understanding hb 2643 sections 14 & 15 june 4, 2014 jeffrey pyle, martindell, swearer, shaffer,...

UNDERSTANDING HB 2643 SECTIONS 14 & 15

June 4, 2014

Jeffrey Pyle,Martindell, Swearer, Shaffer, Ridenour, LLPP.O. Box 190720 Compound DriveHutchinson, KS 67504-1907620.662.3331

IMPORTANT NOTICE: All rights are reserved. These materials may not be reproduced in any way without the permission of the author. This publication is designed to provide general information on the seminar topic presented. The written materials and accompanying presentation have been provided exclusively for general educational and informational purposes. They shall not be construed as establishing an attorney-client relationship or furnishing legal advice which may be relied upon by you or anyone else.

Total Assessed Recording Fees under Sec. 14 Per Year (1 of 3)

7/1/14 – 12/31/14 CY 2015 CY 2016 CY 2017 CY 2018 and thereafterFirst page of deeds, mortgages, other instruments of writing $ 6.00 $ 8.00 $ 11.00 $ 14.00 $ 17.00

Tech Fees $ 2.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00

Heritage Trust Fund Fees $ - $ 1.00 $ 1.00 $ 1.00 $ 1.00

Total First Page Fees $ 8.00 $ 12.00 $ 15.00 $ 18.00 $ 21.00

Each additional page of such documents $ 2.00 $ 4.00 $ 7.00 $ 10.00 $ 13.00

Tech Fees $ 2.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00


Total Additional Page Fees Per Page $ 4.00 $ 8.00 $ 11.00 $ 14.00 $ 17.00

Total Assessed Recording Fees under Sec. 14 Per Year (2 of 3)

7/1/14 – 12/31/14 CY 2015 CY 2016 CY 2017 CY 2018 and thereafter

Recording town plats per page $ 20.00 $ 23.00 $ 26.00 $ 29.00 $ 32.00

Release/assignment of mortgages $ 5.00 $ 7.00 $ 10.00 $ 13.00 $ 16.00

Tech Fees $ 2.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00


Total Release/assignment of mortgages fees $5 + $2 per page $7 + $4 per page $10 + $4 per page $13 + $4 per page $16 + $4 per page

Total Assessed Recording Fees under Sec. 14 Per Year (3)

7/1/14 – 12/31/14 CY 2015 CY 2016 CY 2017 CY 2018 and thereafter

Certifying instruments on record $ 1.00 $ 4.00 $ 7.00 $ 10.00 $ 13.00

Signature acknowledgment $ 0.50 $ 3.50 $ 6.50 $ 9.50 $ 12.50

IRS tax lien filing notices $ 5.00 $ 8.00 $ 11.00 $ 14.00 $ 17.00

IRS / KDOR lien release notices $ 5.00 $ 8.00 $ 11.00 $ 14.00 $ 17.00

Liens for materials/services under K.S.A. 58-201 $ 5.00 $ 8.00 $ 11.00 $ 14.00 $ 17.00

Sec. 14 Distribution Between County General, Tech Funds, and Heritage Trust by Year (1)

7/1/14 -12/31/14 CY 2015 CY 2016 CY 2017 CY 2018 and thereafter

Total First Page Fees $ 8.00 $ 12.00 $ 15.00 $ 18.00 $ 21.00

County General $ 6.00 $ 9.00 $ 12.00 $ 15.00 $ 18.00

Register of Deeds Tech Fund $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00

County Clerk Tech Fund* $ - $ 0.50 $ 0.50 $ 0.50 $ 0.50

County Treasurer Tech Fund $ - $ 0.50 $ 0.50 $ 0.50 $ 0.50

Heritage Trust Fund** $ - $ - $ - $ - $ -

**Note that under subsections (h) and (i) the county treasurer is to deposit the heritage trust fund fees into the county general, and then make quarterly payments to the state treasurer up to $30,000 per year. The state treasurer is to credit the payments to the heritage trust fund. The software should earmark $1 per page beginning CY 2015 of mortgages, deeds, or other instruments of writing, and releases or assignments for quarterly payment from county general to the state treasurer for the heritage trust fund.

*No payments made to county clerk tech fund, county treasurer tech fund, or heritage trust fund in CY 2014

Sec. 14 Immediate Distribution Between County General, Tech Funds, and Heritage Trust by Year (2)

7/1/14 - 12/31/14 CY 2015 CY 2016 CY 2017 CY 2018 and thereafter

Total Additional Page Fees Per Page $ 4.00 $ 8.00 $ 11.00 $ 14.00 $ 17.00

County General $ 2.00 $ 5.00 $ 8.00 $ 11.00 $ 14.00





Sec. 14 Immediate Distribution Between County General, Tech Funds, and Heritage Trust by Year (3)

7/1/14 - 12/31/14 CY 2015 CY 2016 CY 2017 CY 2018 and thereafterTotal Release/assignment of mortgages fees $5 + $2 per page $7 + $4 per page $10 + $4 per page $13 + $4 per page $16 + $4 per page

County General $ 5.00 $ 8.00 $ 11.00 $ 14.00 $ 17.00





Sec. 15 Registration Tax Fee

CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019

Principal Debt 0.26% 0.20% 0.15% 0.10% 0.05% 0.00%

$75,001 $ 195.00 $ 150.00 $ 112.50 $ 75.00 $ 37.50 $ -

$150,000 $ 390.00 $ 300.00 $ 225.00 $ 150.00 $ 75.00 $ -

$2,000,000 $ 5,200.00 $ 4,000.00 $ 3,000.00 $ 2,000.00 $ 1,000.00 $ -

Effect of Recording Fees and Registration Taxes on Sample Homeowners

CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019Principal Debt with 18 page

mortgage 0.26% 0.20% 0.15% 0.10% 0.05% 0.00%

$75,001 $ 195.00 $ 150.00 $ 112.50 $ 75.00 $ 37.50 $ -

Page 1 total fees $ 8.00 $ 12.00 $ 15.00 $ 18.00 $ 21.00 $ 21.00 17 additional

pages total fees $ 68.00 $ 136.00 $ 187.00 $ 238.00 $ 289.00 $ 289.00 Total recording

fees and registration tax $ 271.00 $ 298.00 $ 314.50 $ 331.00 $ 347.50 $ 310.00


mortgage 0.26% 0.20% 0.15% 0.10% 0.05% 0.00%

$150,000 $ 390.00 $ 300.00 $ 225.00 $ 150.00 $ 75.00 $ -




Effect of Recording Fees and Registration Taxes on Sample Business


mortgage 0.26% 0.20% 0.15% 0.10% 0.05% 0.00%

$2,000,000 $ 5,200.00 $ 4,000.00 $ 3,000.00 $ 2,000.00 $ 1,000.00 $ - Page 1 total

fees $ 8.00 $ 12.00 $ 15.00 $ 18.00 $ 21.00 $ 21.00 17 additional


fees and registration tax $ 5,276.00 $ 4,148.00 $ 3,202.00 $ 2,256.00 $ 1,310.00 $ 310.00

Page length of bank documents rather than mortgage values determines total fees and taxes


mortgage 0.26% 0.20% 0.15% 0.10% 0.05% 0.00%

$75,001 $ 195.00 $ 150.00 $ 112.50 $ 75.00 $ 37.50 $ -





mortgage 0.26% 0.20% 0.15% 0.10% 0.05% 0.00%

$75,001 $ 195.00 $ 150.00 $ 112.50 $ 75.00 $ 37.50 $ -


pages total fees $ 396.00 $ 792.00 $ 1,089.00 $ 1,386.00 $ 1,683.00 $ 1,683.00 Total recording

fees and registration tax $ 599.00 $ 954.00 $ 1,216.50 $ 1,479.00 $ 1,741.50 $ 1,704.00

Sec. 14(j) $125 Cap: Requirements 1

Applies Only to Sec. 14 Recording Fees If:1. Recording Single Family Mortgages

2. For A Principal Residence, AND

3. Principal Debt or Obligation Secured by Mortgage is $75,000 or Less (Not $75,000.01)

Sec. 14(j) $125 Cap: Requirements 2

Filer MUST provide supporting documentation to Register of Deeds to be eligible for $125 cap. Exemptions are strictly construed against the party

claiming the exemption, and the party claiming the exemption must bring themselves clearly within the exemption. Meadowlark Hill, Inc. v. Kearns, 211 Kan. 35, Syl. ¶ 2, 505 P.2d 1127, 1129 (1973)

The documentation MUST be provided by the Filer: the Register of Deeds has no duty to investigate There is no procedure for investigation by the register of

deeds set forth in the statute, thus the burden for showing a qualification for exemption is upon the person claiming the exemption on the basis of the instruments tendered for recording. Id. at 41.

Sec. 14(j) $125 Cap: Applicability 1

$125 cap applies to ALL fees under Sec. 14 (K.S.A. 2013 Supp. 28-115).

ALL Fees = recording fees under subsection (a); Tech fees under subsection (b); AND Heritage trust fund fees under subsection

Sec. 14(j) $125 Cap: Applicability 1a

$125 cap applies to ALL fees under Sec. 14 (K.S.A. 2013 Supp. 28-115). Cap applies to “fee” for recording

“pursuant to this section” Term “Section” = entire statute (not just

subsection (a)) Term “fee” = “fees” See K.S.A. 77-201 Subsections (b) & (i) are fees for recording:

“the register of deeds shall charge and collect an additional fee of $1 per page for recording”


$125 cap DOES NOT apply to any registration tax under Sec. 15 (K.S.A. 79-3102). Use of term “section” in Sec. 14(j) means

cap only applies to recording fees in Sec. 14

Use of amended term “tax” rather than “fee” in Sec. 15(a) means that cap on “fees” found in Sec. 14 does not apply to “tax” in Sec. 15


Sec. 14(j) $125 Cap is the ONLY exception to recording fees paid under K.S.A. 2013 Supp. 28-115 K.S.A. 79-3102(d) exceptions DO NOT apply to Sec. 14

recording fees No Exception for mortgages correcting or perfecting previous

mortgage No Exception for second mortgage or mortgage securing

same indebtedness No Affidavit for principal indebtedness covered or included in

previously recorded mortgages K.S.A. 79-3102(d) exceptions apply only to registration

tax Even though called “tax” in subsection (a) and “fee” in

subsection (d)

Sec. 14(j) $125 Cap: In Action

Example: Filing fees and registration taxes for 18 page $75,000.00 principal debt on single family mortgage on principal residence

2014 2015

Rule Charge Rule Charge

Subsection (a)

Page 1 $6 (a)(1)(A) $ 6.00 $8 (a)(2)(A) $ 8.00

17 pages $2 per page ("pp") (a)(1)(B) $ 34.00 $4 pp (a)(2)(B) $ 68.00

Subsection (b) $2 pp (b)(1) and (2) $ 36.00 $3 pp (b)(1) and

(2) $ 54.00

Subsection (i) $ 0 pp (i)(1) and (2) N/A $ 1 pp (i)(1) and

(2) $ 18.00

Total $ 76.00 $ 148.00

Exceed Cap? N/A Y

Page Fees or Cap $ 76.00 $ 125.00

Registration Tax .26% 15(a)(1) $ 195.00 .2% 15(a)(2) $ 150.00

Total Charges $ 271.00 $ 275.00



Continued

2016 2017


Subsection (a)

Page 1 $11 (a)(3)(A) $ 11.00 $14 (a)(4)(A) $ 14.00

17 pages $7 pp (a)(3)(B) $ 119.00 $10 pp (a)(4)(B) $ 170.00


(2) $ 54.00

Subsection (i) $ 1 pp (i)(1) and (2) $ 18.00 $ 1 pp (i)(1) and

(2) $ 18.00

Total $ 202.00 $ 256.00

Exceed Cap? Y Y

Page Fees or Cap $ 125.00 $ 125.00

Registration Tax .15% 15(a)(3) $ 112.50 .1% 15(a)(4) $ 75.00

Total Charges $ 237.50 $ 200.00



Continued

2018 2019


Subsection (a)

Page 1 $17 (a)(5)(A) $ 17.00 $17 (a)(5)(A) $ 17.00

17 pages $13 pp (a)(5)(B) $ 221.00 $13 pp (a)(5)(B) $ 221.00


(2) $ 54.00

Subsection (i) $ 1 pp (i)(1) and (2) $ 18.00 $ 1 pp (i)(1) and

(2) $ 18.00

Total $ 310.00 $ 310.00

Exceed Cap? Y Y

Page Fees or Cap $ 125.00 $ 125.00

Registration Tax .05% 15(a)(5) $ 37.50 .00% 15(a)(6) $ .00

Total Charges $ 162.50 $ 125.00

Sec. 14(j) $125 Cap: What We Don’t Know (Distribution of Fees 1)

When the $125 cap applies, how should the funds be distributed between county general, the tech funds, and the heritage trust fund? Option 1: Tech funds are paid first, the remainder

goes to county general. Sec. 14(h) “Except as otherwise provided by subsection

(b), all fees required to be collected pursuant to this section shall be paid by the register of deeds to the county treasurer and deposited into the general fund of the county.

Problem: addresses only received funds, not the manner in which they are received. E.g. when the funds are paid but capped by statute, under which subsection were fees paid?


Option 2: Tech funds and heritage trust funds are paid only after subsection (a) fees have been paid to county general Subsection (b) & (i) fees are “in addition to”

subsection (a) fees “In addition to” defined as:

an extra person, thing, or circumstance Google Over and above Webster as an extra or additional thing (to something else);

furthermore, besides Oxford English Dictionary Do these definitions mean “subsequent to”?


Option 3: County general (subsection (a)), tech fund, and heritage trust fund fees are distributed pro rata Kansas has limited precedent. In Radke Oil Co., Inc.

v. Kansas Dep't of Health & Env’t, 23 Kan. App. 2d 774, 778-79, 936 P.2d 286, 289 (1997). Appellate claimed that under K.S.A. 65-34,113, which imposed civil penalties in addition to criminal conviction, when there was no criminal conviction, there could be no civil penalty.

Court rejected this argument, stating, “in addition to does not, by itself, create a condition precedent.”

Sec. 14 Font Size Required for Recording 1

What is the smallest font size permissible on documents to be recorded?

Register of deeds’ relevant duties: K.S.A. 19-1204(a) The register of deeds

shall also record, or cause to be recorded, in a plain and distinct handwriting or in another legible manner . . . all deeds, mortgages, maps, instruments and writings authorized by law to be recorded in the office of the register of deeds

Fonts that are too small are not legible


Register’s relevant duties continued K.S.A. 19-1205 General index including names of

grantors, grantees, nature of instrument, description of tract These must be ascertainable from the face of the

document K.S.A. 19-1213 After recording each instrument,

the instrument must be proofread by comparing the instrument filed for record with the record that has been made by the register of deeds from such original instrument. Instrument must be legible to be accurately proofread.


Register’s relevant duties continued: K.S.A. 79-3102 registration tax based upon amount

of principal debt or obligation. Can’t assess tax if amount of debt or obligation not legible

Register of deeds have implied authority to require font sizes large enough to be legible. “Unless a legislative intent is indicated otherwise an express

grant of powers to an officer or governmental board carries with it such implied powers as are necessary for the due and effective exercise of the powers expressly granted and the discharge of the duties imposed.” Bd. of Comm’rs of Edwards Cnty. v. Simmons, 159 Kan. 41, Syl. ¶ 3, 151 P.2d 960, 961 (1944)


(e) If sufficient space is not provided for the necessary recording information and certification on a document, such recording information shall be placed on an added sheet and such sheet shall be counted as a page. The document shall be of sufficient legibility so as to produce a clear and legible reproduction thereof. If a document is judged not to be of sufficient legibility so as to produce a clear and legible reproduction, such document shall be accompanied by an exact copy thereof which shall be of sufficient legibility so as to produce a clear and legible reproduction thereof and which shall be recorded contemporaneously with the document and shall be counted as additional pages. The register of deeds may reject any document which is not of sufficient legibility so as to produce a clear and legible reproduction thereof.

(f) Any document which was filed on or after January 1, 1989, which was of a size print or type smaller than 8-point type but which otherwise was properly filed shall be deemed to be validly filed.

Sec. 14 What happens if a person overpays the register of deeds 1

Sec. 14(g) requires that all fees are paid before the register of deeds records anything Those seeking to fall under the $125 cap

must first provide documentation. Failure to provide adequate documentation

means full fees are due. Register of deeds must reject anything less

than full payment

Sec. 14 What happens if a person overpays the register of deeds 2

Any potential refunds would be the responsibility of the county treasurer and not the register of deeds: If recording fees are a “tax,” the filer would be required to

protest by sending a written statement to county treasurer under K.S.A. 79-2005

Even if recording fees are not a tax, statute requires all fees collected by register of deeds to be paid to county treasurer

The register of deeds breaches his or her statutory duty if the register does anything other than remit fees to county treasurer (e.g. pay a refund)

Because the statute gives no mechanism for a register of deeds to provide a refund, the register of deeds is without the power to provide a refund.

Sec. 14 Can the county adopt and charge fees not covered in K.S.A. 28-115?

Yes, under the county’s authority in K.S.A. 19-117 Because of home rule, counties may enact local law

when there is a uniform state law but local action has not been pre-empted by that law and the city or county wants to enact additional or supplemental (i.e., nonconflicting) local laws. Michael R. Heim, Home Rule Power for Cities and Counties in Kansas, 66 J.K.B.A. 26, 28 (1997).

A county has the power to tax or raise revenues under K.S.A. 19-117.

Local action is prohibited only where there is a clear statement of legislative intent to pre-empt local initiative or there is an actual conflict between state and local law.


There is no legislative statement of prohibition in K.S.A. 28-115

There is no prohibition or exception found in K.S.A. 19-101a.

“We have consistently rejected the doctrine of implied preemption, reasoning that legislative intent to reserve exclusive jurisdiction must be clear.” Water Dist. No. 1 of Johnson Cnty. v. City Council of City of Kansas City, 255 Kan. 183, 193-94, 871 P.2d 1256, 1264 (1994)

Thus, the county may adopt and charge additional or supplemental fees.


Any fees adopted and charged should be reasonable and reasonably related to the costs the register of deeds incurs in performing the service. See City of Beloit v. Lamborn, 182 Kan. 288, 294-95, 321 P.2d 177, 182 (1958); Matheny v. City of Hutchinson, 154 Kan. 682, 121 P.2d 227, 232 (1942).

Examples: handling charges for rejected documents return postage fees

Sec. 14 Permitted Expenditures from Clerk & Treasurer Technology Funds

These funds are modeled after K.S.A. 28-115a Provide for acquiring equipment and

technological services for storing, recording, archiving, retrieving, maintaining, and handling of data recorded, stored, or generated in the office of clerk (or treasurer)

Salaries may be an appropriate expenditure provided the activities are related to the storing, recording, archiving, retrieving, maintaining, and handling of data recorded or stored (Reasonable Nexus). Attorney General Op. No. 2010-14

Questions?

understanding hb 2643 sections 14 & 15 june 4, 2014 jeffrey pyle, martindell, swearer, shaffer,...

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