HBA-DMD C.S.H.B. 2262 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2262 By: Ramsay County Affairs 3/29/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE With the rapid development of electronic technology in the transfer of information, states are beginning to adopt electronic recording statutes for the filing and recording of documents and instruments in the public record. C.S.H.B. 2262 requires the Texas State Library and Archives Commission (commission) to adopt rules authorizing county clerks to accept instruments by electronic filing and to record the instruments electronically. This bill specifies persons who are authorized to file documents electronically with a county clerk. This bill also prohibits a county clerk from assessing an additional fee for the electronic filing. C.S.H.B. 2262 creates the Electronic Recording Advisory Committee to recommend initial rules for adoption by the commission. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas State Library and Archives Commission in SECTION 2 (Section 195.002, Local Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 191, Local Government Code, by adding Section 191.009, as follows: Sec. 191.009. ELECTRONIC FILING AND RECORDING. (a) Authorizes a county clerk to accept instruments by electronic filing and to record the instruments electronically if the filing or recording complies with the rules adopted by the Texas State Library and Archives Commission (commission) under Chapter 195. (b) Provides that an instrument that is filed electronically in compliance with the rules adopted under Chapter 195 is considered to have been filed in compliance with any law relating to the filing of instruments with a county clerk. SECTION 2. Amends Subtitle B, Title 6, Local Government Code, by adding Chapter 195, as follows: CHAPTER 195. ELECTRONIC FILING OF RECORDS WITH AND RECORDING BY COUNTY CLERK Sec. 195.001. DEFINITIONS. Defines "commission" and "director and librarian." Sec. 195.002. ADOPTION OF RULES. (a) Requires the commission to adopt rules by which a county clerk is authorized to accept instruments by electronic filing and to record instruments electronically under Section 191.009. (b) Provides guidelines for the rules. (c) Provides that rules adopted by the commission under this section permitting the use of digital signatures in the electronic filing of instruments with the county clerk must be, to the extent practicable, consistent with rules governing digital signatures adopted by the Department of Information Resources under Section 2054.060 (Digital Signature), Government Code. (d) Requires the commission, before adopting or amending a rule under this section, to consider the recommendations of the Electronic Recording Advisory Committee (committee) established under Section 195.008. Sec. 195.003. PERSONS AUTHORIZED TO FILE ELECTRONICALLY. Specifies persons who are authorized to file documents electronically for recording with a county clerk who accepts electronic filing and recording under this chapter. Sec. 195.004. NOTICE OF CONFIRMATION. (a) Requires a county clerk who accepts electronic filing and recording under this chapter to confirm or reject an electronic filing of an instrument no later than the first business day after the date an instrument is filed. Provides that notice under this section must be made by electronic means if possible, or if that is impossible, by telephone or electronic facsimile machine. (b) Provides that if the county clerk fails to provide notice of rejection within the time provided by Subsection (a), the instrument is considered accepted for filing and prohibited from subsequently being rejected. Sec. 195.005. TIME INSTRUMENT CONSIDERED FILED OR RECORDED. Provides that an instrument that is recorded electronically under this chapter is considered to be recorded in compliance with a law relating to the recording of instruments as of the county clerk's business day on which the instrument is filed electronically. Provides that an instrument filed electronically under this chapter must be recorded as timely as an instrument filed by any other means. Sec. 195.006. ADDITIONAL FEE PROHIBITED. Provides that the fee to file or record an instrument electronically under this chapter is the same as the fee for filing or recording the instrument by other means, and a county clerk is prohibited from charging an additional fee for filing or recording an instrument electronically under this chapter. Sec. 195.007. ACCESS TO INSTRUMENT RECORDED ELECTRONICALLY. (a) Provides that an instrument filed or recorded electronically must be available for public inspection in the same manner and at the same time as an instrument filed or recorded by other means. (b) Requires the county clerk to provide a requestor, as defined by Section 552.003 (Definitions), Government Code, of an instrument filed or recorded electronically under this chapter with electronic copies of the instrument in a form that is capable of being processed by the use of technology that is generally available and nonproprietary in nature. Requires the county clerk to provide the copies to the requestor at the cost of producing the copies in accordance with Section 552.262 (Rules of the General Services Commission), Government Code. Sec. 195.008. ELECTRONIC RECORDING ADVISORY COMMITTEE. (a) Requires the committee to be appointed as required by this section in order to recommend to the commission initial and subsequent rules to be adopted under this chapter. (b) Specifies the composition of the committee. (c) Provides that a member of the committee serves a term of two years that expires on August 31 of each odd-numbered year. (d) Provides that a vacancy in the membership of the committee is filled in the same manner as the initial appointment and is for the remainder of the unexpired term. (e) Provides that a meeting of the committee is at the call of the presiding officer and is subject to Chapter 551 (Open Meetings), Government Code. (f) Provides that a member of the committee is not entitled to compensation or reimbursement of expenses from the commission for serving on the committee. Entitles a member of the committee who is an employee or officer of a state agency to compensation and reimbursement of expenses for service on the committee as determined by the state agency of which the member is an officer or employee. Sets forth that Chapter 2110 (State Agency Advisory Committees), Government Code, does not apply to the committee. SECTION 3. (a) Requires the entities entitled to make appointments to the committee established under Section 195.008, to make the appointments no later than November 1, 1999. Sets forth that the terms of the initial members of the committee expire August 31, 2001. (b) Requires the committee to make its recommendations for the initial adoption of rules under Chapter 195, as added by this Act, no later than September 1, 2000. (c) Requires the commission to adopt rules to implement Chapter 195, no later than January 1, 2001. (d) Requires the committee, no later than December 31, 2000, to make written recommendations on statutory changes necessary to allow for digital signatures on real estate transactions and the electronic filing and recording of instruments executed by digital signature. Requires the committee to send the recommendations to the lieutenant governor, the speaker of the house of representatives, and the commission. SECTION 4.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2622 differs from the original bill in SECTION 2 (proposed Sections 195.003 and 195.008, Local Government Code) by modifying the list of persons who are authorized to file documents electronically for recording with a county clerk and by modifying the composition of the Electronic Recording Advisory Committee.