SENATE BILL 97213
BY SENATOR Alexander;
also REPRESENTATIVES McPherson and George.
CONCERNING THE INDEMNIFICATION OF PUBLIC TRUSTEES
WHEN ORIGINAL EVIDENCE OF DEBT IS NOT PROVIDED IN CERTAIN TRANSACTIONS.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. 3839102
(1) (a), (2), (6), and (7), Colorado Revised Statutes, 1982 Repl.
Vol., as amended, are amended, and the said 3839102
is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:
3839102. When liens of
deeds of trust shall be released. (1) (a) EXCEPT
AS OTHERWISE PROVIDED IN SUBSECTION (3.5) OF THIS SECTION, liens
of deeds of trust to the public trustee, upon compliance with
the provisions of such deeds of trust, shall be released by the
public trustee upon the:
(I) Receipt of a written request of the
owner of the evidence of debt secured by such deed of trust, or
the agent or attorney thereof, or a title insurance company providing
an indemnification agreement and affidavit described in paragraph
(c) of subsection (3) of this section, which request shall be
duly executed and acknowledged;
(II) Production of the original cancelled
evidence of debt such as a note or bond as evidence that the indebtedness
secured by such deed of trust has been paid; EXCEPT THAT SUCH
PRODUCTION MAY BE OMITTED IN THE CIRCUMSTANCES CONTEMPLATED IN
SUBSECTION (3.5) OF THIS SECTION; and
(III) Receipt by the public trustee of
the fee prescribed by section 3837104 (1) (a) and
the fee for recording the release.
(2) If the purpose of the deed of trust
has been fully or partially satisfied and the indebtedness secured
by such deed of trust has not been paid, the public trustee shall
release the lien of the deed of trust as to all or portions of
the property encumbered by the deed of trust pursuant to the provisions
of subsection (1) of this section if the original
evidence of debt is exhibited and the
request to release states
CERTIFIES that the purpose of the deed of trust has been fully
or partially satisfied AND IF EITHER THE ORIGINAL EVIDENCE OF
DEBT IS EXHIBITED OR THE OWNER IS AN ENTITY DESCRIBED IN PARAGRAPH
(b) OF SUBSECTION (3.5) OF THIS SECTION THAT HAS MADE, IN THE
OWNER'S REQUEST FOR RELEASE OR PARTIAL RELEASE, THE CERTIFICATION
CONTEMPLATED IN PARAGRAPH (a) OF SUBSECTION (3.5) OF THIS SECTION.
(3.5) (a) IF THE OWNER OF THE EVIDENCE OF DEBT IS A FINANCIAL INSTITUTION DESCRIBED IN PARAGRAPH (b) OF THIS SUBSECTION (3.5), THE PUBLIC TRUSTEE MAY ACCEPT, IN LIEU OF PRODUCTION OR EXHIBITION OF THE ORIGINAL EVIDENCE OF DEBT REQUIRED BY SUBSECTION (1) OR (2) OF THIS SECTION, A CERTIFICATION MADE IN THE OWNER'S REQUEST FOR RELEASE OR PARTIAL RELEASE CERTIFYING THAT THE OWNER IS A FINANCIAL INSTITUTION DESCRIBED IN PARAGRAPH (b) OF THIS SUBSECTION (3.5), THAT THE ORIGINAL EVIDENCE OF DEBT IS NOT BEING EXHIBITED OR PRODUCED, AND THAT THE OWNER AGREES THAT THE OWNER IS OBLIGATED TO INDEMNIFY THE PUBLIC TRUSTEE PURSUANT TO THIS PARAGRAPH (a). WHETHER SUCH AGREEMENT IS CONTAINED IN THE CERTIFICATION, THE OWNER, BY REQUESTING RELEASE OR PARTIAL RELEASE WITHOUT PRODUCTION OR EXHIBITION OF THE EVIDENCE OF INDEBTEDNESS, SHALL BE DEEMED TO HAVE AGREED TO INDEMNIFY THE PUBLIC TRUSTEE FOR ANY AND ALL DAMAGES, COSTS, LIABILITIES, AND REASONABLE ATTORNEY FEES INCURRED AS A RESULT OF THE ACTION OF THE PUBLIC TRUSTEE TAKEN IN ACCORDANCE WITH SUCH REQUEST, AND NO SEPARATE INDEMNIFICATION AGREEMENT SHALL BE NECESSARY FOR THE AGREEMENT TO INDEMNIFY TO BE EFFECTIVE. VENUE FOR ANY ACTION BASED UPON SUCH INDEMNIFICATION AGREEMENT SHALL BE PROPER ONLY IN THE COUNTY IN WHICH THE PUBLIC TRUSTEE RECEIVING THE CERTIFICATION IS LOCATED.
(b) ONLY THE FOLLOWING FINANCIAL INSTITUTIONS
SHALL BE ENTITLED TO SUBMIT A CERTIFICATION PURSUANT TO PARAGRAPH
(a) OF THIS SUBSECTION (3.5):
(I) A BANK, AS DEFINED IN SECTION 111102
(2), C.R.S.;
(II) AN INDUSTRIAL BANK, AS DEFINED IN
SECTION 1122101 (1), C.R.S.;
(III) A SAVINGS AND LOAN ASSOCIATION LICENSED
TO DO BUSINESS IN COLORADO;
(IV) A SUPERVISED LENDER, AS DEFINED IN
SECTION 53501 (2), C.R.S., THAT IS LICENSED TO MAKE
SUPERVISED LOANS PURSUANT TO SECTION 53503, C.R.S.,
AND THAT IS EITHER:
(A) A PUBLIC ENTITY, AS DEFINED IN PARAGRAPH
(c) OF THIS SUBSECTION (3.5); OR
(B) AN ENTITY IN WHICH ALL OF THE OUTSTANDING
VOTING SECURITIES ARE HELD, DIRECTLY OR INDIRECTLY, BY A PUBLIC
ENTITY;
(V) AN ENTITY IN WHICH ALL OF THE OUTSTANDING
VOTING SECURITIES ARE HELD, DIRECTLY OR INDIRECTLY, BY A PUBLIC
ENTITY ALSO OWNING, DIRECTLY OR INDIRECTLY, ALL OF THE VOTING
SECURITIES OF A SUPERVISED LENDER, AS DEFINED IN SECTION 53501
(2), C.R.S., THAT IS LICENSED TO MAKE SUPERVISED LOANS PURSUANT
TO SECTION 53503, C.R.S.;
(VI) A FEDERAL HOUSING ADMINISTRATION
APPROVED MORTGAGEE;
(VII) A FEDERALLY CHARTERED CREDIT UNION
DOING BUSINESS IN COLORADO OR A STATE CHARTERED CREDIT UNION,
AS DEFINED IN SECTION 1130101, C.R.S.;
(VIII) AN AGENCY OF THE FEDERAL GOVERNMENT;
OR
(IX) A FEDERALLY CREATED CORPORATION THAT
ORIGINATES, GUARANTEES, OR PURCHASES LOANS.
(c) FOR PURPOSES OF THIS SUBSECTION (3.5),
"PUBLIC ENTITY" MEANS AN ENTITY THAT HAS ISSUED VOTING
SECURITIES THAT ARE LISTED ON A NATIONAL SECURITIES EXCHANGE REGISTERED
UNDER THE FEDERAL "SECURITIES EXCHANGE ACT OF 1934".
(6) The public trustee shall have no liability
to any person, and no action may be commenced against the public
trustee, as a result of issuing a release or partial release of
a deed of trust under subsection (3) of this section, unless such
action is commenced within six years from the date of the recording
of such release or partial release or within the period of time
prescribed by any statute of limitation of this state in which
a suit to enforce payment of the indebtedness or performance of
the obligation secured by said deed of trust may be commenced,
whichever is less. NOTHING IN THIS ARTICLE SHALL BE CONSTRUED
TO WAIVE IMMUNITY OF A PUBLIC TRUSTEE THAT IS PROVIDED IN SECTIONS
2410101 TO 2410120, C.R.S.
(7) Either
The indemnification agreements or the corporate surety bond described
in subsection (3) of
this section which may be accepted
by the public trustee in lieu of the production of the original
evidence of debt shall, in each case,
remain effective for the time period described in subsection (6)
of this section or until such time as any claim made against the
public trustee within such time period has been finally resolved,
whichever is longer.
SECTION 2. Effective date. This
act shall take effect September 1, 1997; except that, if a referendum
petition is filed against this act or an item, section, or part
of this act within the ninetyday period after final adjournment
of the general assembly that is allowed for submitting a referendum
petition pursuant to article V, section 1 (3) of the state constitution,
then the act, item, section, or part, if approved by the people,
shall take effect on the date of the official declaration of the
vote thereon by proclamation of the governor.
____________________________ ____________________________
Tom Norton Charles E. Berry
PRESIDENT OF SPEAKER OF THE HOUSE
THE SENATE OF REPRESENTATIVES
____________________________ ____________________________
Joan M. Albi Judith M. Rodrigue
SECRETARY OF CHIEF CLERK OF THE HOUSE
THE SENATE OF REPRESENTATIVES
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE OF COLORADO