First Regular Session

Sixty-first General Assembly

LLS NO. 97­0205.01 MKD SENATE BILL 97­056

STATE OF COLORADO

BY SENATOR B. Alexander;

also REPRESENTATIVE McPherson.

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING THE DEFINITION OF "ORIGINAL" FOR PURPOSES OF AN ORIGINAL EVIDENCE OF DEBT SECURED BY A DEED OF TRUST.

Bill Summary

"Original Deeds Of Trust As Evidence"

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Defines the term "original" in the provision governing foreclosure sales by owners of a debt secured by a deed of trust and in the provision governing the release of liens of deeds of trust. Specifies that "original" includes the deed of trust for the debt itself as well as a qualified optically imaged reproduction. Provides for indemnification of the public trustee for relying on a qualified optically imaged reproduction.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  38­38­101, Colorado Revised Statutes, 1982 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

38­38­101.  Owner of evidence of debt may elect to foreclose ­ notice ­ record of sale ­ withdrawal. (1.5)  FOR PURPOSES OF THIS SECTION, "ORIGINAL" MEANS THE EVIDENCE OF DEBT, INCLUDING ALL ENDORSEMENTS, CHANGES, MODIFICATIONS, AND AMENDMENTS TO THE EVIDENCE OF DEBT. THE TERM INCLUDES AN OPTICALLY IMAGED REPRODUCTION OF THE EVIDENCE OF DEBT WHEN THE FOLLOWING REQUIREMENTS ARE MET:

(a)  THE OPTICAL IMAGE STORAGE MEDIA USED TO STORE THE DOCUMENT IS A NONERASABLE WRITE ONCE, READ MANY (WORM) OPTICAL IMAGE MEDIA THAT DOES NOT ALLOW CHANGES TO THE STORED DOCUMENT.

(b)  THE OPTICAL IMAGE REPRODUCTION IS MADE CONSISTENT WITH THE MINIMUM STANDARDS OF QUALITY APPROVED BY EITHER THE NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY OR THE ASSOCIATION FOR INFORMATION AND IMAGE MANAGEMENT.

(c)  THE OWNER OF THE EVIDENCE OF DEBT SUBMITS AN INDEMNIFICATION TO THE PUBLIC TRUSTEE THAT:

(I)  CERTIFIES THAT THE INDEMNITOR IS THE TRUE OWNER AND HOLDER OF THE EVIDENCE OF DEBT;

(II)  INDEMNIFIES THE PUBLIC TRUSTEE FROM ANY DAMAGES AS THE RESULT OF THE ACTION OF THE PUBLIC TRUSTEE TAKEN IN RELIANCE ON THE REPRODUCTION;

(III)  IS ACCOMPANIED BY AN OPTICAL IMAGE REPRODUCTION OF SUCH EVIDENCE OF DEBT; AND

(IV)  INCLUDES WRITTEN AUTHENTICATION PRINTED OR STAMPED ON THE INDEMNIFICATION THAT IDENTIFIES THE OPTICAL IMAGE REPRODUCTION AS AN UNALTERED COPY OF THE ORIGINAL EVIDENCE OF DEBT, WHICH SHALL BE CONSIDERED PRIMA FACIE EVIDENCE OF THE AUTHENTICITY OF THE OPTICAL IMAGE REPRODUCTION.

SECTION 2.  38­39­102, Colorado Revised Statutes, 1982 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

38­39­102.  When liens of deeds of trust shall be released. (1.5)  FOR PURPOSES OF THIS SECTION, "ORIGINAL" MEANS THE EVIDENCE OF DEBT, INCLUDING ALL ENDORSEMENTS, CHANGES, MODIFICATIONS, AND AMENDMENTS TO THE EVIDENCE OF DEBT. THE TERM INCLUDES OPTICALLY IMAGED REPRODUCTION OF THE EVIDENCE OF DEBT WHEN THE FOLLOWING REQUIREMENTS ARE MET:

(a)  THE OPTICAL IMAGE STORAGE MEDIA USED TO STORE THE DOCUMENT IS NONERASABLE WRITE ONCE, READ MANY (WORM) OPTICAL IMAGE MEDIA THAT DOES NOT ALLOW CHANGES TO THE STORED DOCUMENT.

(b)  THE OPTICAL IMAGE REPRODUCTION IS MADE CONSISTENT WITH THE MINIMUM STANDARDS OF QUALITY APPROVED BY EITHER THE NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY OR THE ASSOCIATION FOR INFORMATION AND IMAGE MANAGEMENT.

(c)  THE OWNER OF THE EVIDENCE OF DEBT SUBMITS AN INDEMNIFICATION TO THE PUBLIC TRUSTEE THAT:

(I)  CERTIFIES THAT THE INDEMNITOR IS THE TRUE OWNER AND HOLDER OF THE EVIDENCE OF DEBT;

(II)  INDEMNIFIES THE PUBLIC TRUSTEE FROM ANY DAMAGES AS THE RESULT OF ISSUING SUCH RELEASE IN RELIANCE ON THE REPRODUCTION;

(III)  IS ACCOMPANIED BY AN OPTICAL IMAGE REPRODUCTION OF SUCH EVIDENCE OF DEBT; AND

(IV)  INCLUDES WRITTEN AUTHENTICATION PRINTED OR STAMPED ON THE INDEMNIFICATION THAT IDENTIFIES THE OPTICAL IMAGE REPRODUCTION AS AN UNALTERED COPY OF THE ORIGINAL EVIDENCE OF

DEBT, WHICH SHALL BE CONSIDERED PRIMA FACIE EVIDENCE OF THE AUTHENTICITY OF THE OPTICAL IMAGE REPRODUCTION.

SECTION 3.  Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.