BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1363|
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VETO
Bill No: SB 1363
Author: Runner (R)
Amended: 8/2/10
Vote: 21
SENATE BANKING, FINANCE, AND INS. COMMITTEE : 9-0, 4/21/10
AYES: Calderon, Cogdill, Correa, Florez, Kehoe, Lowenthal,
Padilla, Price, Runner
NO VOTE RECORDED: Cox, Liu
SENATE APPROPRIATIONS COMMITTEE : 9-0, 5/10/10
AYES: Kehoe, Cox, Alquist, Leno, Price, Walters, Wolk,
Wyland, Yee
NO VOTE RECORDED: Corbett, Denham
SENATE FLOOR : 33-0, 5/17/10 (Consent)
AYES: Aanestad, Alquist, Calderon, Cedillo, Cogdill,
Corbett, Correa, Cox, Denham, DeSaulnier, Ducheny,
Dutton, Florez, Hancock, Harman, Hollingsworth, Huff,
Kehoe, Leno, Liu, Lowenthal, Negrete McLeod, Padilla,
Pavley, Romero, Runner, Simitian, Steinberg, Strickland,
Walters, Wolk, Wyland, Yee
NO VOTE RECORDED: Ashburn, Oropeza, Price, Wiggins, Wright,
Vacancy, Vacancy
ASSEMBLY FLOOR : 77-0, 8/19/10 - See last page for vote
SENATE FLOOR : 34-0, 8/26/10 (Consent)
AYES: Aanestad, Alquist, Ashburn, Blakeslee, Calderon,
Cedillo, Cogdill, Corbett, Correa, DeSaulnier, Ducheny,
Dutton, Emmerson, Hancock, Harman, Hollingsworth, Huff,
Kehoe, Leno, Liu, Lowenthal, Negrete McLeod, Padilla,
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Pavley, Price, Romero, Runner, Simitian, Steinberg,
Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Denham, Florez, Oropeza, Strickland,
Wiggins, Vacancy
SUBJECT : Escrow agents
SOURCE : Escrow Institute of California
DIGEST : This bill requires an officer, director,
trustee, or escrow manager of an escrow agent who has
access to money or negotiable securities of the licensee
and certain other persons to complete a course in escrow
management conducted by the Commissioner of Corporations,
within 12 months following their receipt of a Fidelity
Corporation Certificate, as specified.
Assembly Amendments clarify that the bill applies to escrow
managers rather than any employee of an escrow agent, and
allow the Commissioner of Corporations to require course
completion of any other person as determined by the
Commissioner.
ANALYSIS : Existing law:
1.Regulates the business of escrow under the Escrow Law
(Financial Code Sections 17000 et seq.), but provides an
exemption from that law for a variety of different
entities (Financial Code Section 17006). Among the
entities exempt from regulation under the Escrow Law are
depository institutions; any person licensed to practice
law in California, as specified; title insurance
companies regulated by the Department of Insurance, and
real estate brokers performing acts in the course of, or
incidental to a real estate transaction, in which the
broker is an agent or a party to the transaction and is
performing an act for which a real estate license is
required.
2.Requires the Commissioner of Corporations (commissioner)
to conduct an examination of every escrow agent licensed
under the Escrow Law as often as he or she deems
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necessary and appropriate, but not less than once every
48 months.
3.Authorizes, but does not require, the commissioner to
conduct an indoctrination or preliminary examination, or
both, of any new licensee, within one year of issuing a
license to that licensee, and authorizes, but does not
require, an examination of a new licensee within two
years of license issuance.
4.Does not require Escrow Law licensees or their employees
to obtain pre-licensing or continuing education.
This bill:
1.Requires the following persons shall complete a course in
escrow management conducted by the commissioner within 1
year of their receipt of a Fidelity Corporation
Certificate:
A. Any officer, director, trustee, or escrow manager
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.
C. Any person as determined by the Commissioner.
2.Allows the Commissioner to charge a reasonable fee, as
determined by the commissioner, to cover the costs of
administering the course.
3.Specifies the bill applies to all licensees that become
newly licensed or who undergo a change in ownership on or
after January 1, 2011, and to all officers, directors,
trustees or employees who have access to money or
negotiable securities that belong to the escrow agent who
are hired on or after January 1, 2011.
4.Defines "change in ownership" as having occurred when a
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licensee is required to file a new application for
licensure, and that license application is approved by
the Commissioner.
Prior Legislation
SB 204 (Benoit), Chapter 568, Statutes of 2009, capped the
Escrow Law annual assessment at $2,800 and removed 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 Department
of Corporations.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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
SUPPORT : (Verified 8/19/10)
Escrow Institute of California (source)
California Escrow Association
Escrow Agency Fidelity Corporation
GOVERNOR'S VETO MESSAGE :
"I am returning Senate Bill 1363 without my
signature.
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This bill would require any employee of an escrow
agent who has access to money or negotiable
securities belonging to the escrow agent, or any
other person as determined by the Department of
Corporations (DOC), to complete a course in escrow
management conducted by DOC within 12 months of
receipt of a Fidelity Corporation Certificate.
It is unclear why the provisions of this bill would
only apply to new licensees and exempt all others.
In addition, DOC currently conducts an escrow
management course, which is available to escrow
companies at no cost, questioning the need to impose
this mandate altogether.
For these reasons I am unable to sign this bill."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, De La
Torre, De Leon, DeVore, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Gatto, Gilmore, Hagman, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller,
Monning, Nava, Nestande, Niello, Nielsen, Norby, V.
Manuel Perez, Portantino, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NO VOTE RECORDED: Davis, Hall, Vacancy
JA:nl 10/5/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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