HB 503 — Real Estate Modifications

and (B) [is authorized by ]the depository institution's primary regulator authorizes to engage in trust business, as defined in Section 7-5-1, in this state;

and (ii) in a trust account that is separate from all other trust account money that is not related to real estate transactions;

(e) [money deposited with the individual title insurance producer or agency title insurance producer in connection with any escrow is the property of the one or more persons entitled to the money under the provisions of the escrow] the producer treats money received in escrow as the property of the persons entitled to the money received under the provisions of the escrow agreement;

(f) [money deposited with the individual title insurance producer or agency title insurance producer in connection with an escrow is segregated escrow by escrow in the records of the individual title insurance producer or agency title insurance producer] the producer segregates escrow funds on an escrow-by-escrow basis;

(g) the producer pays earnings on money held in escrow [may be paid out of] from the trust account[ to any person ] in accordance with the conditions of the escrow agreement;

(h) the escrow does not require the [individual title insurance producer or agency title insurance ]producer to hold:

- 3 - HB0503 compared with HB0503S01 (i) construction money;

or (ii) money held for exchange under Section 1031, Internal Revenue Code;

and (i) the [individual title insurance producer or agency title insurance producer shall maintain ] producer maintains a physical office in [Utah staffed by a ] the state that a person with an escrow subline of authority [who] that processes the escrow staffs.

(3) Notwithstanding Subsection (2), [an individual title insurance producer or agency title insurance] a producer may engage in the escrow business if:

(a) the escrow involves:

(i) a mobile home;

(ii) a grazing right;

(iii) a water right;

or (iv) other personal property [authorized by the commissioner] the commissioner authorizes;

and (b) the [individual title insurance producer or agency title insurance ]producer complies with this section except for Subsection (2)(c).

(4) (a) Subsection (2)(c) does not apply if the transaction is for the transfer of real property from the School and Institutional Trust Lands Administration.

(b) This subsection does not prohibit [an individual title insurance producer or agency title insurance] a producer from issuing a policy described in Subsection (2)(c) as part of a transaction described in Subsection (4)(a).

[(5) Money held in escrow:] [(a) is not subject to any debts of the individual title insurance producer or agency title insurance producer;] [(b) may only be used to fulfill the terms of the individual escrow under which the money is accepted;

and] [(c) may not be used until the conditions of the escrow are met.] (5) The producer may not:

(a) subject the money held in escrow to debts of the producer;

(b) use the money held in escrow outside the terms of the individual escrow under which the producer accepts the money;

and (c) use the money held in escrow until the conditions of the escrow are met.

- 4 - HB0503 compared with HB0503S01 (6) [Assets ] A producer shall maintain assets, or property other than escrow money [received by an individual title insurance producer or agency title insurance ] the producer receives, in accordance with an escrow[ shall be maintained ] in a manner that will:

(a) reasonably preserve and protect the asset or property from loss, theft, or damages;

and (b) [otherwise ]comply with the general duties and responsibilities of a fiduciary or bailee.

(7) (a) A check from the trust account described in Subsection (2)(d) may not be drawn, executed, or dated, or money otherwise disbursed unless the segregated trust account from which money is to be disbursed contains a sufficient credit balance consisting of collected and cleared money at the time the check is drawn, executed, or dated, or money is otherwise disbursed.

(b) As used in this Subsection (7), money is considered to be "collected and cleared," and may be disbursed as follows:

(i) cash may be disbursed on the same day the cash is deposited;

(ii) a wire transfer may be disbursed on the same day the wire transfer is deposited;

(iii) the proceeds of one or more of the following financial instruments may be disbursed on the same day the financial instruments are deposited if received from a single party to the real estate transaction and if the aggregate of the financial instruments for the real estate transaction is less than $10,000:

(A) a cashier's check, certified check, or official check that is drawn on an existing account at a federally insured financial institution;

(B) a check drawn on the trust account of a principal broker or associate broker licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act, if the [individual title insurance producer or agency title insurance ]producer has reasonable and prudent grounds to believe sufficient money will be available from the trust account on which the check is drawn at the time of disbursement of proceeds from the [individual title insurance producer or agency title insurance ]producer's trust account;

(C) a personal check not to exceed $500 per closing;

or (D) a check drawn on the trust account of another [individual title insurance producer or agency title insurance ]producer, if the [individual title insurance producer or agency title insurance ]producer in the escrow transaction has reasonable and prudent grounds to believe that sufficient money will be available for withdrawal from the account upon which the check is drawn at the time of - 5 - HB0503 compared with HB0503S01 disbursement of money from the trust account of the [individual title insurance producer or agency title insurance ]producer in the escrow transaction;

(iv) deposits made through the ACH network may be disbursed on the same day the deposit is made if:

(A) the transferred funds remain uniquely designated and traceable throughout the entire ACH network transfer process;

(B) except as a function of the ACH network process, the transferred funds are not subject to comingling or third party access during the transfer process;

(C) the transferred funds are deposited into the title insurance producer's trust account and are available for disbursement;

and (D) either the ACH network payment type or the title insurance producer's systems prevent the transaction from being unilaterally canceled or reversed by the consumer once the transferred funds are deposited to the individual title insurance producer or agency title producer;

or (v) deposits may be disbursed on the same day the deposit is made if the deposit is made via:

(A) the Federal Reserve Bank through the Federal Reserve's Fedwire funds transfer system;

or (B) a funds transfer system provided by an association of federally insured depository institutions.

(c) A check or deposit not described in Subsection (7)(b) may be disbursed:

(i) within the time limits provided under the Expedited Funds Availability Act, 12 U.S.C.

Sec.

4001 et seq., as amended, and related regulations of the Federal Reserve System;

or (ii) upon notification from the financial institution to which the money has been deposited that final settlement has occurred on the deposited financial instrument.

(8) [An individual title insurance producer or agency title insurance ] A producer shall maintain a record of a receipt or disbursement of escrow money.

(9) [An individual title insurance producer or agency title insurance] A producer shall comply with:

(a) Section 31A-23a-409;

(b) Title 46, Chapter 1, Notaries Public Reform Act;

and (c) any rules [adopted by ] that the Title and Escrow Commission adopts, subject to Section 31A-2-404, that govern escrows.

(10) If [an individual title insurance producer or agency title insurance] a producer conducts a search for real estate located in the state, the [individual title insurance producer or agency title insurance ]producer shall conduct a reasonable search of the public records.

Section 1.

H- 31A-23a-10016 .- HB0503 compared with HB0503S01 31A-23a-1001.

B As used in this part:

(1) "Affiliated business" means the gross [transaction] title premium revenue of a title 5 entity's title insurance business in the state that is the result of an affiliated business arrangement.

1st(3) Sub."Applicable percentage" means:

(Buff) H.B.

503 02-17 08:57 (3) "Applicable percentage" means:

and (iii) obligates the insurer to issue a title insurance policy if the conditions described in Subsection (6)(b)(ii)(6)(b) (ii) are met;

or - 7 - HB0503 compared with HB0503S01 (e) handling the closing or settlement of a real estate transaction when:

or (b)(i)(b) (i) is licensed as a title entity before May 14, 2019;

and (ii) enters into an affiliated business arrangement for the first time on or after May -14, 22019. - 02-17 08:57 1st Sub.

(Buff) H.B.

503 14, 2019.

- 8 - HB0503 compared with HB0503S01 (12) "Title entity" means:

(13)(a)(13) (a) "Title evidence" means a written or electronic document that identifies and describes or compiles the documents, records, judgments, liens, and other information from the public records relevant to the history and current condition of a -title 3to -be 1stinsured. Sub.

(Buff) H.B.

503 02-17 08:57 title to be insured.

31A-23a-100331A-23a-1003. .

and - 9 - HB0503 compared with HB0503S01 (v) performs the essential functions of title insurance business itself;

and (c) whether the person from whom the title entity receives referrals under the affiliated -business 4arrangement -also 02-17sends 08:57title 1stinsurance Sub.business to other title entities.

(Buff) H.B.

503 business arrangement also sends title insurance business to other title entities.

Effective date.

2-17-26 8:57 AM - 510 -