Bill Text: CA AB2143 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: County recorder: electronic recording.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2016-09-16 - Chaptered by Secretary of State - Chapter 380, Statutes of 2016. [AB2143 Detail]

Download: California-2015-AB2143-Amended.html

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BILL NUMBER: AB 2143	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 12, 2016

INTRODUCED BY   Assembly Member Irwin

                        FEBRUARY 17, 2016

   An act to amend  Sections 27391, 27393, and 27397.5 of
  Section 27390 of, and to amend, repeal, and add
Sections 27391 and 27393 to,  the Government Code, relating to
electronic recording.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2143, as amended, Irwin. County recorder: electronic recording.

   The Electronic Recording Delivery Act of 2004 authorizes a county
recorder, upon approval by resolution of the board of supervisors and
system certification by the Attorney General, to establish an
electronic recording delivery system for the delivery for recording
of specified digitized electronic records, subject to specified
conditions. The act authorizes a county recorder to enter into a
contract with specified entities for the delivery for recording, and
return to the party requesting recording a digitized electronic
record that is an instrument affecting a right, title, or interest in
real property.  The act also authorizes a county recorder to
contract with the specified entities or their authorized agents to
be an authorized submitter of a digital or digitized electronic
record that is an instrument of reconveyance, substitution of
trustee, or assignment of deed of trust.  
    The bill 
    This bill, until January 1, 2027,  would authorize a
county recorder to also enter into a contract with an authorized
submitter for the delivery for recording, and return to the party
requesting recording, of a digital or digitized electronic record
that is an instrument to be recorded consistent with a specified
 provision, or for the submission of a digital or digitized
electronic record.   provision.  The  bill
  bill, until January 1, 2027,  would require an
authorized submitter, as specified, and any agent submitting
documents on behalf of an authorized submitter, to provide proof of
financial responsibility in the form of general liability coverage,
as provided.
   Existing law requires the Attorney General, in consultation with
interested parties, to adopt regulations for the review, approval,
and oversight of electronic recording delivery systems. Existing law
authorizes the regulations to include specified requirements and
procedures.
   This  bill   bill, until January 1, 2027,
 would additionally authorize the regulations to include
requirements for general liability coverage as described above.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 27390 of the  
Government Code   is amended to read: 
   27390.  (a) This article shall be known and may be cited as the
Electronic Recording Delivery Act of 2004.
   (b) For the purposes of this article, the following definitions
shall apply:
   (1) "Authorized submitter" means a party that has entered into a
contract with a county recorder pursuant to  subdivision (b)
of  Section 27391 and is not disqualified pursuant to
Section 27395.
   (2) "Computer security auditor" means computer security personnel
hired to perform an independent audit of the electronic recording
delivery system. The computer security auditor shall be independent
of the county recorder and the authorized submitter and shall not be
the same contractor hired to establish or participate in a county's
electronic recording delivery system or in the authorized submitter's
portion of that system.
   (3) "Digital electronic record" means a record containing
information that is created, generated, sent, communicated, received,
or stored by electronic means, but not created in original paper
form.
   (4) "Digitized electronic record" means a scanned image of the
original paper document.
   (5) "Electronic recording delivery system" means a system to
deliver for recording, and to return to the party requesting
recording, digitized or digital electronic records.
   (6) "Security testing" means an independent security audit by a
computer security auditor, including, but not limited to, attempts to
penetrate an electronic recording delivery system for the purpose of
testing the security of that system.
   (7) "Source code" means a program or set of programs, readable and
maintainable by humans, translated or interpreted into a form that
the electronic recording delivery system can execute.
   (8) "System certification" means the issuance of a confirmation
letter regarding a county's electronic recording delivery system by
the Attorney General.
   SECTION 1.   SEC. 2.   Section 27391 of
the Government Code is amended to read:
   27391.  (a) Upon approval by resolution of the board of
supervisors and system certification by the Attorney General, a
county recorder may establish an electronic recording delivery
system.
   (b) Upon system certification, a county recorder may enter into a
contract with a title  insurer,   insurer 
as defined in Section 12340.4 of the Insurance Code, underwritten
title  company,   company  as defined in
Section 12340.5 of the Insurance Code, institutional  lender,
  lender  as defined in paragraph (1), (2), or (4)
of subdivision (j) of Section 50003 of the Financial Code, or an
entity of local, state, or federal government for the delivery for
recording, and return to the party requesting recording, of a digital
or digitized electronic record that is an instrument to be recorded
consistent with subdivision (a) of Section 27201. The contract may
provide for the delivery of documents by an agent. However, the agent
shall not be a vendor of electronic recording delivery systems.
   (c) (1) A county recorder may enter into a contract with an
authorized submitter not authorized pursuant to subdivision (b) for
the delivery for recording, and return to the party requesting
recording, of a digital or digitized electronic record that is an
instrument to be recorded consistent with subdivision (a) of Section
27201. The contract may provide for the delivery of documents by an
agent. However, the agent shall not be a vendor of electronic
recording delivery systems.
   (2) An authorized submitter authorized pursuant to this
subdivision and any agent submitting documents on behalf of an
authorized submitter pursuant to this subdivision shall provide proof
of financial responsibility by providing a certificate of insurance
evidencing an amount of general liability coverage of at least one
million dollars ($1,000,000).
   (d) A county recorder may refuse to enter into a contract with any
party or may terminate or suspend access to a system for any good
faith reason, including, but not limited to, a determination by the
county recorder that termination or suspension is necessary to
protect the public interest, to protect the integrity of public
records, or to protect homeowners from financial harm, or if the
volume or quality of instruments submitted by the requester is not
sufficient to warrant electronic recordation. A county recorder may
also terminate or suspend access to a system if a party commits a
substantive breach of the contract, the requirements of this article,
or the regulations adopted pursuant to this article.
   (e) Notwithstanding Section 27321, a county recorder may require a
party electronically submitting records to mail a copy of the
recorded electronic document to the address specified in the
instructions for mailing upon completion of recording.
   (f) When a signature is required to be accompanied by a notary's
seal or stamp, that requirement is satisfied if the electronic
signature of the notary contains all of the following:
   (1) The name of the notary.
   (2) The words "Notary Public."
   (3) The name of the county where the bond and oath of office of
the notary are filed.
   (4) The sequential identification number assigned to the notary,
if any.
   (5) The sequential identification number assigned to the
manufacturer or vendor of the notary's physical or electronic seal,
if any. 
   (g) This section shall remain in effect only until January 1,
2027, and as of that date is repealed. 
   SEC. 3.    Section 27391 is added to the  
Government Code   , to read:  
   27391.  (a) Upon approval by resolution of the board of
supervisors and system certification by the Attorney General, a
county recorder may establish an electronic recording delivery
system.
   (b) Upon system certification, a county recorder may enter into a
contract with a title insurer as defined in Section 12340.4 of the
Insurance Code, underwritten title company as defined in Section
12340.5 of the Insurance Code institutional lender, as defined in
paragraph (1), (2), or (4) of subdivision (j) of Section 50003 of the
Financial Code, or an entity of local, state, or federal government
for the delivery for recording, and return to the party requesting
recording, of a digitized electronic record that is an instrument
affecting a right, title, or interest in real property. The contract
may provide for the delivery of documents by an agent. However, the
agent shall not be a vendor of electronic recording delivery systems.

   (c) A county recorder may refuse to enter into a contract with any
party or may terminate or suspend access to a system for any good
faith reason, including, but not limited to, a determination by the
county recorder that termination or suspension is necessary to
protect the public interest, to protect the integrity of public
records, or to protect homeowners from financial harm, or if the
volume or quality of instruments submitted by the requester is not
sufficient to warrant electronic recordation. A county recorder may
also terminate or suspend access to a system if a party commits a
substantive breach of the contract, the requirements of this article,
or the regulations adopted pursuant to this article.
   (d) Notwithstanding Section 27321, a county recorder may require a
party electronically submitting records to mail a copy of the
recorded electronic document to the address specified in the
instructions for mailing upon completion of recording.
   (e) When a signature is required to be accompanied by a notary's
seal or stamp, that requirement is satisfied if the electronic
signature of the notary contains all of the following:
   (1) The name of the notary.
   (2) The words "Notary Public."
   (3) The name of the county where the bond and oath of office of
the notary are filed.
   (4) The sequential identification number assigned to the notary,
if any.
   (5) The sequential identification number assigned to the
manufacturer or vendor of the notary's physical or electronic seal,
if any.
   (f) The section shall become operative on January 1, 2027. 
   SEC. 2.   SEC. 4.   Section 27393 of the
Government Code is amended to read:
   27393.  (a) The Attorney General shall, in consultation with
interested parties, adopt regulations for the review, approval, and
oversight of electronic recording delivery systems. Regulations shall
be adopted pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3). The
regulations shall comply with Section 12168.7.
   (b) The regulations adopted pursuant to subdivision (a) may
include, but need not be limited to, all of the following:
   (1) Establishment of baseline technological and procedural
specifications for electronic recording delivery systems.
   (2) Requirements for security, capacity, reliability, and
uniformity.
   (3) Requirements as to the nature and frequency of computer
security audits.
   (4) A statement of a detailed and uniform definition of the term
"source code" consistent with paragraph (7) of subdivision (b) of
Section 27390, and as used in this article, and applicable to each
county's electronic recording delivery system.
   (5) Requirements for placement of a copy of the operating system,
source code, compilers, and all related software associated with each
county's electronic recording delivery system in an approved escrow
facility prior to that system's first use.
   (6) Requirements to ensure that substantive modifications to an
operating system, compilers, related software, or source code are
approved by the Attorney General.
   (7) Procedures for initial certification of vendors offering
software and other services to counties for electronic recording
delivery systems.
   (8) Requirements for system certification and for oversight of
approved systems.
   (9) Requirements for general liability coverage required by
subdivision (c) of Section 27391.
   (10) Requirements for fingerprinting and criminal records checks
required by Section 27395, including a list of employment positions
or classifications subject to criminal records checks under
subdivision (f) of that section.
   (11) Requirements for uniform index information that shall be
included in every digitized or digital electronic record.
   (12) Requirements for protecting proprietary information accessed
pursuant to subdivision (e) of Section 27394 from public disclosure.
   (13) Requirements for certification under Section 27397.5.
   (c) The Attorney General may promulgate any other regulations
necessary to fulfill his or her obligations under this article.
   (d) An electronic recording delivery system shall be subject to
local inspection and review by the Attorney General. The Attorney
General shall furnish a statement of any relevant findings associated
with a local inspection of an electronic recording delivery system,
to the county recorder and the district attorney of the affected
county, and to all technology vendors associated with that system.

   (e) This section shall remain in effect only until January 1,
2027, and as of that date is repealed. 
   SEC. 5.    Section 27393 is added to the  
Government Code   , to read:  
   27393.  (a) The Attorney General shall, in consultation with
interested parties, adopt regulations for the review, approval, and
oversight of electronic recording delivery systems. Regulations shall
be adopted pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3). The
regulations shall comply with Section 12168.7.
   (b) The regulations adopted pursuant to subdivision (a) may
include, but need not be limited to, all of the following:
   (1) Establishment of baseline technological and procedural
specifications for electronic recording delivery systems.
   (2) Requirements for security, capacity, reliability, and
uniformity.
   (3) Requirements as to the nature and frequency of computer
security audits.
   (4) A statement of a detailed and uniform definition of the term
"source code" consistent with paragraph (7) of subdivision (b) of
Section 27390, and as used in this article, and applicable to each
county's electronic recording delivery system.
   (5) Requirements for placement of a copy of the operating system,
source code, compilers, and all related software associated with each
county's electronic recording delivery system in an approved escrow
facility prior to that system's first use.
   (6) Requirements to ensure that substantive modifications to an
operating system, compilers, related software, or source code are
approved by the Attorney General.
   (7) Procedures for initial certification of vendors offering
software and other services to counties for electronic recording
delivery systems.
   (8) Requirements for system certification and for oversight of
approved systems.
   (9) Requirements for fingerprinting and criminal records checks
required by Section 27395, including a list of employment positions
or classifications subject to criminal records checks under
subdivision (f) of that section.
   (10) Requirements for uniform index information that shall be
included in every digitized or digital electronic record.
   (11) Requirements for protecting proprietary information accessed
pursuant to subdivision (e) of Section 27394 from public disclosure.
   (12) Requirements for certification under Section 27397.5.
   (c) The Attorney General may promulgate any other regulations
necessary to fulfill his or her obligations under this article.
   (d) An electronic recording delivery system shall be subject to
local inspection and review by the Attorney General. The Attorney
General shall furnish a statement of any relevant findings associated
with a local inspection of an electronic recording delivery system,
to the county recorder and the district attorney of the affected
county, and to all technology vendors associated with that system.
   (e) This section shall become operative on January 1, 2027. 

  SEC. 3.    Section 27397.5 of the Government Code
is amended to read:
   27397.5.  (a) A county recorder may include in the county's
electronic recording delivery system a secure method for accepting
for recording a digital or digitized electronic record.
   (b) A county recorder may contract with an authorized submitter or
their authorized agents, to be an authorized submitter of the
documents specified in subdivision (a).
   (c) With respect to the electronic submission of the records
described in subdivision (a), the requirements that an authorized
submitter be subject to a security audit under Section 27394 and a
criminal records check under Section 27395 shall not apply where the
certification requirements of subdivision (d) have been met.
   (d) (1) In order for subdivision (c) to apply, the county recorder
and the Attorney General shall certify that the method of submission
allowed under the system will not permit an authorized submitter or
its employees and agents, or any third party, to modify, manipulate,
insert, or delete information in the public record, maintained by the
county recorder, or information in electronic records submitted
pursuant to subdivision (b) of Section 27391.
   (2) Certification under this section may be withdrawn by either
the county recorder or the Attorney General at any time either
determines that the requirements of this subdivision are not met.
   (e) For purposes of this section, an agent of an authorized
submitter shall not include a vendor of electronic recording delivery
systems.