Bulletin: CO000015

Dear Associates:

The following is a summary of bills enacted by the 1996 Colorado Legislature and subsequently signed into law by Governor Romer which have some impact, either directly or indirectly, on the business of title insurance in Colorado. Unless otherwise noted, the effective date of each of these bills is July 1, 1996.

House Bill 96-1096 (Concerning the Power of an Interinsurance Exchange to Deal With Real Property in its Own Name)

This bill allows a reciprocal or interinsurance exchange to purchase, sell, and otherwise affect title to real estate in its own name, acting through a designated representative. The designated representative must be set forth in a recorded Affidavit of Authority. Please contact underwriting personnel if you have such a transaction.

Houston Bill 96-1369 (Concerning Property Records Required by law to be maintained in the office of the County Clerk and Recorder)

This bill clarifies race-notice language on the effects of unrecorded documents. Extends liability and penalties for filing fraudulent liens to recording liens and to documents that purport to convey, encumber, or otherwise affect title to real property. It eliminates provisions for fees on documents no longer filed. Provides for additional fees for recording instruments that require multiple entries in indices. It allows clerk and recorders, in lieu of allowing access to all books and records, to provide bulk copies of all documents recorded by annual subscription. It allows the recording of documents containing a facsimile signature. Changes the name of the ?general index? to the ?grantors index?, the ?general index inverted? to the ?grantee index?, and the ?receiving book? to the ?reception book?. It deems the documents to be recorded when accepted by the clerk and recorder for recording or filing and the fee has been paid. It requires the clerk and recorders to maintain files of subdivision plants and common interest community plats or maps and specifies how such plats or maps are entered in the indices. It expands the crime of abuse of public records to include the unauthorized alteration of a public record. Repeals obsolete provisions and makes other clarifying amendments.

Senate Bill 96-52 (Concerning the Development of a Form Declaring Real Property Transfer Information)

This bill requires the property tax administrator to develop a form for declaring real property transfer information. It eliminates the form for declaring real property transfer information created in the statutes. When this new form is developed we will let you know how and where it can be obtained.

Senate Bill 96-98 (Concerning the Central Indexing System, and making an Appropriation)

This Bill transfers the central indexing system board from the department of state to the department of personnel. Empowers the board to:

• Operate and improve the central filing system;
  
  
• Adopt rules;
  
  
• Enter into contracts for operating and improving the central indexing system;
  
  
• Hire and delegate disbursement responsibilities to employees;
  
  
• Bring suit;
  
  
• Cooperate with other organizations engaged in similar activities for the purpose of carrying on joint programs.
  
  
• Exempts certain filing and recordings from the existing one-dollar surcharge and authorizes the board to exempt as deemed appropriate.
  
  
• Requires all revenue collected by the board from the operation of the central indexing system to be credited to the central indexing system cash fund. Authorizes the board to allocate a portion of such revenues to governmental agencies that provide database information to the central indexing system for public access purposes. Requires appropriations of fund monies after July 1, 1996, to be only for purposes recommended by the board to the joint budget committee.
  
  
• Creates within the central indexing system cash fund a county clerk's technology fund. Requires $3 from financing statement filings made at the office of the Secretary of State to be credited to the fund, as well as any revenue in the central indexing system cash fund that is not otherwise used or allocated.
  
  
• Provides immunity for the state, the board, county clerks and recorders, the secretary of state, and the department of personnel for errors and omissions that are not the result of willful misconduct or bad faith.
  
  
• Repeals certain procedures concerning the confirmation of filing. Establishes procedures concerning the date and hour of electronic filings.
  
  
• Eliminates the requirement that records of tax lien sales on real estate and mobile homes be certified. Authorizes the treasurer to retain for safekeeping any certificate of purchase concerning the sale of real property for the payment of delinquent taxes.

All active UCC filings of record as of July 1, 1996 must be continued during the eighteen month period from July 1, 1996 to December 31, 1997. During the eighteen month transition period starting July 1, 1996 individuals and firms conducting UCC searches must add the Central Indexing System to the list of offices where searches must be conducted. Examples of scenarios involving UCC Continuations after July 1, 1996 are available through the Colorado state office.

We will keep you informed as further information regarding this new statute becomes available.

This memorandum is intended to provide general information on new statutes affecting title insurance in Colorado. As additional issues or questions arise regarding specific procedures to be followed in each case, please don't hesitate to contact Rand Zimmerman, Mike Cranmer or Bob Adams. We will be forwarding additional information and clarification as it becomes available.