HOUSE BILL 254
51st legislature - STATE OF NEW MEXICO - first session, 2013
INTRODUCED BY
Zachary J. Cook
AN ACT
RELATING TO ESCROW COMPANIES; AMENDING THE ESCROW COMPANY ACT; DELETING EXCEPTIONS FOR BONDS; REQUIRING AUDIT REPORTS, ACCOUNT STATEMENTS AND REPORTS OF CONDITION; PROVIDING FOR AN EXCEPTION TO THE INSPECTION OF PUBLIC RECORDS ACT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 58-22-1 NMSA 1978 (being Laws 1983, Chapter 135, Section 1) is amended to read:
"58-22-1. SHORT TITLE.--[This act] Chapter 58, Article 22 NMSA 1978 may be cited as the "Escrow Company Act"."
SECTION 2. Section 58-22-9 NMSA 1978 (being Laws 1983, Chapter 135, Section 9) is amended to read:
"58-22-9. ANNUAL RENEWAL OF LICENSE--AUDIT REPORT.--
A. Each licensee shall renew its license for each of its offices annually by filing an application for renewal with the director on or before June 1 of each year, accompanied by the appropriate fees. The application for renewal shall be on such form and shall contain such information as the director by regulation shall prescribe [which] that shall establish that the licensee has continued to maintain necessary qualifications as an escrow agent. If [such] the application for renewal is timely and properly filed and the necessary qualifications are being maintained, the renewal of the license shall be effective on July 1 following the filing of the application and shall be evidenced by an appropriate license issued as of that date.
B. A licensee that manages three hundred or more escrow accounts at the time of application for a license renewal shall, at its own expense, submit with its license renewal application a full audit report for the prior calendar year performed and signed by an independent certified public accountant."
SECTION 3. Section 58-22-10 NMSA 1978 (being Laws 1983, Chapter 135, Section 10, as amended) is amended to read:
"58-22-10. CASH OR SURETY BOND OR EMPLOYEE DISHONESTY BOND REQUIRED.--
A. All employees of an escrow company and all other persons who have access to money or negotiable securities held in trust by the escrow company or in the possession of the escrow company in the regular discharge of their duties or persons who draw checks upon the escrow company or upon the trust funds of the escrow company in the regular discharge of their duties, before entering upon their duties and throughout the entire term of their office and employment and any subsequent term thereof, shall be covered by an employee dishonesty bond insuring the escrow company against loss of money or negotiable securities. The minimum amount of the bond shall be one hundred thousand dollars ($100,000) and shall be executed and acknowledged by a corporation that is licensed by the superintendent of insurance to transact the business of fidelity and surety insurance. The bonds shall be in a form acceptable to the director and shall be filed in the director's office.
B. In the event that an escrow company is unable to obtain an employee dishonesty bond that covers all persons who have access to money or negotiable securities held in trust by or in the possession of the escrow company, such persons shall be covered by a cash or surety bond obtained by the escrow company in the amount of fifty thousand dollars ($50,000) running to the people of the state of New Mexico. The surety bond shall be issued by a corporate surety company authorized by the superintendent of insurance to write surety bonds in this state and shall be in a form devised by the director.
[C. The provisions of Subsections A and B of this section shall not apply to:
(1) a licensed escrow company after three years of licensure; or
(2) an escrow company whose application for licensure is submitted on or before December 31, 1990 and that for at least three years immediately prior to licensure actually engaged in servicing at least five hundred accounts in escrow activities as a person exempted under the provisions of Subsection C of Section 58-22-4 NMSA 1978.]"
SECTION 4. Section 58-22-18 NMSA 1978 (being Laws 1983, Chapter 135, Section 18) is amended to read:
"58-22-18. STATEMENT OF ACCOUNT.--
A. Within fourteen days of a written request made by a party to the escrow agreement, each licensee shall provide a full statement of the escrow account, setting forth credits to principal and interest for the period and other information requested.
B. Within five days of a buyer depositing the final payment on an account, the licensee shall send a notice to the seller containing a final statement of account, which statement shall disclose at a minimum the following information:
(1) the names of buyers and sellers on the account;
(2) the address of the subject property;
(3) a statement that the account was paid in full;
(4) the amount of the final payment;
(5) the date that the final payment was deposited with the licensee; and
(6) the date that the final payment was disbursed by the licensee.
C. Copies of all notices issued pursuant to this section shall be retained by the licensee and shall be available for examination by the director as required pursuant to Section 58-22-17 NMSA 1978."
SECTION 5. A new section of the Escrow Company Act is enacted to read:
"[NEW MATERIAL] REPORTS OF CONDITION.--
A. A licensee shall submit to the division reports of condition, which reports shall be in such form and contain such information as prescribed by the director by rule.
B. Quarterly reports of condition shall be submitted as follows:
(1) for the first quarter of the year (January 1 through March 31), hand delivery or electronic transmission to the division or postmarked mailing no later than April 30 of that calendar year;
(2) for the second quarter of the year (April 1 through June 30), hand delivery or electronic transmission to the division or postmarked mailing no later than July 31 of that calendar year;
(3) for the third quarter of the year (July 1 through September 30), hand delivery or electronic transmission to the division or postmarked mailing no later than October 31 of that calendar year; and
(4) for the fourth quarter of the year (October 1 through December 31), hand delivery or electronic transmission to the division or postmarked mailing no later than January 30 of the following calendar year.
C. Each quarterly report of condition shall be signed by the owners of the licensee and the escrow manager.
D. A licensee that fails to comply with the provisions of this section shall pay to the division a fine in the amount of twenty dollars ($20.00) for each day's delay."
SECTION 6. A new section of the Escrow Company Act is enacted to read:
"[NEW MATERIAL] DIVISION RECORDS.--The records of the division generated or received pursuant to the Escrow Company Act, including division examination reports, financial information contained in licensee applications and renewal applications and information on investigations relating to violations of the Escrow Company Act that do not or have not yet culminated in administrative, civil or criminal action:
A. are not public records subject to the Inspection of Public Records Act;
B. may be disclosed only with the consent of the director; and
C. are not subject to subpoena."
SECTION 7. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.
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