Bill Text: CA SB1223 | 2009-2010 | Regular Session | Enrolled

California Senate Bill 1223 (Prior Session Legislation)

Bill Title: Escrow agents.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-09-30 - In Senate. To unfinished business. (Veto) [SB1223 Detail]

Download: California-2009-SB1223-Enrolled.html

BILL NUMBER: SB 1223	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 19, 2010
	PASSED THE ASSEMBLY  AUGUST 12, 2010
	AMENDED IN ASSEMBLY  MAY 27, 2010
	AMENDED IN ASSEMBLY  MAY 25, 2010
	AMENDED IN SENATE  APRIL 8, 2010
	AMENDED IN SENATE  MARCH 22, 2010

INTRODUCED BY   Senator Calderon

                        FEBRUARY 18, 2010

   An act to add Sections 17202.2 and 17412 to the Financial Code,
relating to escrow agents.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1223, Calderon. Escrow agents.
   Existing law, the Escrow Law, provides for the licensure and
regulation by the Commissioner of Corporations of persons engaged in
business as escrow agents, unless specifically exempted from
licensure. Under the Escrow Law, a "licensee" is defined as any
person holding a valid, unrevoked license as an escrow agent, and an
"escrow agent" is defined as any person engaged in the business of
receiving escrows for deposit or delivery. A willful violation of the
Escrow Law constitutes a crime.
   This bill would require a licensed escrow agent and any person
acting as an escrow agent who is exempt from licensure under the
Escrow Law to return or cause to be returned to the bidder all
deposits and fees received from that bidder in connection with an
auction sale of real property that has been the subject of a
foreclosure sale, upon receipt of escrow instructions from the bidder
and auctioneer or auction company directing the return of all funds
placed on deposit by the bidder with that agent or person, except as
specified.
   Existing law requires each person licensed under the Escrow Law to
establish a bond with the commissioner and to participate as a
member of Fidelity Corporation, a nonprofit mutual benefit
corporation, established to indemnify its members against loss.
   This bill would require the surety or sureties of a bond
established by an escrow agent to give notice to the commissioner and
to Fidelity Corporation of any release, substitution, cancellation,
withdrawal, or nonrenewal of a bond.
   Because a willful violation of these provisions would constitute a
crime, this bill would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


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

  SECTION 1.  Section 17202.2 is added to the Financial Code, to
read:
   17202.2.  Notwithstanding any other provision of law, the surety
or sureties for any bond described in Section 17203 shall give notice
to the commissioner and to Fidelity Corporation of any release,
substitution, cancellation, withdrawal, or nonrenewal of a bond
obtained pursuant to Section 17202.
  SEC. 2.  Section 17412 is added to the Financial Code, to read:
   17412.  (a) An escrow agent shall return to the bidder or cause to
be returned to the bidder all deposits and fees received from that
bidder in connection with an auction sale of real property that has
been the subject of a foreclosure sale, upon receipt of escrow
instructions from the bidder and auctioneer or auction company
directing the return of all funds placed on deposit by the bidder
with that agent. An escrow agent may recognize an auctioneer or
auction company as the agent of the property seller for this purpose.

   (b) This section shall apply to persons required to be licensed
under this division and to those persons exempt from licensure under
this division pursuant to Section 17006.
   (c) This section shall not apply to any of the following:
   (1) A sale of real property pursuant to a nonjudicial foreclosure
governed by Article 1 (commencing with Section 2920) of Chapter 2 of
Title 14 of Part 4 of Division 3 of the Civil Code.
   (2) A sale of real property pursuant to a judicial foreclosure
governed by Article 6 (commencing with Section 701.510) of Chapter 3
of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure.
   (3) A sale conducted pursuant to Section 9604 of the Commercial
Code, if an obligation secured by a security interest in personal
property or fixtures is also secured by an interest or an estate in
real property.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.