not compensated, who has access to money or  
          negotiable securities belonging to the escrow agent in the  
          regular discharge of his or her duties.
          b)  Any person who may draw checks upon the escrow agent or upon  
          the trust funds of the escrow agent in the regular discharge of  
          his or her duties.

          SB 1363 authorizes the Commissioner of Corporations to charge a  
          reasonable fee to cover the costs to administer the course.  The  
          Department of Corporations currently offers a course in escrow  
          management that is taken on a voluntary basis.  This bill will  
          require the course for all specified individuals.