BILL ANALYSIS
SB 1363
Page 1
SENATE THIRD READING
SB 1363 (Runner)
As Amended August 2, 2010
Majority vote
SENATE VOTE :33-0
BANKING & FINANCE 12-0 APPROPRIATIONS 17-0
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|Ayes:|Eng, Niello, Evans, Fong, |Ayes:|Fuentes, Conway, |
| |Fuentes, Gaines, Harkey, | |Bradford, |
| |Mendoza, Nava, Ruskin, | |Huffman, Coto, Davis, De |
| |Torres, Tran | |Leon, Gatto, Hall, |
| | | |Harkey, Miller, Nielsen, |
| | | |Norby, Skinner, Solorio, |
| | | |Torlakson, Torrico |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires new escrow licensees, escrow managers, or any
other person determined by the Commissioner of the Department of
Corporations (DOC) within 12 months of receiving their license,
to complete a course in escrow management conducted by DOC.
EXISTING LAW :
1)Regulates the business of escrow under the Escrow Law and
defines "escrow" as a transaction in which one person, for the
purpose of effecting the sale, transfer, encumbering, or
leasing of real or personal property to another person,
delivers any written instrument, money, evidence of title to
real or personal property to a third person to be held by that
third person until the happening of a specified event or the
performance of a prescribed condition, when it is then to be
delivered by that third person to a specified person.
[Financial Code Section 17000 et seq.]
2)Exempts a variety of entities from Escrow Law including
depository institutions; a person licensed to practice law in
California as specified; title insurance companies regulated
by the Department of Insurance; and, real estate brokers
performing in the course of, or incidental to a real estate
transaction in which the broker is an agent or a party to the
SB 1363
Page 2
transaction and is performing an act for which a real estate
license is required [Financial Code Section 17006.]
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)DOC estimates that it would incur significant annual costs
(more than $150,000, special funds) to offer the course. The
estimate includes rental expenses, staffing, publishing class
materials, tracking, and enforcement costs.
2)Authorizes DOC to charge a fee to cover costs.
COMMENTS : According to the author, the California escrow law is
among the most stringent in the nation for escrow agents. It is
vitally important that new licensees fully understand the
various requirements placed on them by the state's escrow law.
The Escrow Institute strongly asserts that the long term success
of a licensed escrow agent is enhanced by early efforts
undertaken by DOC to monitor and therefore insure that the new
licensee understands the rules and regulations required for
handling escrowed trusts funds.
Prior legislation : SB 204 (Benoit), Chapter 568, Statutes of
2009, caps the Escrow Law annual assessment at $2,800 and
removes the sunset requirement that had periodically required
this amount to be re-visited by the Legislature every four to
five years; streamlined the procedures for Escrow Law licensees
to surrender their licenses; and made changes intended to
increase the availability of fidelity bonds and errors and
omissions insurance for exchange facilitators. A provision in
SB 204 that was nearly identical to the
indoctrination/preliminary examination provisions of this bill
was amended out, due to opposition from the DOC.
Analysis Prepared by : Mark Farouk / B. & F. / (916) 319-3081
FN: 0005914